<DOC> [105 Senate Hearings] [From the U.S. Government Printing Office via GPO Access] [DOCID: f:46586.wais] S. Hrg. 105-50, Part 2 CLEAN AIR ACT: OZONE AND PARTICULATE MATTER STANDARDS ======================================================================= HEARINGS BEFORE THE SUBCOMMITTEE ON CLEAN AIR, WETLANDS, PRIVATE PROPERTY AND NUCLEAR SAFETY AND THE COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS UNITED STATES SENATE ONE HUNDRED FIFTH CONGRESS FIRST SESSION __________ APRIL 24 AND 29, AND JULY 24, 1997 __________ Printed for the use of the Committee on Environment and Public Works <snowflake> U.S. GOVERNMENT PRINTING OFFICE 44-108 cc WASHINGTON : 1997 _______________________________________________________________________ For sale by the U.S. Government Printing Office Superintendent of Documents, Congressional Sales Office, Washington DC 20402 COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS ONE HUNDRED FIFTH CONGRESS JOHN H. CHAFEE, Rhode Island, Chairman JOHN W. WARNER, Virginia MAX BAUCUS, Montana ROBERT SMITH, New Hampshire DANIEL PATRICK MOYNIHAN, New York DIRK KEMPTHORNE, Idaho FRANK R. LAUTENBERG, New Jersey JAMES M. INHOFE, Oklahoma HARRY REID, Nevada CRAIG THOMAS, Wyoming BOB GRAHAM, Florida CHRISTOPHER S. BOND, Missouri JOSEPH I. LIEBERMAN, Connecticut TIM HUTCHINSON, Arkansas BARBARA BOXER, California WAYNE ALLARD, Colorado RON WYDEN, Oregon JEFF SESSIONS, Alabama Jimmie Powell, Staff Director J. Thomas Sliter, Minority Staff Director ------ Subcommittee on Clean Air, Wetlands, Private Property, and Nuclear Safety JAMES M. INHOFE, North Carolina, Chairman TIM HUTCHINSON, Arkansas BOB GRAHAM, Florida WAYNE ALLARD, Colorado JOSEPH I. LIEBERMAN, Connecticut JEFF SESSIONS, Alabama BARBARA BOXER, California (ii) C O N T E N T S ---------- Page APRIL 24, 1997 RISK ANALYSIS AND IMPLEMENTATION ISSUES OPENING STATEMENTS Allard, Hon. Wayne, U.S. Senator from the State of Colorado...... 6 Boxer, Hon. Barbara, U.S. Senator from the State of California... 7 Chafee, Hon. John H., U.S. Senator from the State of Rhode Island 11 Hutchinson, Hon. Tim, U.S. Senator from the State of Arkansas.... 4 Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma... 1 Sessions, Hon. Jeff, U.S. Senator from the State of Alabama...... 5 WITNESSES Chilton, Kenneth W., director, Center for the Study of American Business, Washington University, St. Louis, MO................. 9 Prepared statement........................................... 50 Cooper, Benjamin Y., senior vice president, Printing Industries of America..................................................... 36 Prepared statement........................................... 204 Dudley, Susan E., vice president and director of environmental analysis, Economists Incorporated.............................. 14 Prepared statement........................................... 161 Report, NAAQS for Ozone...................................... 251 Hartsock, Beverly, Deputy Director, Policy & Regulatory Development, Texas Natural Resource Conservation Commission.... 39 Letters, impact of proposed NAAQS on Texas................... 230 Prepared statement........................................... 225 Kerkhoven, Paul C., director, Environmental Affairs, American Highway Users Alliance......................................... 34 Prepared statement........................................... 243 Krupnick, Alan, senior fellow, Resources for the Future..........18, 29 Prepared statements.......................................... 177, 191................................................... Leyden, Patricia, deputy executive officer, South Coast Air Quality Management District.................................... 38 Prepared statement........................................... 208 Responses to additional questions from Senator Lieberman..... 210 Lippmann, Morton, Institute of Environmental Medicine, New York University..................................................... 17 Prepared statement........................................... 168 Responses to additional questions from Senator Lieberman..... 176 Nichols, Mary, Assistant Administrator, Office of Air and Radiation, Environmental Protection Agency..................... 31 Prepared statement........................................... 203 Shy, Carl M., Department of Epidemiology, School of Public Health, University of North Carolina at Chapel Hill............ 15 Prepared statement........................................... 164 Starr, Thomas, principal, Environ Inc............................ 11 Prepared statement........................................... 54 Reports: Associations of PM with Adverse Health Outcomes: Expert Panel Review of Causality Issues....................... 134 Proposed NAAQS for PM: Qualitative Risk Assessment....... 58 Proposed NAAQS for PM: Issues of Causality............... 85 ADDITIONAL MATERIAL Statements: Center for Study of Public Choice, George Mason University... 247 Hopkins, Thomas D., Rochester Institute of Technology........ 343 ------ APRIL 29, 1997 IMPACT ON STATE AND LOCAL GOVERNMENTS OPENING STATEMENTS Hutchinson, Hon. Tim, U.S. Senator from the State of Arkansas.... 368 Resolutions, Arkansas legislature............................ 372 Statement, Arkansas State Representative Scott Ferguson...... 369 Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma... 363 Charts....................................................... 365 Sessions, Hon. Jeff, U.S. Senator from the State of Alabama...... 381 WITNESSES Alford, Harry C., president and CEO, National Black Chamber of Commerce....................................................... 411 Prepared statement........................................... 606 Billings, Hon. Leon G., Delegate, Maryland General Assembly...... 382 Prepared statement........................................... 462 Responses to additional questions from Senator Baucus........ 463 Fennelly, Kevin P., staff physician, Division of Environmental and Occupational Health Sciences, National Jewish Medical and Research Center................................................ 398 Prepared statement........................................... 595 Grande, Christopher M., executive director, International Trauma Anesthesia and Critical Care Society........................... 400 Prepared statement........................................... 604 Hansen, Paul, executive director, Izaak Walton League of America. 396 Prepared statement........................................... 594 Heilman, Glenn, vice president, Heilman Pavement Specialties, Inc., for National Federation of Independent Business.......... 416 Prepared statement........................................... 610 Herhold, Frank F., executive director, Marine Industries Association of South Florida, for National Marine Manufacturers Association.................................................... 412 Prepared statement........................................... 608 Homrighausen, Hon. Richard P., Mayor of Dover, OH................ 377 Prepared statement........................................... 423 Hull, Hon. Emma Jean, Mayor of Benton Harbor, MI................. 374 Prepared statement........................................... 421 Junk, Robert C., president, Pennsylvania Farmers Union, for National Farmers Union......................................... 392 Prepared statement........................................... 474 Russman, Hon. Richard L. New Hampshire State Senate.............. 379 Letters, proposed NAAQS standards, New Hampshire Department of Environmental Services.................................. 467 Prepared statement........................................... 464 Selph, Hon. John, Tulsa County Commissioner, OK.................. 383 Prepared statement........................................... 473 Smith, Jeffrey C., executive director, Institute of Clean Air Companies...................................................... 414 Prepared statement........................................... 609 Vice, Bob, president, California Farm Bureau Federation, for American Farm Bureau Federation................................ 394 Prepared statement........................................... 480 ADDITIONAL MATERIAL Letters: American Farm Bureau Federation.............................. 577 CASAC Advisory Committee..................................... 581 Department of Agriculture.................................... 553 Food Industry Environmental Council.......................... 640 Food processing industry representatives..................... 573 Massachusetts Department of Environmental Protection......... 649 National Caucus of Environmental Legislators................. 644 Natural Resource Conservation Service........................ 565 New York Department of Environmental Conservation............ 617 Northeast States for Coordinated Air Use Management.......... 646 Public Service Electric and Gas Company...................... 656 Small Business Administration................................ 568 Vermont Governor Howard Dean................................. 654 Report, Long-Range Transport of North African Dust to the Eastern United States.................................................. 489 Statements: Associated Builders and Contractors.......................... 611 Cahill, John, Acting Commissioner, New York State Department of Environmental Conservation.............................. 613 Public Service Electric and Gas Company...................... 657 United Steelworkers of America, AFL-CIO...................... 664 Summary, Comments on Coarse Particles, Federal Register.......... 532 ------ JULY 24, 1997 IMPLEMENTATION STRATEGY OPENING STATEMENTS Allard, Hon. Wayne, U.S. Senator from the State of Colorado...... 671 Baucus, Hon. Max, U.S. Senator from the State of Montana......... 694 Hutchinson, Hon. Tim, U.S. Senator from the State of Arkansas.... 670 Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma... 667 Lieberman, Hon. Joseph I., U.S. Senator from the State of Connecticut.................................................... 694 Sessions, Hon. Jeff, U.S. Senator from the State of Alabama...... 672 Thomas, Hon. Craig, U.S. Senator from the State of Wyoming....... 669 WITNESS Nichols, Mary D., Assistant Administrator for Air and Radiation, Environmental Protection Agency................................ 673 Prepared statement........................................... 695 Responses to additional questions from: Senator Baucus........................................... 714 Senator Inhofe........................................... 703 CLEAN AIR ACT: OZONE AND PARTICULATE MATTER STANDARDS ---------- THURSDAY, APRIL 24, 1997 U.S. Senate, Committee on Environment and Public Works, Subcommittee on Clean Air, Wetlands, Private Property and Nuclear Safety, Washington, DC. RISK ANALYSIS AND IMPLEMENTATION ISSUES The subcommittee met, pursuant to recess, at 9:33 a.m. in room 406, Senate Dirksen Building, Hon. James M. Inhofe (chairman of the subcommittee) presiding. Present: Senators Inhofe, Hutchinson, Allard, Sessions, Lieberman, and Chafee (ex officio). Also present: Senator Baucus. OPENING STATEMENT OF HON. JAMES M. INHOFE, U.S. SENATOR FROM THE STATE OF OKLAHOMA Senator Inhofe. The hearing will come to order. Today's subcommittee hearing is the third on the proposed rule changes. It's actually the fourth hearing that we've had; one was a full committee hearing. The first was the science hearing, in which we heard from members of CASAC, and there are some members from CASAC here today as well as much of the scientific community. At the second hearing, Administrator Browner was the Administration's first witness. The committee then held a field hearing in Oklahoma City. In fact, I think we set a record for the longest and the best attended field hearing in the history of Oklahoma. Today, we turn to risk and implementation issues. This will be followed by a hearing this coming Tuesday, April 29, which will focus on the impacts of the proposed regulations by EPA. I'm troubled by the risk issues surrounding these regulations. The risk analysis is necessarily based on the understanding of the science issues, but we learned in our science hearing that there is great uncertainty on the scientific side. When we add that to the uncertainties in the risk assessments, we end up with very dubious results. We have learned that the EPA greatly overestimated the impacts of both ozone and PM and they've had to publicly change their figures. In addition, we've learned that they selectively applied some study results, while ignoring others in their calculations. For example, the majority of the health benefits for ozone are based on one study by Dr. Moolgavkar even though the Agency ignored the results of that study because it contradicted their position. What I find most troubling is that first, the science is unclear and incomplete, and then these uncertainties are added to the uncertainties of risk calculations. The EPA has claimed these results are concrete facts, even though other Federal agencies and outside interest groups have raised many questions about these proposals. Public policy decisions must be open and aboveboard. Uncertainty in science, plus uncertainty in risk factors does not equal certainty. What I hope to gain from the testimony of the first panel today is a better understanding of the risk issues. I am pleased that we have some divergent viewpoints by members of the panel and hope they can shed some light on the risk issue. The second panel today will discuss the implementation issues. This area has not received the attention it deserves in the public debate. While implementation issues will become more important as the EPA proceeds, they do need to be discussed before the proposals are finalized. Because of that, we have invited several members of the EPA's Advisory Group for Implementation Issues to appear here today. I'm concerned that the planned implementation for these proposals is not reflected in the projected impacts. The EPA is planning to change the method of defining nonattainment areas. The proposals have created two new concepts--areas of violation and areas of influence. [Indicates chart.] Senator Inhofe. If you look over here, we don't have the entire United States; this is a chart I understand that came from the EPA and we talk about the very small circle in the middle as being those areas that could be out of attainment but it's very vague on what is expected in the other areas. This chart represents what the EPA is considering for implementation areas. If members have not seen this, I suggest you look closely and particularly you, Senator Sessions, because you don't really know what additional problems are going to be there. Most people have been under the wrong assumption that these proposals would only affect the nonattainment areas defined by the EPA. As you can see on the map, from only three nonattainment areas, the majority of five States would be affected. While this is only a strawman map and as it says on the top, ``conceptual only,'' the concept concerns me. The boundaries themselves could end up being larger or smaller. The fact that it's being considered needs to be addressed. The people who live in these areas, as well as the mayors, Governors, and even Senators, have had no idea that these regulations would apply to them. The importance of this cannot be underestimated. The people in these communities lost the opportunity to comment during the comment period. I suspect that if a lot of people had seen that map prior to the end of the comment period, there would have been a lot more comments. I hope this issue as well as other implementation issues will come out during our second panel. We have two good panels of witnesses today and I look forward to your testimony. [The prepared statement of Senator Inhofe follows:] Prepared Statement of Hon. James M. Inhofe, U.S. Senator from the State of Oklahoma The hearing will now come to order. Today's hearing is the third subcommittee hearing on the proposed new ozone and particulate matter standards and the fourth for the Committee. The first hearing focused on the scientific issues. At the second hearing, a full Committee hearing, we received testimony from Administrator Browner. The third hearing was a field hearing in Oklahoma City where we received testimony from State and local government officials. Today we turn to risk and implementation issues. This will be followed by a hearing this Tuesday which will focus on the impacts of the proposals. I am troubled by the risk issues surrounding these regulations. The risk analysis is necessarily based on the understanding of the science issues. But we learned in our science hearing that there is great uncertainty on the scientific side. When we add that to the uncertainties in the risk assessments, we end up with very dubious results. Since our last hearings, we have learned that the EPA greatly overestimated the impacts for both ozone and PM, and they have had to publicly change their figures. In addition, we have learned that they selectively applied some study results while ignoring others in their calculations. For example, the majority of the health benefits for ozone are based on one PM study by a Dr. Moogarkar, even though the Agency ignored the PM results of that study because it contradicted their position on PM. What I find most troubling is that first the science is unclear and incomplete and that these uncertainties are then added to the uncertainties of risk calculations which must result in great uncertainty. But the EPA has postured these results as being the concrete facts, even though other Federal agencies have raised as many questions about these proposals as outside interest groups. Public policy decisions must be open and above board. Uncertainty in science plus uncertainty in risk does not equal fact. What I hope to accomplish in the first panel today is a better understanding of the risk issues. I am pleased that we have some divergent viewpoints on the panel. I hope they can shed some light on the risk questions. Our second panel today will discuss the implementation issues. This is an area that we have so far ignored and is not receiving the attention it deserves in the public debate. While implementation issues will become more important as the EPA precedes, they do need to be discussed before the proposals go final. Because of that, we have invited several members of the EPA's advisory group for implementation issues to appear here today. I am concerned that the planned implementation for these proposals is not reflected in the projected impacts. The EPA is planning to change how nonattainment areas are defined. The proposals have created two new concepts, Areas of Violation and Areas of Influence. This chart, represents what the EPA is considering for implementation areas. If members have not seen this, I suggest you look closely. In addition to requiring control measures in nonattainment areas, the EPA plans on requiring additional measures in these Areas of Influence. Most people have been under the wrong assumption that these proposals would only effect the nonattainment areas identified by the EPA. But as you can see on this map, from only three nonattainment areas, the majority of five States would be affected. While this is only a straw man map, and as it says on the top, conceptual only; the concept concerns me. The boundaries themselves could end up being larger or smaller, the fact that it's being considered needs to be addressed. The people who live in these areas, as well as the mayors, Governors, and even Senators have had no idea that these regulations would apply to them. The importance of this cannot be underestimated. These people and communities lost the opportunity to comment during the public comment period because their counties were not identified by the EPA as nonattainment areas. These proposals have been portrayed as only affecting certain areas when, in fact, they will impact the entire Nation. I hope this issue, as well as other implementation issues will come out during our second panel. We have two good panels of witnesses today and I look forward to your testimony. Senator Inhofe. I will now turn to Senator Hutchinson for any opening comments he might want to make. OPENING STATEMENT OF HON. TIM HUTCHINSON, U.S. SENATOR FROM THE STATE OF ARKANSAS Senator Hutchinson. Thank you, Mr. Chairman. I want to commend you for your willingness to take on this very difficult issue. Too often, I think regulatory agencies are able to implement new standards and new regulations without any close scrutiny or necessarily the kind of focus that should be placed upon them. So thank you for leading this and for calling this issue today. I'm very happy that we can continue our study of the EPA's proposed clean air standards. About 2 months ago, we held the first hearing on the proposed standards. In this hearing, I learned very important information regarding the scientific basis behind the EPA's proposal. It was very clear that the CASAC scientists themselves did not agree on the standards proposed and they certainly did not agree that everything EPA has done is in accordance with the recommendations of CASAC. I must admit that in some ways I am amazed that we're still debating some of the issues that we are today. Since the science hearing, it has come out that several Government agencies have opposed these standards with, to my knowledge, no response from EPA. I've heard from hundreds of constituents, not just industry officials but the average citizen, strongly opposed to these new standards. I've seen editorials and articles from papers all over the Nation outlining weaknesses in the proposal and opposition to it. All of this has gone on in the last 2 months, yet we've heard very little from EPA. There's been no good faith effort, in my opinion, on the part of EPA to address these very legitimate concerns. I find this situation disturbing, especially the lack of response to the Government agencies opposing the standard. Instead, we have heard Administrator Browner claim that they have the scientific basis and justification for the standards. Unfortunately, this science is considered in many cases either valid, weak, or contradictory. In Arkansas, the EPA has become one of the most despised agencies. Perhaps in the month of April with IRS, it might exceed the hostility level, but the EPA is viewed as being heavy-handed, oftentimes arrogant and it seems this level of disrespect I think goes beyond the average Arkansan. Recently, I found out that some of the comments made by Dr. Schwartz in the first hearings were misleading at best. He testified that the United States is behind the rest of the world in clean air standards. Now we come to find out that is really not the case at all and yet Dr. Schwartz testified and led us in that direction--I think misled us in that direction. It troubles me and I think it should concern every Senator on this committee and every Senator in the U.S. Senate. Dr. Schwartz's studies are the primary studies the EPA has used to set the PM standard. Yet, these studies have not yet been made public. We are relying, in effect, on unchecked research of someone who has not been fully forthcoming to this committee. This concerns me greatly. I think Dr. Schwartz should provide us an explanation or an expansion on his comments to us. In the first hearing, I submitted a question to Mr. McClellan regarding the possibility that under certain circumstances, even if all manmade VOCs, volatile organic compounds, were eliminated, would it be possible for some regions of the country to find themselves out of attainment and he responded that was the case. Basically, under the current Clean Air Act, some areas could do everything possible to eliminate manmade VOCs and still be out of attainment. The EPA is determined that for these areas NAAQS must be regulated. What that would basically mean is that the Clean Air Act would have to be reopened. I don't think we desire to do that in order to regulate this area. Mr. Chairman, in short, there are many unanswered questions on these standards and I'm really surprised that there has been no attempt on the EPA's part to really come to the table and discuss the issues that have been raised and the concerns that have been expressed by this committee. I want to thank you for the opportunity to continue the hearings and to continue to explore what I think will be a far- reaching impact upon not only our local and State governments, but upon each of our citizens. Senator Inhofe. Thank you, Senator Hutchinson. I also thank you for attending the field hearing out in Oklahoma. Out there, we saw what the people in the field thought. I might add at this point, this is not a partisan issue. The second panel we had in our Oklahoma field hearing, all of them were Democrats and they had very, very strong feelings, as you recall. Following the ``early bird'' rule, we'll turn now to Senator Sessions. OPENING STATEMENT OF HON. JEFF SESSIONS, U.S. SENATOR FROM THE STATE OF ALABAMA Senator Sessions. Thank you, Mr. Chairman. I'd like to thank you for your work on this important issue. We're moving along very fast and I'm afraid we're considering adopting issues that could have great impact on our communities. It was remarkable that I think we had the official representative of the National League of Cities speaking strongly in opposition to the proposed regulations. Senator Inhofe. And the U.S. Conference of Mayors. Senator Sessions. And the State Legislatures, from Representatives, the chairman of the environmental committees, national presidents of those organizations, as I recall, were absolutely and firmly in opposition to it and had some very disturbing things to say about the possibilities that these regulations would impact adversely their growth and economic vitality. Obviously, what we've learned is that nations that are strong and healthy economically do a better job of cleaning up their envi- ronments. If you're doing well financially, you can afford to make the investment easier than you can if you're not and the poorer nations, we can see, just simply are not able to do so. So we need not underestimate the damage that can be done if we impose regulations that don't improve health commensurate with the economic burden that it may place on our people and our industries. We should note in a very positive way how much the air has been cleaned up in the past 25 years. Measured pollutants have been reduced nearly one-third with sulfur dioxide, the main precursor, to acid rain being reduced by 30 percent and particulate matter being reduced 78 percent. The standards we have in place now are working and many, many communities are continuing to clean up their air. Moving forward with these changes will affect the lives of many people. We need to make sure that we are, in fact, receiving health benefits. We want to hear from these panels, but I will say this-- it's important to me that the Environmental Protection Agency, when it states its position before this committee, that its numbers are verifiable. EPA is suggesting, for example, in their cost-benefit analysis that they have done, that implementation of this standard will cost $6 to $8 billion. I met with the environmental person for TVA. It would cost $2 billion alone for TVA to comply with these new standards. One of the power companies in the southeast said it would probably cost them $4 billion. Other estimates have been $60 to $100 billion to meet these standards. We need to get better numbers. We need to get better numbers about health; we need to get better numbers about costs, and we need to make sure that the policy we're setting today as public officials is based on science and health and not on politics or other reasons. Senator Inhofe. Thank you, Senator Sessions. Senator Allard. OPENING STATEMENT OF HON. WAYNE ALLARD, U.S. SENATOR FROM THE STATE OF COLORADO Senator Allard. Thank you, Mr. Chairman. I want to thank you for continuing to seek to get the scientific truth on these issues as chairman of this committee. I commend you in your efforts in that regard. I do have a full statement for the record, and I will make a few brief comments. Senator Inhofe. Without objection. Senator Allard. We've heard from the Environmental Protection Agency earlier, specifically from Carol Browner, and I was one member of the committee who challenged the scientific basis for some of the claims she was making and challenged her to come up with some better science. Instead of coming up with better science, she just downgraded her figures. This is not a political give-and-take situation as much as this committee is searching for good, scientific evidence to help us in making the right decisions, to ensure the health of the people of this country. I'm looking forward to being able to review the record, and I commend you for seeking that science. The other comment I'd like to make is I think those regulations being promoted by the Environmental Protection Agency set up local governments, particularly States, to fail because I'm not convinced they have the technical ability to actually meet the challenge that is called for in the rules and regulations. Again, we're getting down to the best available technology and the ability of the States to carry forward with that technology and good science. Those are just some of the brief comments I have. I'm going to have to leave early because of this debate--I serve on the Intelligence Committee. I apologize to the panel members for not being here. I do have some questions that I'll ask the committee and my staff to submit to those who are testifying. Thank you, Mr. Chairman. [The prepared statement of Senator Allard follows:] Prepared Statement of Hon. Wayne Allard, U.S. Senator from the State of Colorado Thank you, Mr. Chairman. Today's hearing is of great interest to me because we will focus on the nuts and bolts of the proposed regulations; first whether they will actually contribute to better health and second whether they can be implemented effectively. Also, this will allow me the opportunity to follow up on questions concerning the Grand Canyon Visibility Project Commission that I had for Administrator Browner in early February. First, is the issue of the health benefits that have been projected if these regulations should be implemented. I believe we have given the EPA every opportunity to prove that the benefits they claim will actually occur. Instead of proving their original claims they have downgraded them and witnesses today will testify that even these revised numbers may not hold up under scrutiny. If the EPA is uncertain, I think Congress has the obligation to approach their proposal with some skepticism. Second, the implementation of these regulations could very well place too much of a burden on States and set them up for failure. My view is that EPA should not run out in front of the States' technical ability to implement Federal regulations. Further, testimony that we will hear today indicates to me that the limited technical and financial resources of State governments was not considered before these rules were proposed. Finally, I am still concerned with regional haze issues. I have a series of questions on this matter and, should I have the time, I look forward to posing them to Ms. Nichols. Thank you again, Mr. Chairman. Senator Inhofe. Thank you, Senator Allard. I also have a statement from Senator Boxer that will be placed in the record. [The statement of Senator Boxer follows:] Prepared Statement of Hon. Barbara Boxer, U.S. Senator from the State of California Mr. Chairman, I believe that as Senators, we have no greater duty and responsibility than to protect the health and safety of the American people. With this in mind, I would like to make two points today. First, I want to say very clearly and strongly that EPA clean air standards must continue to be based on science and health concerns. The EPA proposal before us is based on the best available science regarding the health effects of exposure to ozone and particulate matter. Some argue that we should not set a new standard until we have scientific proof of the exact relationship between exposures to ozone and particulate matter, and health effects. If we had applied that principle in the late 1970's, we would not be enjoying the benefit of our current standards--which have led to, for example, air pollution from carbon monoxide being reduced by 28 percent, from sulphur dioxide 41 percent, and from lead 98 percent. We must continue medical research to improve our understanding. We clearly need more monitoring data on particulate matter. But this should not make us lose our focus on the need to continue making progress and further protect the public health--especially our children. Young children constitute the largest group at high risk from exposure to air pollutants. They breath 50 percent more air by body weight than the average adult. In California alone there are over six million children under the age of 14 and approximately ninety percent of them live in areas that fail to meet State and Federal standards. The second point I want to make, is the importance of taking costs into account once the health-based standards are set. Costs should and will play a key role in how the standard will be implemented and how long States will have to comply. In California, the South Coast Air Quality Management District is responsible for cleaning up the L.A. basin, which has the most polluted air in the country. The South Coast Air District faces some of the most intractable and complex air pollution problems, in an area where nearly every possible source is already regulated. Yet the District supports the EPA proposal. Why? Because they believe that more stringent standards can be met as long as technology continues to develop, and the State is given sufficient time to develop an implementation plan that is cost effective. Mr. Chairman, I think we need to continue to listen to all sides in this debate before we make a final judgment. I am confident that EPA will seriously consider each one of the thousands of public comments it has received before making a final proposal. Lastly, I want to welcome Pat Leyden, the Deputy Executive Officer of the South Coast Air Quality Management District who will testify in the second panel. I think she makes key points in her testimony about the effectiveness of market-based strategies to reduce emissions--in particular the Regional Clean Air Incentives Market (RECLAIM) program. I look forward to continued work with Committee members on this important issue. Thank you. Senator Inhofe. We will be moving this right along because I think most people are aware that we're having an executive session on the Chemical Weapons Convention today and we want to get up there in time for that. I'd ask our first panel of witnesses if you'd take your places at the table. The way we have divided the panels today is to start with experts in the field of risk analysis. The second panel will consist of persons responsible for implementation of the proposed standards should they be issued. While you're coming forward, I'd like to give you an overview of how we will proceed during this public hearing. We have 12 witnesses today, so what we're going to try to do is your entire statement, as you've been told, will be submitted for the record, but we will be timing witnesses and we're asking you to stay within the time limit for your opening statement of 5 minutes. These lights will give you the designation as to when you should stop. Following 5 minutes of comments by each of the witnesses, I will then ask any member of the subcommittee if they'd like to ask questions. Then we will have a round of questions and answers. I think we're ready to begin, so let me introduce the members of the first panel. We have Dr. Kenneth Chilton, Center for the Study of American Business, Washington University. I put two kids through that university. Next is Dr. Alan Krupnick, Resources for the Future; Dr. Thomas Star, principal, ENVIRON Incorporated; Ms. Susan Dudley, Economists Incorporated; Dr. Carl Shy, Department of Epidemiology, School of Public Health, University of North Carolina at Chapel Hill; and Dr. Morton Lippmann, Institute of Environmental Medicine, New York University. With that, we will start with Dr. Kenneth Chilton. STATEMENT OF DR. KENNETH W. CHILTON, DIRECTOR, CENTER FOR THE STUDY OF AMERICAN BUSINESS, WASHINGTON UNIVERSITY, ST. LOUIS, MO Dr. Chilton. Thank you, Mr. Chairman. I'm in your debt for being able to testify today but after hearing that you have had two daughters attend Washington University I understand that you may well be in our debt as well. I'm the director at the Center for the Study of American Business at Washington University in St. Louis. I've been researching clean air issues for some 15-odd years. The comments I'm making this morning, of course, are my own and not necessarily those of the Center or of Washington University. The scientific evidence on ozone, I believe, is extensive. Ozone can cause coughing, wheezing, tightness in the chest, reduced lung function, which is reduced volume of air exchanged with each breath. These effects are related to both ozone concentrations and exercise levels. Healthy people typically experience less than a 5-percent loss in lung function, even when exercising vigorously at levels that are twice the current standard. Doctors don't consider loss of lung function of 10 percent or less a significant health effect. The person would not notice a loss this small. The primary concern, of course, is for the effects on asthmatics and others who are especially sensitive. The EPA staff report estimates that for each 1 million persons exposed, we can expect just 1 to 3 more respiratory hospital admissions a day for each 100 ppb increase in ozone levels. This is actually a very low incidence rate and a very high elevation in ozone levels. This effect has been translated, as everyone here knows, to the expected numbers of added annual asthmatic hospital admissions for the New York area. EPA projects that attainment of the new standard would lower admissions to 300 per year. This is just 1/10th of 1 percent of the 28,000 yearly asthmatic admissions in New York City--a very, very small number. On fine particles, the science is not so well developed, as you know. The EPA still projects, however, significant reductions in premature mortality to result from meeting a new fine particle standard. These projections are based not on thousands or even hundreds of studies but, in essence, two. These reports indicate an association between PM<INF>2.5</INF> levels and death due to cardiovascular and pulmonary causes together and also a link between PM<INF>2.5</INF> and death from all causes. It's curious that the link is not between fine particles and death due to respiratory disease or lung cancer alone. Medical science has not yet discovered a plausible mechanism to explain how fine particles cause any deaths. These studies also fail to control for other variables, temperature, humidity, or the existence of other air pollutants--that may cause the mortality rates to rise and fall with, and thus appear to be caused by, fine particle concentrations. The lack of air quality data for PM<INF>2.5</INF> is another serious problem. EPA Administrator Browner, when she testified here, said that there are 51 PM<INF>2.5</INF> monitors collecting air quality data at present. That contrasts with 972 ozone monitors and 1,737 PM<INF>10</INF> monitors. EPA had to project PM<INF>2.5</INF> concentrations for many cities in order to derive its mortality estimates. Let me get to the recommendations. EPA is not required to tighten the ozone standard or to create a new PM<INF>2.5</INF> standard. For ozone there is little evidence that a tighter standard is warranted and would be more protective. For fine particles, the science is just not adequate to warrant a new standard. More could be accomplished for public health by staying the course for another 5 years than by disrupting this process with a new set of targets. However, the most important issue being raised by these air quality standards reviews is, by and large, being ignored, I believe. As you're well aware, the Clean Air Act requires the Environmental Protection Agency to establish and enforce air quality standards that protect public health with an adequate margin of safety. That's the mandate. In that process, it proscribes the consideration of economic factors. This is a very high-minded objective. It sounds good to say that air quality standards are to be set only on the basis of public health, but responsible public policy requires balancing incremental benefits and incremental costs. Spending more on one activity than it brings about in added benefits means that resources aren't available for other beneficial uses. Current ozone standards already require expenditures between $4 and $28 to produce $1 in health benefit. The tighter standard proposed only worsens this unfavorable tradeoff. Moreover, the physical responses to ozone can be demonstrated at levels produced by natural processes. As a result, the prime directive of the Clean Air Act has become mission impossible for ozone. The Clean Air Act Scientific Advisory Committee put it this way. ``The paradigm of selecting a standard at the lowest observable effects level and then providing an adequate margin of safety is no longer possible.'' I suppose CASAC would call this ``paradigm impossible'' instead of ``mission impossible.'' In my opinion, EPA should appeal to Congress to reform the Clean Air Act. The Act's fundamental objective needs to be changed from this wishful thinking of protecting the public health with an adequate margin of safety to protecting the public health against unreasonable risk of important adverse health effects. Benefit costs analyses should be required, not proscribed, when setting air quality standards. The American people expect to be protected from air pollution that might significantly impair their health. They do not expect, however, that the cost of doing so will be all out of proportion to the benefits. Thank you. Senator Inhofe. Thank you, Dr. Chilton. We've been joined by the Chairman of the full committee, Senator Chafee. Senator Chafee, do you have any comments to make before we hear from our next witness? OPENING STATEMENT OF HON. JOHN H. CHAFEE, U.S. SENATOR FROM THE STATE OF RHODE ISLAND Senator Chafee. Mr. Chairman, I don't want to interrupt. I do have a statement which I will ask be put in the record. I want to thank you for holding these hearings in your subcommittee. Unfortunately, I can only stay a short time, but I did want to come by and see what's up and obviously I will have the advantage of reading the testimony that's been submitted. Thank you very much. [The prepared statement of Senator Chafee follows:] Prepared Statement of Hon. John H. Chafee, U.S. Senator from the State of Rhode Island Mr. Chairman, one of the most troubling aspects of this complicated EPA proposal is the mismatch between the public health threat that is presumably posed by fine particles and the schedule for actually reducing emissions of this pollutant. On the one hand, Administrator Browner has told us that 15,000 Americans are killed each year by elevated levels of particulate pollution and tens of thousands more are hospitalized. Although many have urged that her decision now scheduled for July be postponed so that we could expand the scientific foundation for a new standard, EPA speaks of the problem in terms that communicate a public health emergency. On the other hand, we will learn at this hearing that the first regulations to actually reduce fine particulate pollution under the Clean Air Act will not be in place until the year 2005 or later. Today, we have few monitoring stations that can measure fine particulate pollution. Once the monitors are put in place, we must collect data for 3 years to determine which areas violate the new standard. States with nonattainment areas are then given 3 more years to write plans to reduce emissions. And it is only after EPA has approved these plans--a step that frequently takes a year or more--that regulations to improve air quality are adopted by the States. This is a very important hearing because it allows us to explore the apparent disconnect between the rhetoric used to describe the problem and the timeline for acting on solutions. One lesson that we may take away from this hearing is that we do have time to improve our understanding of the health threat posed by this type of pollution before we commit vast sums to a new regulatory program. In my view, it is very important that we make the best possible use of this window for better science. Attaining this new standard for fine particulates everywhere in the Nation would take a very substantial effort--perhaps $20 billion per year or more. EPA will not be able to follow through on that kind of effort without a substantial public consensus as to nature of the health threat. That consensus does not exist today. But it can be built with more science and public education. Senator Inhofe. Thank you very much, Senator Chafee. Dr. Thomas Starr. STATEMENT OF THOMAS STARR, PRINCIPAL, ENVIRON INCORPORATED Dr. Starr. Good morning. The comments I offer today are drawn principally from two recent consulting projects in which we conducted a critical examination of the scientific evidence for potentially causal associations between particulate matter exposure and adverse human health effects. In the first, undertaken on behalf of the American Petroleum Institute, three world renowned epidemiologists--Drs. Raymond Greenberg from the Medical University of South Carolina; Jack Mandel from the School of Public Health at the University of Minnesota; and Harris Pastides, School of Public Health at the University of Massachusetts--were brought together as an expert panel to independently and objectively assess the quality of the epidemiological evidence for associations between PM exposure and increased human morbidity and mortality. In the second project undertaken on behalf of Kennecott Corporation, an ENVIRON colleague, Dr. Larisa Rudenko and I also evaluated the case for such associations. In addition, we assessed the credibility of the health benefits that EPA has projected that would accrue from implementation of the proposed new standards for PM. My remarks today briefly summarize our findings. I refer you to the full report that I submitted to the committee for additional details. First, let me address the issue of causality, that is, whether the effects observed are truly caused by exposure to PM or specifically PM<INF>2.5</INF> or some other component of air pollution or lifestyle. In assessing whether the results from epidemiological studies support a causal relationship, criteria developed initially by Sir Austin Bradford Hill are often applied. These include the strength, consistency, coherence, specificity, and temporality of the reported associations. Although not explicitly stated, the presumption exists that the validity of the association has been established prior to consideration of these other criteria. What this means is that estimates of the association strength have been shown to be free of significant biases and not significantly confounded by other variables. Our expert panel of epidemiologists and our own independent review both concluded that the studies of PM and human disease do not satisfy these conditions. They have inadequately addressed potential biases and they have failed to resolve satisfactorily the issue of confounding. Even if the issue of validity were to be set aside, the health criteria would still not be met. The reported associations are extremely weak; they vacillate between positive and negative based on the specific regression model that is used. As additional co-pollutants are introduced, apparent positive associations with PM attenuate in magnitude often to nonsignificance. Indeed, based on the criteria and strength of association, it's difficult to imagine a weaker case for causality than that posed by the data for particulate matter. Furthermore, the results of the studies are not actually as consistent as they might at first appear. For example, different exposure measures--mean daily level, maximum daily level, or some lagged estimate of TSP, PM<INF>10</INF>, PM<INF>2.5</INF>--have been linked with different end points such as respiratory disease, cardiovascular diseases, or total death. Also, temporal relationships between exposure and disease are not the same across studies, but with lag times varying from zero to several days earlier. In addition, a critically important component of coherence, a dose response, is at best weakly established only in a few studies. In virtually all of the epidemiological studies of PM, exposure levels have not been based on personal dosimetry but rather on stationary samples located in specific geographic areas. Individual subjects were thus assigned communitywide measures of exposure rather than individual measures. The lack of personal exposure limits the ability to conclude that any individual death or disease is linked to air pollution per se. In fact, there is a large body of data indicating that community sampler measurements rarely provide good estimates of individual exposures. Even if a causal association were to exist, these ecological exposure estimates that have been used would likely misrepresent the associations of truth strength. Equally important, the underlying dose response relationship may be significantly distorted with sharp, thresholdlike curves being smoothed into nearly linear shapes by exposure misclassification. Another major challenge to the case for causality relates to the fact that PM exposure invariably occurs in combination with exposure to other air pollutants such as ozone, carbon monoxide and sulfur dioxide. Because this mixture composition varies according to the source, the season, time of day, weather conditions and geographic region, and because PM is, itself, a complex and highly variable mixture, it has been virtually impossible to disentangle the potential adverse effects of PM or a specific fraction like PM<INF>2.5</INF> and those attributable to other confounding copollutants. The question of whether the course or fine particulate fractions are causally related to human health effects is one of great importance. If there is a causal relationship, then identification and establishment of a safe and acceptable level of PM will be a decision with enormous consequences. However, the severe limitations of existing studies prevent a conclusive judgment about causality. EPA's proposal for new PM standards is premature. The stated purpose for EPA's proposed standards is to provide increased protection against a wide range of PM-related effects. How confident can we be that the proposed new standards will lead to increased human health protection? The quantitative assessment conducted for EPA Abt Associates attempted to quantify the uncertainty inherent in the estimated health benefits from the new standards. This assessment is very thorough in its identification of the many weaknesses in the underlying data, remarkably frank about its necessary reliance on unproven assumptions, and surprisingly even-handed in its demonstration of the sensitivity and uncertainty analyses that the projected benefits might well be greatly exaggerated. Significant limitations of the benefit projections include the following. The projections have had to assume causation. Future reductions in specific PM levels need not necessarily result in any material health benefits. Senator Inhofe. Dr. Starr, you have to wind up here. You're going over your time. I think you may have an opportunity in the question time to cover that. Dr. Starr. Faced with such great uncertainty in the estimated magnitude of potential health benefits, it seems far more reasonable to me for EPA to initiate additional data collection and analy- sis activities on the health effects potentially associated with PM exposure. Implementation of the new standards could well make things worse rather than better. Senator Inhofe. Thank you, Dr. Starr. For those of you who are standing, there are many seats available, so feel free to sit down. Susan Dudley. STATEMENT OF SUSAN E. DUDLEY, VICE PRESIDENT AND DIRECTOR OF ENVIRONMENTAL ANALYSIS, ECONOMISTS INCORPORATED Ms. Dudley. Good morning, I'm Susan Dudley. I'm vice president and director of Environmental Analysis at Economists Incorporated. I have 20 years experience evaluating and developing environmental policy. In my career I've worked at both the Environmental Protection Agency and the Office of Information and Regulatory Affairs at OMB. Today, what I'd like to do is highlight a few key points from an analysis I conducted on EPA's ozone rule for the Regulatory Analysis Program at the Center for Study of Public Choice at George Mason University. This is a research and education program dedicated to advancing knowledge of regulations and their impact. It produces careful and independent analyses of agency rulemaking proposals from the perspective of the public interest. I would like, if I could, to put a copy of our comments in the record of these proceedings. Senator Inhofe. Yes, without objection. Ms. Dudley. These comments, as well as the program's comments on the particulate matter rule, are also available on Economists Incorporated's web site. Today, I'd like to highlight three major points regarding the risk assessment underlying EPA's proposed ozone standard. First, there is little scientific basis for the selection of the level of the standard. EPA recognizes that the selection of .08 ppm was a policy decision rather than a scientific decision. EPA's Science Panel did not find this level to be significantly more protective of public health than the current level of the standard. Moreover, most members of the panel who expressed an opinion preferred a level less stringent than that which EPA has proposed. Second, EPA's risk analysis suggests that the health and welfare benefits of this proposal will be small. The general population would not notice the difference in air quality as a result of the proposed standard and that's because, as Ken Chilton has said, the effects of ozone appear to be reversible and largely without symptoms for the majority of the population. Even for the population with the greatest risk, those with preexisting respiratory conditions, EPA expects the impact of the proposed change to be small. For example, with full implementation of the rule, which EPA does not expect for at least a decade, probably many, many decades, EPA predicts a .6- percent decrease in hospital admissions for asthmatics. Furthermore, evidence from animal studies suggests that long- term exposure to ozone does not affect lung function. Our third point is that the proposal may actually harm public health and welfare. The rule is based on risks to asthmatics, yet ozone is certainly not a determining factor in asthma. Asthma has been increasing over the last decade, especially among poor urban children, yet ozone has been declining steadily over the same period. NIH recently conducted a study that found the leading cause of asthma by far was proteins from cockroach droppings and carcasses, not air quality. Thus, this rule is raising false hopes and would divert scarce resources from more effective solutions to the very real problem of asthma. What's more, the proposed standard would increase health and welfare risks from ultraviolet radiation, yet this was not considered in developing the proposal. Ground level ozone has the same beneficial screening effects on ultraviolet radiation as stratospheric ozone. Based on EPA analysis used to support earlier rulemakings on stratospheric ozone, it appears that the proposed standard could increase the incidence of cataracts, skin cancers and melanoma fatalities. These negative effects appear to outweigh the positive health effects that EPA has attributed to the rule. Using EPA's data assumptions and model results, I quantified and valued the health effects from the increased penetration of ultraviolet radiation attributable to this rule. My analysis suggests that attainment of the proposed standard would actually increase health risks by over $280 million a year. That is net of the benefits that EPA attributes to the rule. When the costs of the proposal are considered, the negative impact on public health is even larger. A growing literature linking income and mortality suggests that the cost of this proposal would, by lowering incomes alone, induce more fatalities. That's something that I think Senator Sessions addressed in his opening remarks. In fact, if as recent studies suggest, poverty is a more important risk factor than air quality for asthma, the rule may well increase the very disease it is targeted at improving. Thank you. I'd be happy to answer questions. Senator Inhofe. Thank you, Ms. Dudley. Dr. Carl Shy. STATEMENT OF DR. CARL M. SHY, DEPARTMENT OF EPIDEMIOLOGY, SCHOOL OF PUBLIC HEALTH, UNIVERSITY OF NORTH CAROLINA AT CHAPEL HILL Dr. Shy. Thank you, Senator Inhofe. I was very pleased to see that I was placed on the right side of this table from the point of view of the audience. I think we're also on the right side of the argument as far as public health is concerned. I'm a physician and an epidemiologist. I've been involved in air pollution research for 30 years. I started my career with the Environmental Protection Agency and then moved to the University of North Carolina some 25 years ago. I was recently a member of the panel on Particulate Matter of EPA's Clean Air Science Advisory Committee and I'm here to support the proposal to establish a new standard for fine particulates. I agree with EPA's proposal that the PM<INF>2.5</INF> standard be established at a concentration of 15 <greek-m>g per cubic meter annual average. I think there are three compelling reasons for EPA to establish an air quality standard for PM<INF>2.5</INF> as proposed. The first reason is that I see and I think CASAC has also seen that there's ample evidence for a causal relationship between population exposure to fine particles and effects on mortality and morbidity in the population. There is ample evidence for excess mortality, for excess hospital admissions, for excess respiratory symptoms in adults and children and for decreases in lung function in children associated with currently experienced levels of particulate air pollution. The second reason is that given this causal relationship, the health burden of exposure to particulates in the United States today consists of thousands of excess deaths, hospital admissions, and respiratory disease episodes. These excesses can be addressed by a concerted program to lower the concentration of ambient air particulates. This program will bring a major health benefit for a majority of the U.S. population. The third reason I think there is compelling reasons to support EPA's proposed standard is that the Clean Air Act requires the Administrator of EPA to establish a national ambient air quality standard that avoids unacceptable risks and protects public health with a margin of safety. The risks that I've mentioned of thousands of deaths and hospital admissions I think are unacceptable and I think everyone would agree on that. The proposed PM<INF>2.5</INF> standard that EPA has really provides only a minimal acceptable margin of safety against the mortality and morbidity risks that we have observed. We've seen excess mortality and morbidity when PM<INF>2.5</INF> concentrations are no more than 10 percent above the proposed EPA standard of 15 mg per cubic meter. So even though the proposed standard may not actually be adequate, I think it will at least move our country in the right direction of greatly minimizing the currently unacceptable health burden. The rationale for saying that there is a causal relationship I think was very well spelled out in the air quality criteria document of EPA to which CASAC agreed and the members of CASAC included epidemiologists who had a great deal of experience in the health effects of air pollution, including Frank Speizer, Jonathan Samet, Mort Lippmann, my colleague here, and myself. I think that in contrast to the other persons mentioned earlier who did not agree with causality, the persons who have had a great deal of experience in epidemiologic studies of air pollution have agreed that there is a causal relationship established between particulate exposures and excess mortality and morbidity. Thank you, Senator Inhofe. Senator Inhofe. Thank you, Dr. Shy. We've been joined by Senator Lieberman and I'd like to ask if he, at this time, in introducing his daughter, would like to make any statement? Senator Lieberman. Thank you, Mr. Chairman. You anticipated my most significant announcement which is to express my pride in having my daughter, Hanna Rachel, with me. Would you stand briefly? Thank you. [Applause.] Senator Lieberman. Undoubtedly, a future Senator from the State of Connecticut. I won't say yet which party because you know how children are. Senator Inhofe. I'll work on her. [Laughter.] Senator Lieberman. I apologize for being late. I don't want to interrupt the flow of the hearing and when it's time for questions, I'll be glad to join in. Thank you. Senator Inhofe. Thank you, Senator. We'll now hear from Dr. Morton Lippmann who I think has become a regular around here. STATEMENT OF DR. MORTON LIPPMANN, INSTITUTE OF ENVIRONMENTAL MEDICINE, NEW YORK UNIVERSITY Dr. Lippmann. Not my own choice, but I am responsive to the will of the Congress. Dr. Shy, with whom I served with on the CASAC PM Panel, has clearly covered the high points of the necessity for a fine particle standard. I was asked today to talk about the ozone issue and the risk assessment for ozone. In the case of ozone, we understand some of the mechanisms very well and we have a huge body of clinical data which establishes some reversible but potentially important effects. So the problem there is the significance of small changes in lung function has been questioned as a basis for tighter control. I point out in my testimony that the field studies of ozone responses in people engaged in natural activities outdoors that I pioneered in my own laboratory document clearly that the chamber responses are a minimum response, and that for whatever reason, we can't fully explain, per unit of ozone people in natural settings have greater functional responses and that establishes a baseline but not the full risk associated with the acute responses. In our most recent paper published in February, we looked at asthmatic children and found physician-prescribed medication, as well as functional changes that would have to be considered adverse for this population. There has been a lot of attention to the hospital admission studies and certainly ozone is not considered a causal factor but many people have asthma and it does aggravate it. I call your attention to page 5 of my prepared remarks which show the pyramid of responses associated with ozone from a wealth of environmental and epidemiologic data. The EPA only took hospital admissions for asthma into account. There are equal numbers of nonasthma respiratory admissions. There is mortality and there's been a flood of new peer review data since the document was prepared, at least eight papers I've collected, that show greater associations with mortality and ozone, plus the hundreds of thousands of restricted activity days and asthma attacks which are documented in that chart. So I think the Agency did not fully explain the serious health effects associated with ozone. The pyramid also shows the coherence of responses. This is the progression of increased numbers with decreasing seriousness that one would expect if something real is happening. There are some very important effects that are poorly understood which are not covered in the document, primarily because of the absence of data. The evidence clearly indicates that the lungs age more rapidly, that they become stiffer. We are probably talking about reduced longevity, although that is speculative at this time. That's a margin of safety consideration which the Administrator is obligated, by law, to consider in dealing with evidence primarily only on the acute effects. I think it's important to reiterate that with all its limitations, this criteria document, the staff paper for ozone, are by far, in my opinion, the best that EPA has ever produced. They're more interpretative, they take all the evidence into consideration in a better way, and I can speak for experience since I've sat on every PM and ozone panel since 1980 that EPA has gone through. In the end, there are uncertainties and if we're going to be more efficient in addressing the ozone issue, we need to engage in research based on the questions that have become better focused and sharpened through this review cycle. I won't reiterate my previous written testimony responses to your earlier questions and so forth about the level of research that's needed, but ozone and particles are strongly interrelated and I note in my testimony this time that there will be benefits from controlling ozone that go beyond the effects of ozone alone. When ozone is formed, fine particles are formed. The presence of the oxidants in that mixture oxidizes SO<INF>2</INF> and NO<INF>2</INF> to form more fine particles. So by controlling ozone, we would be substantially reducing the presence and impact of the fine particles which Dr. Shy has been talking about. So some of those benefits EPA did not claim I think are legitimate claims for the reduction of ozone. I thank you. Senator Inhofe. Thank you, Dr. Lippmann. Dr. Alan Krupnick. STATEMENT OF ALAN KRUPNICK, SENIOR FELLOW, RESOURCES FOR THE FUTURE Dr. Krupnick. Thank you for inviting me to the hearing. I wanted to mention first that I was in the first Clinton administration on the Council of Economic Advisors and I chair EPA's Subcommittee on Ozone, PM and Regional Haze Implementation Programs but these comments are entirely my own. First, I wanted to applaud the Republicans for their openmindedness in inviting me here because I have somewhat of a mixed message. On PM, I favor a fine particle standard, but one less stringent than the Administrator has proposed. On ozone, I favor changing to an 8-hour standard but set at a level of stringency no more stringent than the current standard. I wanted to address my remarks to just a few points that have been in the debate, both in the EPW and in the press. The first is junk science as applied to PM. Of course there are major uncertainties with respect to the epidemiology, the toxicological mechanism and so on but nevertheless, I think the scientific record supporting a fine particle standard is actually more than adequate judging from the perspective of the information underlying previous NAAQS rulemaking efforts which, in my view, are pretty laughable compared to the amounts of information we have here. I think the Administrator is being prudent in issuing a fine particle standard and as to those who would wait until uncertainties are resolved, I say the best way to gain a better understanding of this pollutant and its consequences is to issue a fine particle standard now and that will get the country's attention. EPA needs to be mindful of the possibility of going in the wrong direction and needs to have a process that triggers speedy reopening of the NAAQS process and the SIPs to reverse direction if it looks like that is the way to go. The second issue is science versus policy judgment. Administrator Browner came before you cloaked in science as a justification for the standards but as the CASAC said, science doesn't lead to a bright line for either ozone or PM. There are no thresholds. I feel for the Administrator that the Clean Air Act is not really giving her criteria for making a judgment, so she has to use her own. With respect to ozone, I think they are making the wrong judgment, the ozone effects seem to be very small of a tighter standard, the costs are likely to be huge, and their risk assessment is highly flawed. In terms of backyard barbecues, industries use this analogy to dramatize the potential for invasive controls on everyday living and I have to agree with the analogy. In fact, one way or another, emissions coming from consumer sector activity will need to be controlled. Driving is going to be more expensive, inspection and maintenance programs are likely to have to go into new nonattainment areas. These are the areas where there are large emissions and they have to be addressed. We've heard from EPA that the cost estimates for industries are usually higher than they turn out to be, the industries' own estimates, but using EPA's own estimates, you find the cost of going partway to meeting the ozone standard will be $2.6 billion and partway to the fine particle standard will be $6 billion. This is only a little of the way down the path. Chicago, EPA finds, only can get 14 percent of the reductions it needs in trying to meet the new standard. The Northeast, for PM, only can get 16 percent of their reductions. There might be innovation and economic incentives that will hold down costs, but we're looking at much larger costs than EPA has written about. I wanted to agree with Susan Dudley on UVB risks. EPA refuses to look at these and they are a major issue. On the benefits of fine particles, we've heard that these are large dollar benefits based on valuing reduced mortality risks. From the work that I've done, I find this is based on a body count approach to risk assessment. It doesn't recognize that most of the effects are to older people with compromised health, really affecting the life expectancy of older people and by a very tiny amount. Using values that older people provide for increasing their life expectancy a tiny amount, as well as those from younger people who provide this information from reducing their future life expectancies, has the potential to dramatically lower these benefits. Finally, I've got to come back to Congress to say I think you should really fix the outdated criteria in the Clean Air Act for setting standards. Require that the Administrator consider benefits and costs of her actions, but of course consider this along with other criteria such as public health protection and equity and ethics. If we're going to appropriately allocate our resources, we simply have to have the Administrator considering the social benefits of her actions. Senator Inhofe. Thank you, Mr. Krupnick. We're going to proceed now and we're going to try to adhere to the same confinements that we've imposed upon you. Ms. Dudley, in your testimony you raised the issue of negative health effect and that was also referred to by Mr. Krupnick. You based your information on EPA data. You said they did not consider this in the proposal. Is that true? Ms. Dudley. Yes, that's true. Senator Inhofe. So the agency didn't factor these health costs into their benefit calculations? Ms. Dudley. That's right. There's a paragraph in the RIA that says they expect the UV-B effects will be small. Senator Inhofe. It's my understanding that the EPA was briefed on the health costs by the Department of Energy and I have the statement from the Department of Energy which I do want to submit to the record at this point because this actually makes comments on things far more serious than just UV radiation. They talk about HIV patients, skin cancers, cataracts and many other things there also. While we talked about decreasing ozone and the benefits, we didn't talk about the liabilities that go with that? Ms. Dudley. Exactly. Senator Inhofe. Mr. Starr, I'd like to focus on one statement you made in your testimony which I addressed in my opening statement which leads to my main concern with the risk analysis for PM and that's the uncertainty with the science leading to uncertainty with the risk. You said ``Although there is not a proven causal relationship between the health effects and PM, the EPA had to assume a causation in order to calculate the expected benefits.'' How does this assumption throw off the benefits projections? Dr. Starr. Senator, I think the important issue there is there is a certain probability that a causal relationship does not exist and if it does not exist, then implementation of standards may have, in fact, zero benefit. Also important is to consider that those benefits were calculated with essentially a straight line type relationship between exposure level and response. Ironically, because most of the days of the year are characterized by low or moderate levels of particulate matter, the projected benefits arise primarily from those days and not the days with high level exposure to particulate matter. That is the area where the relationship, if there is one, is most uncertain. We do not know if there is an association and particularly--specifically we do not know what the nature of it is at these relatively low and moderate levels of PM. Senator Inhofe. Dr. Chilton, in your testimony you stated, ``The upper bound benefit estimate of $1.5 billion in EPA's analysis for ozone results from the assumption that the proposed standard would save lives and that this claim is unsubstantiated.'' I think that's very significant. I'd like to ask you to elaborate on that. Dr. Chilton. That's where I guess Dr. Lippmann and I would disagree. I don't think any of the studies he's talking about that try to show premature mortality relate to the kind of exposure levels that we're experiencing in this country. Nowhere else in the discussion is EPA talking about mortality effects of ozone except in the regulatory impact analysis. Then, to estimate the high end of the benefits, they take into account mortality effects. It's inconsistent, if nothing else. Senator Inhofe. Would you say that fine particles don't cause deaths? Dr. Chilton. This is ozone we're referring to here, I believe. No, with fine particles, I just say the case is out on their effects. The science isn't sufficient enough to warrant setting a standard at this time. I don't share Dr. Krupnick's optimism that if we launch into this brave new world that it will all come out in the end. I'm afraid we'll do a lot and it may not have any effect whatsoever, but it will be costly. Senator Inhofe. Do you want to respond to that? Dr. Krupnick. Just a little. It's not all that brave. We already are controlling sulfur dioxide which would reduce sulfate levels which is counted as a fine particle. As Dr. Lippmann said, we are already reducing nitrogen dioxides which also convert to fine particles. One issue I'd want to take up with Dr. Lippmann and mention to the committee is if we did not go further on ozone, we would not have to go as hard after volatile organic compounds, VOCs, as we would do if we tighten the ozone standard. I think that would save the country a lot of money for very little health risk. Senator Inhofe. In attempting to stay within my own time limitations, I'm going to jump to Dr. Shy. In your testimony, you state a proposed standard of 15 <greek-m>g per cubic meter for PM provides ``a minimal acceptable margin of safety.'' I would ask you how many other members of CASAC shared your view that 15 was minimally acceptable? Dr. Shy. It's difficult to tell because quite a few of the members of CASAC didn't express a numerical number. Senator Inhofe. How many expressed it? It's my understanding there were only two and those are the only two who are here today who agreed with that figure. Dr. Shy. Yes. One thing you have to realize is that many of the members of CASAC were not health risk experts or epidemiologists. Senator Inhofe. So of the 21 scientists, just the two of you had expertise in this area and were able to properly analyze this and come to this conclusion? Dr. Shy. I wouldn't say we were able to properly analyze, I'd say we've had in-depth knowledge of the quantitative levels of health effects and exposure that many other members of CASAC did not. Senator Inhofe. And the other 19 did not? Dr. Shy. Right. Senator Inhofe. Senator Lieberman. Senator Lieberman. Thank you, Mr. Chairman. This gets to what for me is at the heart of what is happening here. As you know, Mr. Chairman, I've generally supported the proposed standards, although I'm still learning and have some questions that I want to have answered on the understanding that the basic two-tier system that was established in the Clean Air Act is a sensible one which is that first, we have the obligation to try to reach a judgment, or the Administrator does, as to what the health consequences to people are of polluted air, and then, in the implementation phase, the system allows for the practical considerations, including costs. For instance, in Fairfield County, CT, the prevailing air quality standard, the county was given 17 years to come into compliance because of the difficulty of doing that. That, to me, represented a combination, to the best science can provide us, of the health standard and then allowing factors of practicality and cost benefit to be fed into on the second tier. I regret that I will not be able to listen to the testimony of most of you but I've gone over the written testimony submitted that we had before. Although obviously it's hard for those of us who are nonscientists to appreciate this, there are many occasions when scientists don't quite agree on where truth is. I don't know that I'd say there is artistry in science, but it's not always a question of two and two equalling four. Perhaps I should start with a broad question for any of you who would care to answer it, particularly those who are critics of these air quality standards as they've been proposed. Is your criticism that the science is bad or is your criticism that cost benefit doesn't justify the standards? If it's the latter, then my conclusion is that in the implementation phase, we'll take care of that, but if you disagree with that, I'd be interested in hearing why. Dr. Chilton. Dr. Chilton. I would like to comment on that. I do have a fundamental problem with the two-tiered approach. Absolutely, we need good scientific information, but I do not understand why we have proscribed having economic information. The strength of the economy has something to do with public health. It also has something to do with a lot of things that Americans value, as well as they value being protected from air pollutants. I once suggested in an op-ed that we can create an Association for Compassionate Economists. It sounds like an oxymoron, but economists are some of the few people looking at the issue and saying that we need to look at benefits and costs. We need to make sure that benefits outweigh costs. Incremental spending on one program must provide more benefits than cost, otherwise we're wast- ing resources. Those wasted resources even could be health- related resources. Senator Lieberman. But why do that at the same level? In other words, it's hard to do it with an operation but maybe if you went to your doctor and he gave you his best guidance about a condition you had and let's assume for a moment it's not life-threatening, and told you how much it would cost over your coverage, wouldn't you first want to know what the threat to your health is and then afterward decide whether you can afford to fix it? Maybe a less frightening analogy is some repair to your house which somebody who should know is telling you what you ought to do, but then you're going to decide as we do all the time whether you can afford it at that given moment or not. At least you want the first stage to be as close to the fact regarding risk as somebody can give it to you. Dr. Chilton. The problem is, though, that at the end of the first stage, we've already made the decision. You're already going to incur costs. It's just a question of whether you're going to incur less cost because you do things a little more intelligently. You've already made the decision. I often use the example of buying a car. Would you want to buy a Mercedes or a Chevrolet if all you cared about was quality? Well, you'd decide on the Mercedes. Then you can shop for friendly loan arrangements to try to reduce the payments for that Mercedes. If you looked at both quality and cost, you would have probably said, ``My budget won't afford a Mercedes, and I'm going to go with the Chevrolet.'' Senator Lieberman. For me, that's essentially different because there is no particular risk whether you're buying a Chevrolet or a Mercedes, but there is the home improvement fellow who tells you your roof is about to fall in or if the doctor tells you that you've got a health problem and the question is how do you begin to treat it, do you do the more expensive or the less expensive. Ms. Dudley. Ms. Dudley. I don't want to take up all your time but I looked only at the ozone rule and I think the rule is actually increasing health risks. Senator Lieberman. Because of the connection to the ultraviolet radiation? Ms. Dudley. The ultraviolet radiation and also the notion that if asthma is our concern, there are so many other ways we can address asthma and make people with asthma have better lives that are better than this rule. Senator Lieberman. Without telling kids they've got to go inside? Ms. Dudley. Right. I think more research on what is causing asthma is going to help a lot more children than this rule. Senator Lieberman. I was puzzled by that business about the ultraviolet radiation. Forgive me, I'm giving an extreme rendering of it but it almost sounds like the more ground level ozone we have, the better it's going to be for us because it's going to protect us from ultraviolet radiation. That can't be what you're asking because we know at some level people get sick from ground level ozone. My lay reaction to what you said is that you were mixing apples and oranges here, that 95 percent of the atmosphere is ozone and way up 30 miles above our heads. The ground level ozone is only about 3 to 5 percent of the total and that's what we're focused on here. Ms. Dudley. That's true. It's a real tradeoff though. These are real health risks, these cataracts, skin cancers, and deaths. Senator Lieberman. Sure. Ms. Dudley. They are just as real as the health risks from ozone. Some might even say more real. All I'm saying is that a policymaker needs to have that information. Senator Lieberman. This is my last question because the red light is on but aren't we taking care. Presumably we continue to implement the CFC prohibitions. Aren't we taking care of the stratospheric ozone level in a way that doesn't require more ground level ozone to protect us from UV radiation? Ms. Dudley. I guess that's a decision that policymakers should make, but it shouldn't be hidden. It should be explicitly addressed because it is a very real tradeoff. Senator Lieberman. Thanks, Mr. Chairman. I'm sorry I went over. Senator Inhofe. Senator Hutchinson. Senator Hutchinson. Thank you, Mr. Chairman. Ms. Dudley said, I think at one point in her testimony, that it would take at least a decade for implementation of these. In the hearing we had with Carol Browner, I outlined a time line which I think wasn't unreasonable in implementing the PM standard. Recently at a meeting with EPA, it was suggested that monitoring should begin as early as January 1998. Since EPA clearly didn't have the money to establish the monitoring outposts that would be necessary, the question was asked, where will the money come from to buy the new monitors? I think there are 51 on PM, 51 monitors nationwide, so where do we get the money to do that? EPA's answer was that it was expected that States have already begun to budget money to purchase monitors in preparation of the implementation to standard. So yesterday, we talked with the Arkansas Department of Pollution Control and Ecology to see if EPA's assertion was correct in Arkansas. Has Arkansas begun to budget money to purchase monitors? The response was about what I expected. They laughed. In Arkansas, they budget every 2 years. We just finished the budget cycle about a week ago. The next budget process will not begin until 1998, will not be finalized until March 1999. No new money would be available until at least July 1999. I don't know what the other State budget processes are like but I suspect they are similar which means the money available to purchase these monitors for a regulation that is not even being promulgated is a long ways from being there. So at least in Arkansas, monitoring probably could not be possible until sometime in the year 2000 at the earliest. If you assume a 3-year monitoring period, a year of technical analysis, State implementation plan proposals, et cetera, we're looking at the actual control of particulates sometime well into the next century, maybe even as late as 2006, 9 years away or a decade, is about what Ms. Dudley said. Dr. Krupnick, you may be right, it may be worth going ahead and doing this to get the country's attention, but I think surely there is a better way. My question is given the conflicting scientific evidence that we have, and I think Dr. Lippmann said there are uncertainties, at least in the ozone area, wouldn't it be just as productive to do the research on the issue for a few years to determine the best route to take on regulating PM and really get an answer to that question? Dr. Lippmann, it's my understanding at a recent House hearing on the standards, you testified that if given a choice between implementing the PM standards now or waiting 5 years and getting $50 million a year for research on particulate matter, you'd rather have the money for research and that makes sense to me. It would seem to me that would be the best use of very limited resources. Dr. Lippmann. No, that is not correct. I don't think you'll find it in the record. There was a hypothetical question by one member that stated, couldn't some of the same objectives be obtained by targeting, monitoring and research money as implementing the standard. In the particular context of the question asked, I said, much of the objective could be achieved, but I do not endorse delaying the standard. I think without the standard, we won't have the monitoring data. Monitoring data is useful for legal enforcement and in the initial case, as you suggest, for finding out whether enforcement will be needed, but in this field where we're looking at population responses, and for PM, that's what is driving it, human responses based on comparison of health responses to ambient levels. Only the existence of the standard will get that monitoring network in. I think I'd like to respond to what you just said in terms of the dollars. I participated in the CASAC Panel on the design of the monitoring system. EPA was very concerned about the cost of the system and I think they went a little too far in making it inexpensive. I think it might be better to invest a little more in monitoring and get more frequent and better data, so the monitoring equipment is not expensive. Arkansas or any other State does not need a separate budget. The budget of the agency which is now monitoring will not be greatly stretched by buying a few of these monitors. That's a false issue. Arkansas and the other States may have no choice, if monitoring is required, they're going to have to do it and they are going to have to find a few thousand dollars to buy a monitor. That's not an issue. We may, in fact, not enforce these rules until the next century but if we don't start now, we'll never start. Senator Hutchinson. Except that we may be imposing the wrong rules and not have the research. Dr. Lippmann. Clearly that is not the case now. Senator Hutchinson. I know that is your opinion but we heard lots of testimony over the preceding hearings that there is a lot of conflicting opinion and clearly, it is a policy decision that is being made. It may be the case that our biases are imposing our policy view on this, but it's not just science. There certainly is a differing opinion among the scientists who have testified. Mr. Starr, you said in your opinion, there would be zero benefit with the new standards. Ms. Dudley, you said--and this was kind of startling--your assertion that in fact the new standards would negatively impact health risks. I guess that's the UV. I think Mr. Krupnick said in fact he didn't think EPA adequately addressed those concerns. Dr. Shy, what is the answer to that? Why has that issue not been dealt with, the possible negative health risks that could be the result of these standards? Dr. Shy. I think many of them are claiming that ground level ozone is somehow going to protect us against ultraviolet light. It is really stratospheric ozone that is important, not ground level ozone. That point was made by Senator Lieberman. Senator Hutchinson. Indeed, he did. Ms. Dudley, could you respond to that? Ms. Dudley. EPA's analysis, if you look into it, indicates that it is total column ozone that matters, and ground level and stratospheric ozone both have the same impact on total column ozone. Senator Hutchinson. I know my time is up but Mr. Krupnick would you comment on this line? Dr. Krupnick. I have to agree there. Although there is only 3 percent of the total ozone column which is low level, these ozone benefits that we're talking about from tightening the standard are so small that they can be overwhelmed or maybe nearly overwhelmed by the small increment. Senator Hutchinson. Thank you, Mr. Chairman. Senator Inhofe. Thank you, Senator Hutchinson. We're a little bit ahead of schedule so while we're not going to have a second round, I want to ask if any of the members remaining would like to ask one additional question. We can do it and try to keep it down to about 2\1/2\ minutes. Before you came in, Senator Lieberman, we talked about what was going on over there and why we had to make sure to stay on schedule, so we can get back to our meeting. Dr. Krupnick, you support the PM proposal except you would apply cost factors and set the standard higher at 20 micrograms, is that correct? Dr. Krupnick. That's right. Senator Inhofe. You agree that we don't completely understand the mechanisms or which of the particles is the culprit, correct? Dr. Krupnick. Right. I say this this way just because to me the epidemiological literature on PM does tell a compelling story, a coherent story. There are lots of uncertainties, but again, as I said in my testimony, if you go back to when the ozone standard was set in 1977 or 1978, a handful of studies, incredibly primitive techniques, very little information, total policy call on the Administration's part. Senator Inhofe. OK, but I guess what I'm trying to get at also is you'd said Congress should bind the EPA in the event the evidence came along, they could fast track some legislation. If that should happen, would that reopen the Clean Air Act? Dr. Krupnick. I think there could be agreements made with EPA to develop a fast track process. You'd have to ask your lawyers about that, but there should be some fail safe measures put in so that we can reopen the NAAQS process quickly. Senator Inhofe. Last, on ozone, you mentioned the importance of selecting the appropriate number of exceedances. The EPA has chosen three and I recall you were here during our first scientific meeting. I remember Dr. Schwartz was saying the standards are much more stringent over in Europe. However, we found out in Europe, they are not 3, but 10 and that's in a period of 1 year instead of 3 years. Would you comment on how this would affect the U.S. standard and how the EPA should determine an appropriate number? Dr. Krupnick. This sounds like it's not an important issue, when you say three or four or five or six exceedances, but in fact, because the distribution of daily readings of ozone is so skewed, just increasing that number of exceedances from three to five could result in 200 fewer counties being in violation. So this is an extremely important decision and one the Clean Air Act criteria doesn't give the Administrator really any guidance on. Senator Inhofe. That's the point I'm making on this. Senator Lieberman. Senator Lieberman. Thanks, Mr. Chairman. I appreciate the opportunity to ask one more question. This goes to the basic two-tier system and the standards set in the first tier. Dr. Chilton, I didn't have a chance to hear you but I gather you spoke to an issue that I read in a Providence Journal article you'd written the lend of last year which was to recommend ``EPA should shift from the old paradigm of protecting the public health with an adequate margin of safety to a new paradigm protecting the public against unreasonable risk of important adverse health effects.'' In the context of the scientific uncertainty, it has been my conclusion that we ought to stick with the current standard which is protecting the public health with an adequate margin of safety and then fit in the practicality, including cost in the second tier. I worry in the recommended new standard that you've proposed that there's a lot of words there that are not scientific, in other words, for instance, unreasonable risk with the emphasis on unreasonable which is a tough word to define, and not only adverse health effects which EPA has been protecting us against with an adequate margin of safety, but important adverse health effects again, leaving some question about definition. Maybe I'd first ask Dr. Lippmann and then ask you to respond, based on your own experience on CASAC, how do you respond to Dr. Chilton's proposed change from the adequate margin of safety in terms of health to unreasonable risk of important adverse health effects and then I'd ask Dr. Chilton to respond? Dr. Lippmann. I think Dr. Chilton's language allows anybody to come to any conclusion they want. I think we've lived with the Clean Air Act language for many years and it has led to very great improvements in air quality and improvements in public health as a result of the reduction of air pollutants. Senator Lieberman. Am I not correct that EPA sets the standards not to protect against all identifiable effects but only against those that are adverse? Dr. Lippmann. That's correct and that's where the ozone effect on lung function comes in. It can easily measure small changes in capacity but we have trouble interpreting it as being adverse until it reaches a certain magnitude. So I think judgment will always be necessary, but I think as long as we choose to give great emphasis to the public health and look at populations at risk, not extreme individuals at risk as the EPA currently has been doing, I think the current rules are quite reasonable. In fact, in recent examinations of acceptable ozone levels, the trend is well below those proposed by EPA. The World Health Organization in Europe has just adopted a 60 or .06 ppm recommendation for ozone based on 8-hour exposure, not .08. In fact, the occupational health limit for workers who are adults and healthy enough to work is now .08 for moderate work and .05 for heavy work. So we're not talking about extreme degrees of protection; we're talking about only protecting to the level that healthy workers are being protected currently. Senator Lieberman. Dr. Chilton. Dr. Chilton. I'd like to respond to your question. I think we're stuck with the problem of words being ambiguous. I don't think we can define ``public health'' with no ambiguity. I don't believe we can define ``adequate margin of safety'' with no ambiguity. In point of fact, CASAC has said in its closure letter that the current paradigm is impossible. It will not work because we can find effects all the way down to background levels. So there is no adequate margin of safety possible. I don't know how you ignore that conclusion. I agree with that conclusion. I concluded that a long time ago and I was really thrilled to see that in print. The point of trying to go to an objective that prevents important adverse health effects and unnecessary exposures is that it gets around a problem that Milton Russell, a former EPA official, once described. Dr. Russell said that the Clean Air Act, the way it is currently written, protects against the effects of a common cold and cancer as if they were both the same and as many resources should be spent on the one as should be spent on the other. I think that is a fundamental flaw of the Clean Air Act. There is no differentiation of what is a significant public health effect. The interpretation of ``adverse'' is set at a very low level. If some small group of sensitive individuals are affected, that's an adverse effect. Whether it's reversible or not doesn't matter; whether it's lethal or something that is an acute effect is not taken into account either. Senator Lieberman. Thank you, Dr. Chilton. I understand your position but respectfully, I disagree with it because I'd prefer it to err on the side of the adequate margin of safety as opposed to opening up the doors of unreasonable risk of important adverse health effects. It's been a good exchange. Thanks, Mr. Chairman. Senator Inhofe. Thank you, Senator. I have one more question for clarification. Senator Hutchinson made a comment, Dr. Lippmann, and asked the question about going forward with the agency's PM proposal or in lieu of that, spending $50 million a year for 5 years on PM research and was implying that your position at that time was you would support that. You said that's not correct. I'd asked for the transcript of the meeting and I'll just read this for what it's worth because I think it is a little bit confusing. Representative Barton said, ``I think she's saying we would do the measurements, we would appropriate the money to do the measurements; we just wouldn't set a standard. I think that's what she said.'' Representative Cubin, ``Exactly. That's exactly what I said.'' Representative Barton, ``So would you oppose that?'' Dr. Lippmann. ``No. If in fact the situation were created where we were getting this information and the pressure is under the current Act to get the levels further down, we could get away with that. I doubt if that's going to happen.'' Is this an inaccurate statement? Dr. Lippmann. I stand by my earlier statement to you. It was a hypothetical and it wasn't inaccurate in the terms of responding to a hypothetical, but it's not my preferred position by any means. Senator Inhofe. Then you can have it both ways. Dr. Lippmann. If you interpret it that way. Senator Inhofe. All right. First of all, thank you very much all of you for coming. We appreciate it. I see there are no further questions and we'll move on now for our second panel, the panel on implementation. Our second panel consists of, again, Alan Krupnick--we're going to wear him out--Resources for the Future; Mr. Paul Kerkhoven, manager of Environmental Affairs, American Highway Users Alliance; Mr. Ben Cooper, senior vice president, Printing Industries of America; Ms. Beverly Hartsock, deputy executive director, Texas Natural Resources Conservation Commission; Ms. Mary Nichols--we know her very well--assistant administrator, Office of Clean Air and Radiation, Environmental Protection Agency; and Ms. Patricia Leyden, deputy executive officer, Stationary Source Compliance, South Coast Air Quality Management District. Welcome to the panel. Let's start off with Dr. Krupnick, again. STATEMENT OF ALAN KRUPNICK, SENIOR FELLOW, RESOURCES FOR THE FUTURE--CONTINUED Dr. Krupnick. I want to doubly emphasize here that I'm speaking from a position of experience as the co-chair of EPA's Federal Advisory Committee for Ozone, PM and Regional Haze Implementation Programs, but I am speaking for myself, not for what I'll call the FACA. My main message to you is that the proposed standards, if they become law, are likely to be incredibly expensive to implement and our FACA is working toward developing consensus ideas to try to reduce those costs. The Administrator has clearly endorsed cost effectiveness as a major criterion for developing an implementation strategy and I think Congress' job is to help EPA live up to this goal and remove any impediments posed by the Clean Air Act. For this testimony, I'm taking it as given that the proposed standards are going to become law and now I'm asking, how can we cost effectively get there. Some background on FACA since I'm going first here. The EPA established this now 82-person subcommittee to obtain advice and recommendations from a broad group of stakeholders on possible new cost effective approaches to attaining the NAAQS and reducing the regional haze. We were charged with thinking out of the box and out of the Clean Air box as well, if that was appropriate. The committee has reached few specific consensus recommendations and the subcommittee and associated work groups have been working, and also EPA staff, exceedingly hard and are making significant progress in identifying options, discussing the pros and cons of many critical issues, and deciding how to decide on which options are the best. Our subcommittee will continue through 1997 with the goal of providing EPA with input and perhaps consensus recommendations on issues critical to the development of their implementation strategy. We can't work miracles, it's a very large, diverse group. We get into a lot of tense arguments and I think the progress has been limited so far because the standards issue has not been settled. Once that issue is settled, I think negotiations are likely to become much more intense. There are a number of measures that have come out of our FACA that have come up, although they are not agreed upon by any means yet, that I thought I'd bring to the attention of the committee for reducing the costs of meeting these standards. No. 1, that I think does not require congressional action has to do with reasonable further progress reform. Serious consideration is being given to one, basing measures of progress on effective emissions which would account for the effect of a location of a source, its stack height and other factors rather than assuming that all tons are equal when the States go after emissions reductions under RFP. No. 2, giving States the flexibility to define RFP that's appropriate for their particular conditions rather than one- size-fits-all, and No. 3, permitting States to take credit in the present for emissions reductions that would occur in the future, such as through land use controls. Congress can do several things. The first is to affirm EPA's interpretation of the area classification section of Title I. This interpretation is that a change in the form and/or level of the ozone standard would invalidate this section. That affirmation is essential, I think, if the highly prescriptive and expensive mandates that are in the Act are to be able to be reexamined. The second is, I'm afraid to say, to open the Clean Air Act. I think the Act significantly restricts EPA's ability to implement cost effective ideas without compromising environmental protection. Let me give you a few examples. The first is facilitating the creation of a regional NAAQS trading program. In the FACA, if there is one thing we've agreed on, it's regional air management partnerships, or RAMPs, that are regional planning institutions that could help develop a NAAQS trading program. My fear is that we need Federal involvement to get all the States to play by the same rules. We need, I think, to eliminate LAER and BACT requirements, the tight technology requirements on new sources if there is a trading cap in place. We can't do that with the current Act. Congress should make it clear that episodic use of controls to reduce ozone episodes are creditable toward reasonable further progress and for use in attainment demonstrations. Although I'm sure Congress is reluctant, it should provide EPA with authority to require that States adopt specific cost effective policies and measures as part of their SIPs. This should come with a quid pro quo that EPA's requirements pass some sort of cost effectiveness test. Finally, on the Clean Air Act, I think Title II and Title IV need to be reopened as well in light of these new standards. Both of them can inhibit the use of cost effective approaches to meeting the standards. For instance, on the SO<INF>2</INF> Allowance Trading Program in Title IV, that has been pretty successful, but the cap may need to be tightened to meet these tighter, fine particle standards. My last plea is one that's already come up which is for Congress to increase a target funding for monitoring and make it a line item in the EPA budget so it can't be raided for other uses. Thank you. Senator Inhofe. Thank you, Dr. Krupnick. Ms. Mary Nichols, it's nice to have you back. STATEMENT OF MARY NICHOLS, ASSISTANT ADMINISTRATOR, OFFICE OF AIR AND RADIATION, ENVIRONMENTAL PROTECTION AGENCY Ms. Nichols. Thank you, Mr. Chairman. I'll try to summarize my testimony as well. I'm delighted to be invited back this time to talk about the implementation efforts that are associated with the EPA's proposed revisions to the National Ambient Air Quality Standards for Particulate Matter and Ozone. The history of the Clean Air Act over the past 26 years is one that we can all be proud of, that of working to make progress continually and bringing down the levels of air pollution and to do it at a time when our country has been growing both in population and in our level of domestic/economic activity. The Clinton administration views protecting health and the environment as one of its highest priorities and we have prided ourselves on protecting the most vulnerable among us, especially children, from the harmful effects of pollution. When it comes to the Clean Air Act, we take very seriously the responsibility that Congress gave us to set air quality standards that will protect public health with an adequate margin of safety, recognizing the difficulties in making those decisions based on the best science available. As you well know, at this point, we have only proposed revisions to the standards for these two important pollutants. We are in the process of very seriously considering all the public comments on these proposals before making any final decisions. We've heard from small businesses, industry, State and local governments, other Federal agencies, and citizens, including individuals who have various forms of lung diseases, doctors, and the public at large. While we have proposed specific levels for each pollutant, we've also asked for comment on a wide range of alternative options. We do not intend to make a final decision until we've carefully considered comments on all of those alternative options. Throughout the history of the Act, the national standards have been established based on an assessment of the science concerning the effects of air pollution on public health and welfare. Costs of meeting the standards and related impacts have never been considered in setting the national ambient air quality standards themselves and this has been true throughout six administrations and 14 Congresses and has been reviewed by the courts frequently. So we have a body of common law, if you will, on this topic. In choosing our proposed levels for the ozone and particulate matter standards, EPA's focus has been entirely on health risk, exposure and damage to the environment. Sensitive populations such as children, the elderly and those with asthma deserve to be protected from the harmful effects of these pollutants and, I think almost equally importantly, the American public deserves to know whether the air in its cities and counties is safe or not. That question ought not to be confused with the separate issues of how long it may take or how much it may cost to reduce pollution to safe levels. However, if we do revise any air quality standard, it is both appropriate and indeed necessary to work with States, local governments, and all other affected entities to develop the most cost effective, common sense strategies and programs possible to meet those new standards. Under the Clean Air Act, States have the primary responsibility and discretion for devising and enforcing implementation plans to meet the national standards. We are determined to work with States and others to ensure a smooth transition from efforts to implement the current standards to any efforts that may be needed to implement new standards. We haven't waited until the final decision to begin doing just that. By 1995, it had become apparent from the emerging body of science that we might have to propose revisions to one or both of these two standards, ozone and particulate, and that in order to fulfill our obligations to develop a regional haze program, new tools would be necessary. At that time, we determined the best way to meet the goal of developing common sense implementation strategies was to bring in experts from around the Nation to provide us with their advice and insights. As a result, we've used the Federal Advisory Committee Act to establish a Subcommittee on Ozone, Particulate Matter and Regional Haze. John Seitz, director of the Office of Air Quality, Planning and Standards in my office co-chairs that committee along with Dr. Krupnick who is here today. The subcommittee is composed of about 75 official representatives from State and local government, industry, small business, environmental groups, and other agencies. It also includes five separate working groups with additional members composed of another 100 or so representatives of these or similar organizations. The subcommittee and various groups have been meeting regularly for over 18 months to address strategies for EPA and the States to consider in implementing any revised standards. Indeed, much of their work will be useful to us even if EPA were to make the decision not to implement any revised standards because it's building on the work we're already doing today. The members from the various groups are putting forward position papers with innovative ideas and it's our belief that many important discussions are taking place. Basically, there are five important questions this group is considering and I'll just tick them off. One is the issue of deadlines. What should the deadlines be for meeting any new standards? Again, we assume there is an opportunity to either continue or to revise the system that was put in place in the 1990 amendments for dealing with various classifications of areas. What should be the size of an area that's being defined as a nonattainment area? Again, if there are revisions to the standards, EPA has a responsibility to determine what areas are nonattainment and to draw the boundaries. We know how contentious those issues can be. We also know more than we did even at the time the 1990 amendments passed about the issue of transport. That leads to the next issue which is how do we actually address, in a cost-effective manner, the problem that the pollutants that form ozone and fine particles are transported hundreds of miles and continue to operate in the atmosphere, to react in the atmosphere as they move into downwind areas. What kinds of control strategies are most appropriate for the various nonattainment areas? Can we use the experience of the past several years to help the States target those control strategies that are the most effective. Last, but obviously the most important of all, how can we promote market-based air pollution control strategies? All of these kinds of issues relate to the basic reality that revision of the revised standards is going to need to focus on the major emitters. We're talking about cars, trucks, buses, power plants and fuels. Those are the major sources and tools that we have to work with. In some areas, as with the current standards, we're seeing that reaching the standards will present substantial challenges. All the programs we're pursuing to meet the current standards for ozone and particulate matter will be needed to meet any new and revised standards as well. Everything we're doing today will be helpful in meeting any tougher standards that may be adopted. For example, the sulfur dioxide reductions that are achieved in the acid rain programs will greatly reduce levels of fine particles in the eastern United States. Senator Inhofe. Ms. Nichols, we're going to ask you to conclude your opening statement. You've run over the time. Ms. Nichols. I will. Thank you, sir. I'd just like to add that we've expanded the membership of the committee in order to include more small businesses as well as local governments in the interest of making sure that we have the widest possible participation and the Administrator has stated her intention to propose first steps in implementation at the time we announce our final decision on any revisions to the ozone and particulate standards. Thank you, Mr. Chairman. Senator Inhofe. Thank you, Ms. Nichols. We have been joined by Senator Baucus. Do you have an opening statement you'd like to make. Senator Baucus. Not at this time. Senator Inhofe. The next witness is Mr. Paul Kerkhoven. STATEMENT OF PAUL C. KERKHOVEN, DIRECTOR, ENVIRONMENTAL AFFAIRS, AMERICAN HIGHWAY USERS ALLIANCE Mr. Kerkhoven. Good morning, Mr. Chairman. Thank you for the opportunity to be here this morning. The transportation sector has played a major role in attaining the air quality goals realized by many areas across the country. We expect this role to continue. Carbon monoxide emissions from highway vehicles have been reduced by one-third, while VOC emissions have been cut in half. Today's cars have achieved at least a 95-percent reduction in tailpipe emissions since 1960 and it takes 20 of today's new cars to produce as much tailpipe pollution as only one car did 30 years ago. The reformulated gasoline for California is so effective, it's like taking 3.5 million cars off the road. That's twice the number of vehicles registered in the State of Oregon. In spite of these accomplishments and future progress, the EPA continues to advocate strict policies to control the growth of vehicle miles traveled. The agency pursues this misplaced policy by enforcing transportation control measures that discourage automobile use and advocate higher funding for the congestion mitigation and air quality programs to implement these measures. Mr. Chairman, a fundamental individual freedom, the freedom of mobility, is at stake whenever the Government proposes to restrict the ability of Americans to choose where, when and how to travel. There may be times when such restrictions are necessary but those decisions should not be made by our elected representatives and not by the subterfuge of a bureaucratic rulemaking procedure. Constraints on motor vehicle use and restriction of personal mobility are a serious obstacle to economic growth and productivity increases. One of the Clean Air Act's largest challenges are its conformity determination requirements. The conformity provisions were designed to ensure that transportation decisions made by State and local governments in areas out of compliance with air quality standards were consistent with the region's plan to improve the air. Failure to meet the conformity requirements by a State can lead to withholding of Federal highway funds. The implementation policy for the proposal states that the present conformity determination process will continue until State implementation plans that address the new standard are approved by the EPA. We question whether the current model intensive conformity process will still be meaningful with much larger nonattainment areas. For example, to make a conformity determination in rural areas will be a senseless and cumbersome exercise because in virtually all cases, there are few, if any, transportation alternatives. The proposal also will likely result in tighter emission budgets and make conformity an even more challenging process. The proposals do not address the cost effectiveness of the transportation control measures and these may be the most costly elements of further emission reduction efforts. Similarly, the highway funding sanctions could also affect larger areas. I question whether the EPA intends to impose highway funding sanctions on the 8-20 residual nonattainment areas in its partial attainment scenario. Transportation is a big part of the economic development equation. Projects to reduce congestion and expand capacity should be expedited, not burdened with new regulatory hoops. Congress established the Congestion Mitigation and Air Quality Improvement Program, also known as CMAQ, in ISTEA primarily to help State and local governments meet the cost of implementing the transportation control measures. The Highway Users oppose setting aside $1 billion of highway funds each year exclusively to meet costs imposed on State and local governments by the Clean Air Act. Those air quality improvement projects may or may not be a top transportation priority in a given area. The Highway Users support the efforts to eliminate separate CMAQ funding category and we question EPA's efforts to promote it. We would make air quality and congestion mitigation projects eligible for funding under a streamlined surface transportation program. As for the assertion that State transportation officials will not implement transportation control measures in their plans, if they do not have the specific setaside for them, we do not believe that. Mr. Chairman, the 1990 Clean Air Act mandates that State transportation officials give priority consideration to and provide for the timely implementation of transportation control measures in their clean air plans. It is not the CMAQ Program that drives these requirements. If attainment goals are not reached, the State faces highway funding sanctions. There is no greater incentive. This is the stick that forces each State and local official to craft transportation plans which include the right mix of projects to reduce emissions. The Administration's new highway bill also addresses the CMAQ issue and there are several provisions there that we support and do not support. We do not support the hold harmless provision for CMAQ funding, nor do we support the proposal that when a State submits its SIP, the CMAQ funding increase is triggered. Both provisions expand CMAQ funding at the expense of the more flexible STP account. If Congress chooses to retain a separate CMAQ account, we do support the Administration's proposal to fund two transportation control measures that are listed in the Clean Air Act, but were ex- cluded from CMAQ funding eligibility in ISTEA. In addition, congestion mitigation projects such as those that increase capacity for single occupant vehicles in ozone and carbon monoxide nonattainment areas should be eligible for CMAQ funds. Mr. Chairman, in conclusion, our central points are as follows. Current and emerging technologies will ensure the continuing decline of mobile source emissions without the new air quality standards. We should not burden vast areas of the country with new regulatory hoops the proposed standards changes will create. The transportation control measures needed to meet the new standard could cause significant economic hardship and I would like to echo comments of the U.S. Department of Transportation that it will require lifestyle changes by a significant part of the U.S. population. Finally, the Clean Air Act gives transportation officials strong incentives to make air quality projects a top priority. We urge Congress to give those officials a truly flexible STP program account that will allow them to weigh all their transportation needs, including air quality improvements, when establishing funding priorities. Thank you. Senator Inhofe. Thank you, Mr. Kerkhoven. Mr. Cooper. STATEMENT OF BENJAMIN Y. COOPER, SENIOR VICE PRESIDENT, PRINTING INDUSTRIES OF AMERICA Mr. Cooper. Thank you, Mr. Chairman. We appreciate the opportunity to appear before you today. I'd like to ask that the comments we make also be submitted in behalf of the Small Business Legislative Council, a coalition of almost 100 trade associations of which I serve as chairman. Senator Inhofe. Without objection. Mr. Cooper. I would like to say in the beginning that I also serve as a member of the Clean Air Act Advisory Committee and have since its beginning. I'm also a member of the Subcommittee on the Implementation of the New Proposed Standards. I have recently been appointed to a small industry review team at EPA to evaluate the impact of the standards on small business and other small entities. I'd like to say at the outset that while EPA has come under a lot of criticism in these standards and will probably continue to, I think it's fair to acknowledge that EPA, particularly recently, has done a great deal to reach out to the small business community and to try to bring us in. While we would like for this to have occurred earlier in the process, a great deal is being done now to bring us in more fully. I think it is also important to note that EPA has probably the strongest small business ombudsman program of any Federal agency and oversees a very strong State technical assistance program in dealing with implementation issues in the Clean Air Act. I think it's fair to acknowledge the positive work the agency has done. I'd also like to say from the outset that we wish the new standards would not be implemented. We don't feel they are necessary. Having said that, if the new standards are to be implemented, there are some areas we think are fairly critical, particularly in dealing with small business. First of all, we don't believe the Clean Air Act has been fully implemented and we don't think we have even begun to see the full positive effects of the implementation of the 1990 amendments. I know in looking at it from just the printing industry alone, we still do not have standards for the industry that are applied nationwide. There are many areas, technological issues, affecting the printing industry that have not been addressed. This is true in a number of small business sectors. Second, we're quite concerned about EPA's data base on which it calculates the emissions from various industries. This is another area where I have some sympathy with EPA. Frankly, the data base is flawed. The data base that calculates emissions from various industries is based on permits; those permits are those of large companies and industries such as ours. The permits are not based on actual emissions, but in fact, based on potential emissions and companies are virtually forced under their hopes for growth of buying more emissions than they may actually have so that the data tends to skew the emissions information a little higher than it is. As I mentioned, one of the big problems in a lot of small business industries is guidance isn't available to the States. While it may be nice to say that when you get down to the city or county level that these people are working very effectively with small business, as a practical matter, small business is treated as a group. It is sort of a regulatory carpet bombing. The regulations are sort of laid out there, small business is told to reduce by 10 percent, but without the guidance necessary to tell them how to do it. What this amounts to, in effect, is not so much a reduction of emissions, but a collection of fees because each one of these permits comes with a permit fee. So for many small businesses, they look at this as simply an environmental tax rather than a program of actually reducing emissions. We think the implementation plan that's under discussion may be superior to the current plan and we don't know, we haven't evaluated it fully, is going to be confusing to small business. As a native of Alabama, looking at this chart, if you're living in Gadsden, AL, you don't know which area of influence you're in and you don't know which area of violation you're contributing to. In fact, you could end up with jurisdictions giving you direction from different directions. One of my main concerns in this program is that we have not even addressed in the implementation strategy something Carol Browner has put a great deal of her efforts into and that is multimedia applications or alternative strategies for dealing with overall pollution reduction. We're one of the common sense initiative sectors at EPA. We think this clean air proposal ought to be run through those common sense sectors so that we can balance the media effects of different pollutants, not just air pollution. EPA has a major program underway called ECOS which is dealing with this same type of project. We think it's a golden oppor- tunity for EPA to change the method of operation in dealing with States. Finally, from a very parochial standpoint, the small business program of the Clean Air Act, known as the 507 Program which we were instrumental in getting included in the amendments to the Act, has not been fully implemented. If we go through with the implementation of this new standard without adequate guidance at the State level for small business, I'm concerned there will be chaos and I think we really need to address those very critical issues before we move ahead. Thank you very much, Mr. Chairman. Senator Inhofe. Thank you. Ms. Leyden. STATEMENT OF PATRICIA LEYDEN, DEPUTY EXECUTIVE OFFICER, SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT Ms. Leyden. Thank you, Mr. Chairman. I too will speak informally from my comments that you have. I regulate all of the largest industries, many medium and small industries in the South Coast Air Basin, and I'd like to talk to you today about the issues of implementation with the new standards. I think it is especially germane for the Senate to look at what types of sources will need to produce additional emission reductions, what kind of time will be allowed to meet those standards, and how can we accomplish these objectives at the lowest possible cost. To that end, I'd like to tell you just a little bit about our mass emissions trading program called Reclaim and then tie the discussion of that program to the matter before you today, the consideration of the new standards. Reclaim is the largest multi-industry, mass emissions reduction program in the United States. It covers nitric oxide and SOx emissions; it regulates over 330 of the largest polluters in the South Coast Air Basin. It covers industries as large and as diverse as refineries, power plants, aerospace, hotels, cement kilns, metal melting and down to small businesses like hotels and even amusement parks. When our program went into effect in 1994, it replaced over 32 command and control rules. It gives businesses the opportunity to select the lowest cost alternative to achieve their emission reductions. We're very pleased that the program is a success and has exceeded our expectations. In the first 3 years of the program, the actual emissions from the sources are a good one-third below their allocations. The cost in reducing those emissions is almost half of what had been anticipated under command and control regulations. We have a vigorous trading market, a market that has exceeded our expectations, with over $33 million in trades already having occurred to support plant modifications and business expansion. Reclaim works. It works in large part because it is dealing with fuel combustion sources. Industries under the program very carefully report the actual emissions from the facilities. I think this is important because careful monitoring and reporting makes the emission reduction credits a blue chip investment in the market. It also is germane as the Senate considers the new standards because as you look at what works, and you look at how it applies to large, medium and small-sized emissions fuel combustion sources, I think that ties directly back to the new standards before you. I've written a lot of very tough command and control rules in my career. I think for the sources that I've regulated, the trading programs really do offer a lower cost way to accomplish the objective. In many parts of the country, the new standards will require companies to meet emission limits currently in place in California. As we've looked at the new standards, we believe the driving force for additional reductions will not come so much from the ozone standards, but from the small particulate standards. We spent about 2 years and almost $1.5 million collecting small particulate data. It drives us to the conclusion that additional emission reductions will come primarily from fuel burning sources. We'll be looking for additional NAAQS reductions, probably up to about 35 percent more than what we've seen to date. We think our largest sources have really done their fair share and as we look to who needs to come up with additional emission reductions, we'll be talking in large part, first, about fuel burning sources subject to Federal regulations-- ships, trains, planes, interstate trucks, offroad construction and agricultural equipment. We'll also be talking about sources that are considered small and in many instances, have protected status currently under the Clean Air Act. Emissions from sources like refrigerators, stoves, small internal combustion engines sound small but they aren't when you're talking about a huge metropolitan area. Today, in the South Coast Basin, emissions from small internal combustion engines, less than 50 horse power, exceed the emissions of the largest power plant in the basin. A few conclusions quickly. South Coast Air District supports the new standards. We have but one request--additional time to accomplish the objective. Our deadline under the current standards is 2010. We believe additional years will be required to meet the new standards. Second, trading programs work. Trading programs will be an important component in achieving the new standards. For our program to have been adopted, we needed the political commitment to clean up dirty air, we needed a strong partnership with business and the environmental community to develop the regulations. For the new standards to work, the same will be true. Thank you, Mr. Chairman. Senator Inhofe. Thank you, Ms. Leyden. Ms. Hartsock. STATEMENT OF BEVERLY HARTSOCK, DEPUTY DIRECTOR, POLICY & REGULATORY DEVELOPMENT, TEXAS NATURAL RESOURCE CONSERVATION COMMISSION Ms. Hartsock. Thank you, Mr. Chairman. My name is Beverly Hartsock and I'm pleased to be here today representing the Texas Natural Resource Conservation Commission to address the issue of implementation of the proposed new air quality standards. From a State regulator standpoint, I think it's important to recognize that just adopting a new standard does not result in improved air quality. Programs must be developed to implement it and that is what my agency is expected to do. Implementation of any new air standard follows a series of steps. Monitoring data must be gathered to determine if an area meets the standard. For the new particulate matter standard, this will mean installing and operating new monitors. Even phasing these in over 3 years, as EPA has proposed, will cost Texas from $1.3 million next year up to almost $2 million in 2000. There will also be additional monitors needed for ozone and its precursors since we are likely to have new nonattainment areas and there is a need to know more about transport levels in rural areas. Next, we must inventory the sources of emissions in each of these areas. New nonattainment area inventories will require us to examine industrial and business process information and estimate all population-based activities. Analysis of emissions and air quality data must then be performed using computer model simulations. This is a major undertaking as can be seen by the 2-year effort and millions of dollars that have recently been spent in the OTAG process, studying four high ozone episodes in the Midwest, Northeast, and Atlanta. The computer analysis will yield an estimate of the level of emission reduction predicted to solve the problem. This reduction occurs through implementation of new rules or program requirements developed by State and local agencies based upon available technology, cost effectiveness, and feasibility. Traditionally, large industrial sources have been the focus of these controls, but more and more, we're having to focus on smaller, individual contributors such as small businesses and cars since collectively these are significant emissions sources. Final decisions on new controls occur through a public participation process of meetings and hearings. The results, along with all the supporting analyses, are compiled as a State implementation plan which is submitted to EPA. Reductions actually occur as sources come into compliance with the new requirements from one to many years later depending upon the type of program. States must continue to monitor air quality to measure actual improvement compared to the modeled predicted benefits. Additional controls must be implemented if air quality goals aren't meant. In my written comments, I provided a more thorough discussion of the air quality planning process, the difficulties we have encountered, and the problems we see with implementing proposed new standards. In summary, there are five points I would like to leave with you. First, my agency and the leadership of our State are on record as supporting the retention of both the existing ozone and particulate matter standards until the science to support any change is more definitive. The recently released studies of health effects of ozone estimate fewer benefits from the proposed standard than previously thought. The particulate matter studies have raised as many questions as they have provided answers. Second, if new standards are adopted, extensive new work will be needed to implement them and it appears likely that there will be little additional funding from EPA. States do not need another unfunded mandate. Additional requirements without adequate funding will take away from our ongoing effort to solve the more serious air pollution problems that have already been identified. Third, we should explore ways for air pollution planning to be a part of a city's urban planning whether or not new standards are adopted that cause the city to be designated nonattainment. New approaches should build on voluntary action programs such as flexible attainment approaches and should provide incentives for early planning, expanded monitoring and early reductions. Fourth, adequate time should be provided to allow areas to plan, implement controls and measure the results of those controls. The 5-year timeframes of the Clean Air Act allow for planning and implementation, but fail to allow time to monitor results or to build adequate data bases. Our experience shows that 10 years is a more reasonable planning cycle and the more difficult air pollution problem areas will take two or more planning cycles. Mid course corrections should be included so that new information can be used to improve imprecise predictions of growth and emissions changes. Finally, adequate time must be provided to allow major emission reducing trends such as those happening in the transportation sector to be significant contributors to attaining national air quality goals. In order for the country to be able to afford all that is likely to be required to meet all of our goals, we must allow time for market forces and technological development to minimize costs of accomplishing the reductions and spread those costs over time. Thank you for the opportunity to present these comments. Senator Inhofe. Thank you, Ms. Hartsock. We'll start with Dr. Krupnick since he's been around the longest. I notice and a lot of the people have testified on the previous panel and also on this panel, and others may have a comment about this too, you had mentioned the implementation, you identify areas of the Clean Air Act that need to be invalidated and you provided a laundry list. To do that, I think we pretty much would conclude we would have to have a full scale rewriting of the Clean Air Act. Do you agree or disagree with that? Dr. Krupnick. I'm not a lawyer, so I can't make that judgment. It just seems to me that there are certain aspects of this new world that we're looking at that are really up to Congress to address. I think if Congress does not act, it's my estimation that EPA is willing to push that Act as far as they can push it to try to move toward cost-effective implementation policies, but you could help that process along a lot and save the country a lot of money by maybe some surgical strikes into the Act. Senator Inhofe. I guess what I'm getting to is every time this comes up, I've asked myself the question, is it all that bad. There are some very positive things that could come out of a rewriting such as cost-benefit analysis and some things I feel would be a very helpful part of it. Ms. Hartsock, I was listening to you and you covered pretty much the cost but let's go back and kind of put this in a timeframe. First of all, in Texas, I assume you don't have 2.5 monitors in place? Ms. Hartsock. No. We haven't had any in place. In the month of March, we just put the first six out. Senator Inhofe. When could you start deploying? You've already started deploying the monitoring network, is that right? Ms. Hartsock. Yes, sir, but that is only in one city, Houston, and we have several other major metropolitan areas where we need to get out monitoring. That's to be started over the next year. Senator Inhofe. Let's assume that is right, then if the EPA is proposing the standard as a 3-year average, what year would you have that data? Ms. Hartsock. It would be 3 years from the time we started. Our phase-in program is over 3 years, so the first areas, such as Houston, we would have 3 years of data 3 years from now. The last of the areas would be 6 years from now. Senator Inhofe. So say by 1999, you'd have a lot of them out. In 3 years, it would be 2002. After you get the data, what steps are necessary to designate the nonattainment areas and how long would that take? Ms. Hartsock. There is a formal process, but in essence, I believe it's within a year that we have to have the designations in and then EPA has another year. Senator Inhofe. Then you have 3 years after that for your State implementation plan, so that would put us around 2006? Ms. Hartsock. Yes, sir, from that last date that you had. Senator Inhofe. All right. When would you have attained the standard, would it be 5 years after the designation which would bring us to about 2008? Ms. Hartsock. By that time, I think we're looking at having the initial round of controls in place, but as I indicated in my comments, one of the things you have to do then is monitor what the air quality looks like after those controls are in place. Senator Inhofe. And I understand they allow one extension of say up to 5 years. So we're talking about then perhaps the year 2013? Ms. Hartsock. Yes, sir. Senator Inhofe. Every time I look at this, it seems to me it makes sense to just go ahead and conduct the scientific tests first and then collect the data before we set the standard. Someone mentioned the other day it's kind of like instead of ready, aim, fire, it's ready, fire, aim. Do you agree with that analogy? Ms. Hartsock. Yes, sir. Senator Inhofe. You mentioned unfunded mandates and this is something I'm very sensitive to being a former mayor of a major city for three terms. Our major problem wasn't crime in the street, it was unfunded mandates, but we passed a law that was supposed to protect political subdivisions. You are a political subdivision, you're the State of Texas. Do you consider this an unfunded mandate? Ms. Hartsock. Yes. We do not see that additional funding is going to be made available by EPA to handle the new costs that we'll be incurring. Senator Inhofe. Mr. Cooper, Senator Sessions was here earlier for the previous panel. We're all supposed to be going over there for an executive session, so we're going to be hoping to get through in a timely fashion, but he was concerned also. He looked at that map and that is something that would concern someone who is from Alabama. In your testimony, you state your industry disagrees with the emissions estimates of the agency and it's miscalculated for printers and your industry. You also mentioned how the reductions are generally targeted across the board. Do you have any estimates or has the EPA estimated the burden on your industry for implementation purposes? Mr. Cooper. There are some estimates on the emissions and I think in fairness to EPA, I think you'd be able to agree these estimates are the best they have to work with. We don't have the estimates of emissions in our industry and part of the problem is, the science of air emissions on an individual site, an individual company, talking about monitoring data, is basically how you calculate what goes on in a certain kind of operation. It is not an agreed to formula. So any kind of estimation of emissions is guess work. Senator Inhofe. You mentioned in your testimony that you're on the advisory board, right? Mr. Cooper. Yes, I am. Senator Inhofe. And you have recommended changes. Is this one of the changes that you might be referring to? Mr. Cooper. Yes. As Ms. Nichols mentioned, we now have a larger group of small business folks on there. We are now meeting as a separate group to come up with these recommendations as a larger group of small businesses and how EPA can make some adjustments in these calculations. Senator Inhofe. Mr. Kerkhoven, I'm also concerned about the transportation end and we're going to be considering ISTEA, the Intermodal Transportation reauthorization and what does this map do to you when you look at this? Initially, correct me if I'm wrong, you were making your estimates on those areas that would be the smaller, dark green dots in the middle before we produced this map that shows two more concentric circles? Mr. Kerkhoven. Correct. Senator, actually the NHS bill addresses part of the conformity determinations, where conformity determinations may be made in the nonattainment areas and if we're going to expand conformity determinations to areas of violation or areas of influence, it's going to make it very, very difficult for localities. Senator Inhofe. It is my understanding, is it your understanding also, that these areas outside of the dark green specified area would not qualify for CMAQ funding? Mr. Kerkhoven. Correct. Senator Inhofe. Senator Baucus. Senator Baucus. Thank you, Mr. Chairman. I'll start with you, Ms. Nichols. What is EPA doing about ozone transport either currently and/or under the new proposed regulations? Ms. Nichols. Senator Baucus, the issue of transport has been around for many, many years and Congress actually gave EPA some authority directly to take action to make sure that States don't interfere with attainment or maintenance of areas downwind. The problem historically has been to get the data and to get action taken can be a very lengthy, time-consuming process. In the 1990 amendments, Congress actually created an Ozone Transport Commission to cover the 13 New England, northeastern States as far south as Virginia and including the District of Columbia in recognition that we now know enough about how the air moves around that region so that it was important that region get together and plan and take some action as a group in order to achieve the most cost effective reductions and to enable some of the areas to be able to attain the standards. As a result of the 1990 amendments and the need for attainment plans, EPA convened a much larger group of States beyond the ozone transport regions covering the entire area east of the Mississippi where we had evidence there was some degree of transport and interference. The States themselves took on the task through the environmental commissioners of the States to begin a planning process, to do a great deal of modeling and analysis to try to get a better handle on this issue. We are expecting in June of this year that we will receive recommendations from the Ozone Transport Assessment Group as to which States they feel need to take action in order to solve this transport issue for ozone. That's all under the current ozone standard. In looking at this map here which somewhat out of context looks like an amoeba, it reflects the kind of conversations that some of the experts in the Advisory Committee have been having about how to deal with this issue, that there is transport, that States have the primary responsibility but that there are some kinds of cost-effective measures, as Dr. Krupnick mentioned, particularly cap and trade programs that can be implemented on a broader level if the States agree to do it. There may be, indeed, a necessity on the part of some States to be doing some kinds of controls to help out their downwind neighbors if they really are making a substantial contribution. So these kinds of lines are designed to help people think about where you would want to have regional partnerships and the States getting together to at least try to plan together and possibly agree on some control strategies. There is no consensus, at this point, on any of this stuff but there is particularly no consensus on what the area of influence might have to do. It would be up to the States that we're in an area of influence if one of them gets established to decide for themselves what the measures would be. Certainly an area of influence is not the same thing as a nonattainment area. A nonattainment area is an area where you actually have violations of the standard, so some of the concerns that Mr. Kerkhoven mentions I think are frankly off the mark. Senator Baucus. What you're saying though is that there's room under the proposed standards, to cap or trade or work out various arrangements to deal with transport? Ms. Nichols. Yes. Senator Baucus. You still think that is possible? Ms. Nichols. I think it's possible. It's difficult. Senator Baucus. And probably even necessary? Ms. Nichols. But it will be necessary if the transport issue is going to be solved, yes, sir. Senator Baucus. A general question I had for anybody who has problems with these regulations or proposed regulations, first of all, PM<INF>10</INF>, it's my understanding that CASAC, the independent scientific peer review committee decided overwhelmingly that a new standard should be set. It didn't say what the standard should be, but did say a standard should be set. I think the vote was 19-2. I wonder if anyone has any problems with that or disagrees with that conclusion of CASAC and why? [No response.] Senator Baucus. So everyone agrees a new standard should be set? Ms. Hartsock. I don't know that I can speak for the others. I wouldn't indicate that I'm an expert on the standard in any way. The primary focus of the comments we had would be if there is going to be a new standard, what would be the steps necessary in implementation and what do we see as the problems there. I don't know that I'm really prepared to answer that. Senator Baucus. CASAC did say, especially with respect to PM<INF>2.5</INF>, that a standard should be set. I think there are 15,000 premature deaths annually as a consequence of occurrence of particulates and that was the reason that the CASAC Commission decided that a new PM<INF>2.5</INF> standard should be set. It did not address the question of what the standard should be, but based upon that amount of premature deaths annually, it reached that conclusion. The vote was 19-2 as I recall. Ms. Leyden, you've heard some complaints about this and yet you say you favor the proposed regulations. Ms. Leyden. Yes. Senator Baucus. What would you say in answer to some of the other witnesses that had some problems with these proposed regulations? Ms. Leyden. Well, I guess from my vantage point, I've spent almost the last decade looking at how to reduce pollution and tailoring regulations to assess things like cost effectiveness, looking at what new technology can do. We've made phenomenal progress in the South Coast Air Basin and I see no reason at all not to first protect the public health and provide adequate time to get there. I really believe for us, as I said in my comments, it will be additional NAAQS reductions, that will be needed to hit the 2.5 standard. It's the right thing to do and we can get those additional NAAQS reductions by focusing on sources that have yet to reduce their emissions to the same level as some of our largest industries have reduced them. Senator Baucus. Mr. Chairman, if I might have one more question? Senator Inhofe. Sure. Senator Baucus. The vast amount of research on the question of whether the Clean Air Act benefits outweigh costs is overwhelmingly conclusive. That is in the affirmative by a factor of many times. All the studies on the Clean Air Act generally have reached the conclusion by a huge factor that the benefits of the Clean Air Act outweigh the cost of the Clean Air Act. Yet, we also run into the problem of the tyranny of the majority, the tyranny of averages because some provisions of the Act may have disproportionate effects on some people or individuals compared to some others. I think most of us are concerned about small business, that the cost on a particular small business person might be disproportionately greater than on a large enterprise. Ms. Nichols, we heard Mr. Cooper say that perhaps the EPA could do a better job in implementing section 507 of the Clean Air Act, particularly with respect to small business. I think all of us in Congress are very sensitive to the unique characteristic of small business. So on the aggregate, benefits vastly exceed the costs, we don't know if that is the case with respect to the new regulations, but we do know that is the case generally with the Act. What are you doing at EPA to address the concerns of the small businessmen? Ms. Nichols. Senator, we have a number of measures underway to do a better job of listening to and working with small business. I think in our programs implementing Title III of the Clean Air Act, the Toxics Program, we've had some of our best successes sitting down industry by industry as a group developing the data base jointly and coming up with regulations that can be met even when a particular sector is characterized by a great number of small businesses. I would have to say as a resident of the South Coast Air Basin in my past and somebody who worked with Ms. Leyden and others on some of these programs, we have learned from the experience of the South Coast which has had to go further in terms of regulating small businesses because the problems were more severe and have found that in many situations, we were not doing as good a job as we should have of outreach. Particularly on the enforcement side, some of the mechanisms that were being used to communicate and enforce against small businesses just weren't effective, that you needed to find ways to get the industry to help us to communicate what requirements were going to be. One of my favorite examples is one where we worked with a particular industry to develop a standard and then helped them to develop a workbook that could be distributed to all of their individual members. It's kind of like a desk reference manual so that the person who is actually running one of these particular facilities can look up what the requirements are in plain English and not have to hire an engineer or a specific environmental person in order to help them run their business. Those are the kind of practical realities that you have to deal with when you're actually working with small companies and try- ing to get compliance and recognizing that they want to comply but oftentimes an assistance approach is what is needed. EPA has funded the development of a number of small business compliance assistance centers for that reason. The Clean Air Act really led the way in that regard because of 507. We've worked with the State small business ombudspeople that were required to be created to help make them be more effective in carrying out these responsibilities. There is no doubt we could do better at this and I think Mr. Cooper and others have given us some ideas as we move forward with this implementation committee as to how to bring in the small business community and really address their concerns earlier in the process. Senator Baucus. Mr. Chairman, if you don't mind, if I might ask Mr. Cooper what more can be done to help address small business concerns? Mr. Cooper. I can't tell you how happy I am you asked that question. Let me tell you the core of the problem and maybe some in the small business community would not appreciate my saying this but by and large, small business people are fairly limited in their options of what they can do. The thing I hear more than anything is just tell us what we have to do and we'll do it. What that cries out for is very good guidance that isn't left subject to an engineer in Cleveland may be different engineer in Louisville, so you have guidance that is fairly clear-cut. Then you have to have the people available to answer the phone because there's a lot of fear out there. That's what the ombudsman program has provided. The core of the problem with the ombudsman program is that it is funded out of permit fees and when you get down to the State level, Texas has one of the strongest ombudsman programs in the country and I think their funding is over $1 million for that program which is about 10 times what it is in most States. If you're in a State and you're competing for dollars with the enforcement people and you're in technical assistance, you're going to lose. So what I would love to see is this committee to go over to the Appropriations Committee and set aside some funds to bolster the 507 Program. Without it, that program will die. There are a number of States that have cut back their programs already. I am very concerned that when this new standard comes out, if these programs aren't in place, that's when the realities are going to hit and it is going to be a mess. Senator Baucus. Thank you very much, Mr. Chairman, for your indulgence. Senator Inhofe. Thank you, Senator Baucus. Let me clarify one thing. You weren't here during the first panel and this whole idea on the 15,000 premature deaths is assuming causation. It's my understanding from the testimony of many of them that science has not been prepared to assume causation in that case in terms of the 15,000 premature deaths. Senator Baucus. I don't know the number but I do know the overwhelming conclusion of CASAC is based upon the data and the number of deaths and they reached a conclusion 19-2 that a standard should be set. Senator Inhofe. Then I have two more questions. I didn't quite use all my time and this is going to be very, very difficult for you, Ms. Nichols, because I'm going to ask you a question and I want one word for the answer and that answer would either be yes or no. Senator Baucus talks about the fact that the benefits have outweighed the costs. I believe he was referring to the previous standards. Under the proposed standards, I understand there is a regulatory impact analysis that came to the conclusion that the costs outweighed the benefits for ozone. Is that correct? Ms. Nichols. No. Senator Inhofe. OK. I will produce that report and we'll take that up at our next meeting. One last question for Ms. Leyden. In your written testimony, although you didn't say it in your verbal testimony, you talked about additional reductions were needed to come from diesel sources such as planes, interstate trucks, agricultural equipment and so forth. For the purposes of classification, do you classify jet fuel as diesel? Ms. Leyden. Yes, I would consider that a heavier fuel. It would be in that same category. Senator Inhofe. That classification has been used by the EPA? Ms. Leyden. My focus is on the heavier fuel type, sir. Senator Inhofe. You had said you're getting cooperation from some of the large contributors and I'm glad to hear that. You said in addition, small internal combustion engines together emit more than the largest power plant in your area. Can you give me a couple of examples of small combustion engines? Ms. Leyden. Small combustion engines would be anything less than 50 horsepower. They are protected under the Federal Clean Air Act and have an emissions standard that represents technology that today is 10 years old. Senator Inhofe. Would that be either two cycle or four cycle? Ms. Leyden. They'd be two cycle. We estimate, based on sales of equipment and fuel consumption, that emissions from that source category represents about 17 tons a day of nitric oxide emissions going into our air. That is almost four times greater than the emissions from the largest power plant in the basin. Senator Inhofe. I'm going to end with a request, Ms. Nichols. On this issue of jet fuel being considered for your purposes the same as diesel, I spent 40 years in that field and I think I'd like to have you at least look and reevaluate that because I think you'll find it is a much cleaner burning fuel and I was not aware that you threw all those in together. Maybe you don't, but if you could let me know on that, I'd appreciate it very much. Ms. Nichols. I'll be happy to find out. Senator Inhofe. Senator Baucus, do you have any last questions? Senator Baucus. No. Senator Inhofe. I appreciate the panel coming very much. We had said we were going to end right at 12 o'clock. We will have to do that because we're having an executive session over in the Capitol. Thank you very much for coming and for the time you've taken to come here and testify. [Whereupon, at 12:05 p.m., the subcommittee was adjourned, to reconvene at the call of the chair.] Prepared Statement of Kenneth W. Chilton, Director, Center for the Study of American Business, Washington University I wish to thank the Senate Subcommittee on Clean Air and Wetlands for the opportunity to testify on the proposed national ambient air quality standards for ozone and particulate matter. I have researched clean air issues for over a decade and a half. I am the director of the Center for the Study of American Business, a 501(c)(3) non-partisan, not-for-profit public policy research organization at Washington University in St. Louis. These are my personal comments and do not necessarily reflect the views of the Center for the Study of American Business or Washington University. I would like to address several of the most important public health questions in the NAAQS debate. I will also speak about some very basic issues regarding the primary objective of the Clean Air Act. the science on ozone The scientific evidence on the health effects of ozone is rather extensive. Ozone has been demonstrated to cause undesirable physical effects in some individuals. The effects include coughing, wheezing, tightness in the chest and reduced lung function--less volume of air exchanged with each breath. Based on EPA's estimate of the relationship between changes in forced expiratory volume (FEV) and various combinations of exercise levels and ozone concentrations, typical subjects experience less than a 5 percent loss in lung function even at the highest ozone levels recorded in the United States in 1996 (about twice the current standard).\1\ (See Figure 1.) Medical experts do not consider lung function decrements of 10 percent, or less, an adverse health effect. The primary concern, however, is for ozone's effects on asthmatics or others especially sensitive to a combination of high ozone levels and moderate to heavy exercise. --------------------------------------------------------------------------- \a}\Lung function is measured as the volume of air a subject can force from his/her lungs in 1 second. Source: Review of the National Air Quality Standard for Ozone Assessment of Scientific and Technical Information (Washington, DC.: U.S. EPA, Office of Air Quality Planning and Standards, June 1996), p. 31. [GRAPHIC] [TIFF OMITTED] T6586.001 No one should minimize the trauma that a severe attack of asthma causes the asthmatic or his or her loved ones. The EPA staff report, however, estimates that for each one million persons exposed, we can expect just one to three more summertime respiratory hospital admissions a day for each 100 parts per billion increase in ozone levels.\2\ This is a very low incidence rate and a very high elevation in ozone levels. In a city of one million people, one to three added respiratory hospital admissions would be virtually undetectable. Such days would also be very rare even in cities with persistent ozone air quality problems. EPA has recently modified its risk assessments for ozone, resulting in less public health benefits expected from the proposed NAAQS. For example, the new risk assessment projects that attainment of the proposed standard would lower New York City asthmatic hospital admissions caused by ozone to 109 per year, from 139 under the current standard.\3\ That is a reduction of 30 hospital admissions, or one tenth of 1 percent of the 28,000 yearly asthmatic admissions. The previous estimate, contained in the Staff Paper, was that the standard would reduce yearly admissions by about 90.\4\ The revised risk assessments, which were conducted for nine urban areas, lower the expected benefit of the proposed standard in terms of other health effects, as well, especially for children playing out of doors. For example, EPA had previously expected 600,000 fewer occurrences of decreased lung function (instances where the amount of air that can be rapidly exhaled in 1 second decline by more than 15 percent) in children, but now projects just 282,000 such incidences. Anticipated improvements in episodes of moderate to severe chest pain in children were revised downward from 101,000 to 53,000, and the estimate for prevented cases of moderate to severe cough in children was lowered from 31,000 to 10,000.\5\ EPA's NAAQS proposal is based on the previous risk assessments. Because the revisions are large (reducing the expected benefit by half or more for several health effects), the wisdom of the proposed tighter standard is further called into question. It is important to point out that, thus far, ozone has not been shown to cause premature mortality. The upper bound benefit estimate of $1.5 billion in EPA's Regulatory Impact Analysis of ozone, however, results almost entirely from the assumption that the proposed standard would save lives. This claim is unsubstantiated. I also would like to note that a separate secondary standard to protect plants and buildings hardly seems justified. First, ozone concentration data for rural areas is very limited. Second, incremental cost and benefit estimates for meeting the proposed SUM06 secondary standard versus meeting the current 0.12 ppm goal have not been included in the agency's Regulatory Impact Analysis. Surely, we do not need to focus substantial financial and human resources preparing implementation plans to protect primarily commercial crops with no idea whether the hypothetical benefits outweigh the costs. the science on fine particulates Unlike the science on ozone's health effects, the science for fine particulates is not very developed and, thus, is plagued with uncertainties. EPA makes the claim that full attainment of the new fine particulate standard would result in between $69 billion and $144 billion worth of health benefits.\6\ These predictions of extraordinary health benefits derive from estimates of reduced mortality from meeting a new fine particle standard. Whether the expected number of lives prolonged is 20,000, as stated by Administrator Browner when she testified before this subcommittee in February, or 15,000 as most recently predicted, or zero is hard to say given the paucity of scientific data supporting these projections. The mortality improvements expected from reduced levels of fine particles are based not on thousands or even hundreds of studies, as the agency casually infers, but, in essence, from just two studies. These studies purport to show an association between PM<INF>2.5</INF> levels and death due to cardiovascular and pulmonary causes together and also a link between PM<INF>2.5</INF> and death.\7\ It is curious, to say the least, that the statistical link that has been demonstrated is between fine particles and cardiopulmonary deaths, and not deaths due to respiratory disease or lung cancer alone.\8\ Perhaps it shouldn't be totally surprising that a fine particle- mortality link has not been demonstrated where one might expect, because medical science has not yet discovered a biologically plausible mechanism to explain how fine particulates cause any deaths. Without knowing more about the mechanism through which particulates might affect human health, the observed association between premature mortality and fine particles cannot be considered tantamount to a cause-and-effect relationship. An additional scientific uncertainty with regard to these studies results from the problem of confounding. Confounding is a situation in which an observed association between an exposure and a health effect is influenced by other variables that also are associated with the exposure and affect the onset of the health effect. A variety of factors such as temperature, humidity, or the existence of other air pollutants may cause mortality rates to rise and fall with, and thus appear to be caused by, fine particulate concentrations.\9\ Also, before regulating air pollutants simply on a basis of size, more research is needed to try to identify which components, if any, of fine particulate matter are producing the observed association-- ultrafine particles, nitrates, sulfates, metals, volatile (or ``transient'') particles, and so forth. We know very little about transient particles, which form and disappear quickly, and, therefore, go undetected by filter monitors. Lack of air quality data for PM<INF>2.5</INF> is another serious problem. EPA Administrator Browner testified that there are 51 PM<INF>2.5</INF> monitors collecting air quality data at present.\10\ The inference was that this is a large number; it is not. For example, in 1995 there were 972 monitors measuring ozone levels and 1,737 that collected data on PM<INF>10</INF>.\11\ For EPA to derive mortality estimates, PM<INF>2.5</INF> concentrations had to be projected for many cities where monitoring data do not exist. Administrator Browner says the scientific evidence establishing the need for a fine-particle standard is ``compelling.'' I respectfully disagree. A convincing case for a new fine-particle standard has not been made. Epidemiological evidence is scant and indicates an association, not a cause-and-effect relationship. A toxicological explanation for the observed mortality and fine particle link has not been established. Exposure data are lacking due to the small number of monitors and this lack of data raises questions about the epidemiological studies. Setting a separate PM<INF>2.5</INF> standard at this time could be another case of ``ready, fire, aim,'' as former EPA Administrator William Reilly once described past quick responses to perceived environmental problems. Let me shift gears and raise a more fundamental issue that thus far has been missing in the debate over the proposed ozone and particulate air quality standards. The Clean Air Scientific Advisory Committee hinted at this problem but perhaps its language was a bit too obtuse. the clean air act's flawed goal As the members of this subcommittee are well aware, the Clean Air Act calls on the Environmental Protection Agency to establish and enforce air quality standards that protect public health with an adequate margin of safety. It proscribes the consideration of economic factors in this process. Economics may come into play only at the implementation phase. This is a very high-minded objective. Who but a Philistine could disagree with it? Well, nearly any economist might. In a world of scarce resources (the real world), people have to be concerned about balancing incremental benefits with incremental costs. Spending more on one activity than it brings about in added benefits means that resources aren't available to spend on other desirable activities that could produce more benefits than their costs. Theoretically, it might still be possible to protect public health with an adequate margin of safety and spend resources wisely, provided that the health-based standard can be set at a level where added health benefits equal or exceed added costs. Unfortunately, two factors are conspiring against this happy state. First of all, all health effects from air pollution can't be eliminated, at least not for ozone. Physical responses to ozone can be demonstrated at background levels--levels produced by natural processes. This is what the Clean Air Scientific Advisory Committee (CASAC) was trying to get across in its closure letter to Administrator Browner when it wrote: The Panel felt that the weight of the health effects evidence indicates that there is no threshold concentration for the onset of biological responses due to exposure to ozone above background concentrations. Based on information now available, it appears that ozone may elicit a continuum of biological responses down to background concentrations. This means that the paradigm of selecting a standard at the lowest-observable- effects-level and then providing an ``adequate margin of safety'' is no longer possible.\12\ In plain English, the prime directive of the Clean Air Act is ``mission impossible,'' at least for ozone. Taken literally, the standard would have to be set at a level produced by natural emissions of ozone precursors. The cost of such an effort is incalculable and the goal unattainable. Second, the point where incremental costs equal benefits was crossed with respect to ozone with the passage of the 1990 Clean Air Act Amendments. The standard we are currently trying to meet is costing between $4 and $28 to produce $1 worth of benefits.\13\ A more restrictive standard, such as the one proposed, has to be an even worse tradeoff. Cost estimates from private economists and at the Council of Economic Advisers confirm this expectation. The Agency has presented some very modest figures for both benefits and costs in its Regulatory Impact Analysis (RIA). While the ozone standard being proposed was not specifically addressed in the RIA, its benefits should be bounded between $0 and $1.5 billion and its costs between $600 million and $2.5 billion, according to the impact analysis.\14\ This figure most likely represents only a small fraction of the real cost of full attainment, for a variety of reasons. For example, full costs of attainment were calculated for only one to three cities. Other estimates of costs and benefits are quite different, particularly on the cost side. Economist Susan Dudley predicts that full attainment of the current ozone standard will cost between $22 billion and $53 billion a year. The proposed standard would add an additional $54 billion to $328 billion to the price tag, according to Dr. Dudley.\15\ Council of Economic Advisers member Alicia Munnell has projected added costs for meeting the new ozone standard of $60 billion a year.\16\ EPA's Regulatory Impact Analysis for the fine particulate standard estimates an annual cost of $6 billion for partial attainment. Like EPA's cost estimate for the ozone standard, this figure is most likely far too low.\17\ EPA truncates costs at $1 billion per microgram (<greek-m>g) of fine particle reduction, although most areas would incur costs to lower particulates that are much higher than this cutoff figure. A sensitivity analysis performed for two cities, Denver and Philadelphia, demonstrates how quickly marginal cost rises above EPA's $1 billion/<greek-m>g cutoff. In Philadelphia, the $1 billion/<greek-m>g cutoff would result in a 20 percent reduction in PM<INF>2.5</INF> concentration from the 2007 baseline. An additional 1 percent reduction would result from a $2 billion/<greek-m>g cutoff, but the cost would double. The RIA reports similar results for Denver.\18\ recommendations EPA is not required to tighten the ozone standard or to create a new PM<INF>2.5</INF> NAAQS. In the case of ozone, there is little evidence that a tighter standard will be more protective of those who are considered the sensitive population. For particulates, the science is not adequate to warrant a new PM<INF>2.5</INF> standard. Certainly, CASAC members were of quite divergent opinions on how to set a PM<INF>2.5</INF> standard. In her testimony, Administrator Browner made much ado about the fact that there was a consensus among CASAC members that a new PM<INF>2.5</INF> NAAQS be established. It is also true, however, that there was ``no consensus on the level, averaging time, or form'' of the standard.\19\ Indeed, on February 5, the chair of CASAC shared with this subcommittee just how tepid the support for the proposed fine particle standard was. Only two members of the 21-member CASAC endorsed a range for an annual PM<INF>2.5</INF> standard as strict as 15 <greek-m>g/m<SUP>3</SUP> to 20 <greek-m>g/m<SUP>3</SUP>, yet EPA has proposed an annual limit of 15 <greek-m>g/m<SUP>3</SUP>. Eight of the members did not support any annual PM<INF>2.5</INF> standard.\20\ (See Table 1.) Given the rather poor state of atmospheric and medical scientific knowledge of fine particles, it is difficult to see how setting a standard at this time will produce meaningful health benefits. Rather than press forward with a tighter air quality standard for ozone and a new standard for fine particles, EPA should appeal to Congress and The White House to revisit the Clean Air Act. Two basic reforms are required. First the fundamental objective of the Act needs to be changed from ``protecting the public health with an adequate margin of safety'' to ``protecting the public against unreasonable risk of important adverse health effects.'' Second, benefit-cost analyses should be required, not proscribed, when setting air quality standards. The American people expect their elected officials to protect them from air pollution that might significantly impair their health. They do not expect, however, that the costs of this protection will be so out of proportion to benefits that other desirable outcomes are forgone because economic resources have been applied too generously to this task. Table 1.--Summary of CASAC Panel Members Recommendations for an Annual PM<INF>2.5 Standard (all units <greek-m>g/m<SUP>3) ------------------------------------------------------------------------ Name Discipline PM<INF>2.5 Annual ------------------------------------------------------------------------ Ayres.......................... M.D................ yes<SUP>2 Hopke.......................... Atmospheric 20-30 Scientist. Jacobson....................... Plant Biologist.... yes<SUP>2 Koutrakis...................... Atmospheric yes<SUP>2,3,4 Scientist. Larntz......................... Statistician....... 25-30<SUP>5 Legge.......................... Plant Biologist.... no Lippmann....................... Health Expert...... 15-20 Mauderly....................... Toxicologist....... 20 McClellan...................... Toxicologist....... no<SUP>6 Menzel......................... Toxicologist....... no Middleton...................... Atmostpheric yes<SUP>2,3 Scientist. Pierson........................ Atmospheric yes<SUP>2,7 Scientist. Price.......................... Atmospheric yes<SUP>8 Scientist/State Official. Shy............................ Epidemiologist..... 15-20 Samet<SUP>1......................... Epidemiologist..... no Seigneur....................... Atmospheric no Scientist. Speizer<SUP>1....................... Epidemiologist..... no Stolwijk....................... Epidemiologist..... 25-30<SUP>5 Utell.......................... M.D................ no White.......................... Atmospheric 20 Scientist. Wolff.......................... Atmospheric no Scientist. EPA Staff...................... ................... 12.5-20 ------------------------------------------------------------------------ Notes: <SUP>1 Not present at meeting; recommendations based on written comments <SUP>2 Declined to select a value or range <SUP>3 Concerned upper range is too low based on national PM<INF>2.5/PM<INF>10 ratio <SUP>4 Leans toward high end of staff recommended range <SUP>5 Desires equivalent stringency as present PM<INF>10 standards <SUP>6 If EPA decides a PM<INF>2.5 NAAQS is required, the 24-hour and annual standards should be 75 and 25 <greek-m>g/m<SUP>3, respectively with a robust form <SUP>7 Yes, but decision not based on epidemiological studies <SUP>8 Low end of EPA's proposed range is inappropriate; desires levels selected to include areas for which there is broad public and technical agreement that they have PM<INF>2.5 pollution problems Source: CASAC Closure Letter on the Staff Paper for Particulate Matter, June 13, 1996, docketed as EPA-SAB-CASAC-LTR-96-008, Table 1. notes 1. Review of National Ambient Air Quality Standards for Ozone Assessment of Scientific and Technical Information OAQPS Staff Paper (Research Triangle Park, N.C.: U.S. EPA Office of Air Quality Planning and Standards, June 1996), p. 31. 2. Ibid., p. 40. 3. R.G. Whitfield, A Probabilistic Assessment of Health Risks Associated with Short-Term Exposure to Tropospheric Ozone: A Supplement (Argonne, Illinois: Argonne National Laboratory, contracted for U.S. Environmental Protection Agency, January 1997), Table 6. 4. Ozone Staff Paper, p. 130. 5. Memorandum, ``Supplemental Ozone Exposure and Health Risk Analyses,'' Harvey M. Richmond, EPA Risk and Exposure Assessment Group, to Karen Martin, EPA Health Effects and Standards Group, February 11, 1997. 6. Draft Document Regulatory Impact Analysis for Proposed Particulate Matter National Ambient Air Quality Standard (Research Triangle Park, N.C.: U.S. EPA Office of Air Quality Planning and Standards, December 1996), p. ES-20. 7. Douglas Dockery, C. Arden Pope III, Xiping Xu, John D. Spengler, James H. Ware, Martha E. Fay, Benjamin G. Ferris, Jr., Frank E. Speizer, ``An Association Between Air Pollution and Mortality in Six U.S. Cities,'' New England Journal of Medicine, vol. 329, no. 24, December 9, 1993, pp. 1753-1759; C. Arden Pope III, Michael J. Thun, Mohan M. Namboodiri, Douglas W. Dockery, John S. Evans, Frank E. Speizer, Clark W. Heath, Jr., ``Particulate Air Pollution as a Predictor of Mortality in a Prospective Study of U.S. Adults,'' American Journal of Respiratory Critical Care Medicine, vol. 151, 1995, pp. 669-674. Technically, while both Dockery et al. and Pope et al. show a link between increased mortality and fine particle concentrations, Pope et al. is the basis for EPA projections of lives prolonged by attaining the proposed PM<INF>2.5</INF> NAAQS. 8. William M. Landau, Gregory Evans, Raymond Slavin, letter to EPA Docket A-95-54, commenting on the proposed PM<INF>2.5</INF> NAAQS, March 7, 1997. 9. Suresh H. Moolgavkar and E. Georg Luebeck, ``A Critical Review of the Evidence on Particulate Air Pollution and Mortality,'' Epidemiology, v. 7, n. 4, July 1996, pp. 420-428. 10. Testimony of EPA Administrator Carol Browner before U.S. Senate Committee on Environment and Public Works, February 12, 1997. 11. National Air Quality and Emissions Trends Report, 1995 (Research Triangle Park, N.C.: U.S. EPA Office of Air Quality Planning and Standards, October 1996), p. 163. 12. Clean Air Scientific Advisory Committee closure letter to EPA Administrator Carol Browner on the primary standard portion of the OAQPS Staff Paper for ozone (November 31, 1995), p. 2. 13. Kenneth Chilton and Stephen Huebner, Has the Battle Against Urban Smog Become ``Mission Impossible?'' (St. Louis: Center for the Study of American Business, Policy Study 136, November 1996), p. 14. 14. Regulatory Impact Analysis for Proposed Ozone National Ambient Air Quality Standard (Research Triangle Park, N.C.: U.S. EPA Office of Air Quality Planning and Standards Innovative Strategies and Economics Group, December 1996), p. ES-22. 15. Susan E. Dudley, Comments on the U.S. Environmental Protection Agency's Proposed National Ambient Air Quality Standard for Ozone (prepared for the Regulatory Analysis Program, Center for the Study of Public Choice, George Mason University, March 12, 1997), p. ES-3. 16. Memorandum from Alicia Munnell, Council of Economic Advisers, to Art Fraas, Office of Management and Budget, December 13, 1996. 17. Thomas Hopkins, Can New Air Standards for Fine Particles Live Up to EPA Hopes? (St. Louis: Center for the Study of American Business, Policy Brief 180, April 1997), pp. 10-17. 18. Regulatory Impact Analysis, p. 7.6. 19. Clean Air Scientific Advisory Committee closure letter to EPA Administrator Carol Browner on the Staff Paper for Particulate Matter (June 13, 1996), p. 2. 20. Ibid., Table 1. ______ Testimony of Thomas B. Starr, Ph.D. and Principal, ENVIRON International Corporation Good morning. I very much appreciate the opportunity to testify before this Senate Subcommittee regarding the U.S. Environmental Protection Agency's (EPA) proposed new standards for particulate matter. My name is Thomas B. Starr. I am a Principal with ENVIRON International Corporation, a consulting firm headquartered in Arlington, Virginia, that specializes in health and environmental science issues related to chemical exposures, pharmaceuticals, medical devices, and food products, pesticides, and contaminants. My own consulting activities focus on the development and use of effective methods for incorporating scientific knowledge of toxic mechanisms into the quantitative risk assessment process. A brief biographical sketch is attached (Appendix A). The comments I offer today are drawn principally from two separate consulting projects in which we have performed a critical examination of the scientific evidence for potentially causal associations between particulate matter (PM) exposure and adverse human health effects. In the first project, undertaken on behalf of the American Petroleum Institute, three world-renowned epidemiologists, Drs. Raymond Greenberg, Provost and Vice-President for Academic Affairs, Medical University of South Carolina, Jack Mandel, Chairman, Department of Environmental and Occupational Health, School of Public Health, University of Minnesota, and Harris Pastides, Chairman, Department of Epidemiology and Biostatistics, from the School of Public Health at the University of Massachusetts, were brought together as an Expert Panel to independently and objectively assess the quality of the epidemiologic evidence for associations between PM exposure and increased human morbidity and mortality. In the second project, undertaken on behalf of Kennecott Corporation, an ENVIRON colleague, Dr. Larisa Rudenko, and I also evaluated the case for such causal associations, and, in addition, assessed the credibility of health benefits that EPA has projected would accrue from implementation of the proposed new PM standards. The final reports from these projects were submitted to EPA and are included along with my oral testimony for your information. My remarks today briefly summarize their findings; I refer you to the full reports for additional details. First, the issue of causality, or whether the effects observed are truly caused by the exposure to PM, specifically PM<INF>2.5</INF>, or some other component of air pollution or lifestyle. In assessing whether the results from epidemiologic studies support the existence of a causal relationship between exposure and disease, criteria developed initially by Bradford Hill (1965) are often applied. These include the strength, consistency, coherence, specificity, and temporality of the reported association. Although not explicitly stated, a presumption exists that the validity of the association has been established prior to consideration of these criteria. What this means is that the estimates of the association's strength have been shown to be free of significant biases and not significantly confounded. The Expert Panel of epidemiologists and our independent review both concluded that the studies of PM and disease do not satisfy these conditions; they have inadequately addressed potential biases and they have failed to resolve satisfactorily the issue of confounding. Even if the issue of validity were to be set aside, the Hill criteria would not be met. The reported associations are extremely weak and vacillate between positive and negative based on the specific regression model that has been used to characterize the dose-response relationship; as copollutants are introduced into the analyses, apparently positive associations attenuate in strength, often to non- significance. Indeed, based on the criterion of strength of association, it is difficult to imagine a weaker case for causality than that posed by the data on PM and mortality or morbidity. Furthermore, the results of the studies are not actually as consistent as they might at first appear. For example, different exposure measures (e.g., mean daily level, maximum daily level, or some lagged estimate) have been associated with different endpoints (e.g., respiratory diseases, cardiovascular diseases, or total deaths). Also, temporal relationships between exposure variables and disease occurrence are not the same across studies, with lag times varying from concurrent day to several days earlier. In addition, a critically important component of coherence, namely, dose-response, is, at best, weakly established in only a few studies. In virtually all of the epidemiologic studies of PM, exposure levels have not been not based on personal dosimetry, but rather on stationary samplers located in specific geographic areas. Individual subjects were thus assigned ``community-wide'' measures of exposure, rather than individual measures. The lack of personal exposure measures limits the ability to conclude that any individual death is linked to air pollution per se. In fact, there is a large body of data indicating that community sampler measurements rarely provide good estimates of individual exposures. Even if a causal association were in fact to exist between PM exposure and disease occurrence at the individual level, such ``ecological'' exposure estimates would likely misrepresent the association's true strength. Equally important, the shape of the underlying dose-response relationship would also likely be significantly distorted by ecologic analyses, with sharp threshold-like curves being smoothed into more nearly linear curves by exposure misclassification. Another major challenge to the case for causality relates to the nature of PM exposure, which invariably occurs in combination with exposure to other air pollutants such as ozone, carbon monoxide, SO<INF>2</INF>, H<INF>2</INF>SO<INF>4</INF>, metals, and volatile organics. Because this mixture's composition varies according to source, season, time of day, weather conditions, and geographic region, and because PM is itself a complex and highly variable mixture, it has been virtually impossible to disentangle the potential adverse health effects of PM, or a specific PM fraction, such as PM<INF>2.5</INF>, from those potentially attributable to other confounding copollutants. The question of whether the coarse and/or fine particulate components of air pollution are causally related to adverse human health effects is one of great importance. If there is a causal relationship, identification and establishment of a safe and acceptable level of ambient particulate matter will be a decision with enormous consequences. However, the severe methodological limitations of existing studies prevent a conclusive judgment about the causality of associations between PM exposure and adverse health effects at the present time. EPA's proposal for new PM standards is premature. There is an obvious need for new epidemiologic studies that collect data at the individual subject level. Carefully designed case-control studies can also be effective. It is especially important that future study designs be related to clearly articulated theories about the specific mechanistic pathways through which particulate air pollution may affect human health. To serve as a basis for regulatory decisionmaking, future epidemiologic studies will be most useful if they inform us about the specific manner in which individual air pollution constituents might affect human health. The current epidemiologic literature falls well short of this goal. The stated purpose for USEPA's proposed new PM standards is to: ``. . . provide increased protection against a wide range of PM-related health effects, including premature mortality and increased hospital admissions and emergency room visits (primarily in the elderly and individuals with cardiopulmonary disease); increased respiratory symptoms and disease (in children and individuals with cardiopulmonary disease such as asthma); decreased lung function (particularly in children and individuals with asthma); and alterations in lung tissue and structure and in respiratory tract defense mechanisms.'' (Fed Reg 61:65638) How confident can we be that the proposed new PM standards will in fact lead to increased human health protection? The quantitative risk assessment conducted for EPA by Abt Associates, Inc. attempts to quantify the uncertainty inherent in the estimated health benefits from the new standards. This assessment is very thorough in its identification of many weaknesses in the underlying PM and health effects data, remarkably frank about its necessary reliance on numerous unproven assumptions, and surprisingly even-handed in its demonstrations, via multiple sensitivity and uncertainty analyses, that the health benefits projected from the proposed standards might well be greatly exaggerated. Significant limitations of EPA's benefit projections either noted in the Abt Associates, Inc. risk assessment are in our critique of it and include the following: Because correlation is not causation, the projections have had to assume causation; thus, future reductions in specific PM levels need not necessarily result in any material health benefits. This has not been acknowledged explicitly. EPA's failure to account for the potential health effects due to simultaneous exposure to PM, other pollutants, and related weather variables almost certainly leads to substantial overstatements of both the strength and statistical significance of the apparent associations specifically with PM exposure. This issue of confounding has been explored only to a very limited extent, yet EPA has concluded that its benefit estimates are robust to the inclusion or exclusion of individual co-pollutants. This conclusion is at variance with the findings of several reanalyses that considered multiple confounding variables simultaneously. The discrepancy is almost certainly due to the fact that EPA's sensitivity analyses considered only ``one-at-a-time'' additions of individual co- pollutants instead of real-world multiple exposures. Thus, the true benefits that result from compliance with the proposed new PM standards may well be completely negligible. The benefit projections assume log-linear relationships between PM exposure above natural background levels and various adverse health outcomes. Because most days of the year have low to mid-range levels of PM, the estimated health benefit over an entire calendar year of daily PM exposures is dominated by the contribution from the many days with low to moderate levels of PM. This is precisely the exposure range for which the empirically determined log-linear dose-response relationships are most uncertain. The assumption of a log-linear no-threshold dose-response relationship is not presently scientifically justified; threshold-like alternatives cannot be ruled out. EPA's sensitivity analysis using different cut points (i.e., thresholds) demonstrates the enormous impact that thresholds can have on the projected benefits from proposed new standards. High thresholds imply negligible health benefits. Nevertheless, health benefits estimated with threshold-like dose-response relationships play only a secondary role in EPA's benefits assessment. They should instead be considered at least on an equal footing with the benefits estimated with log-linear models. EPA's regression models presume implicitly that the independent variables are known without error. Yet actual PM exposure levels are very poorly characterized and highly uncertain. EPA has acknowledged that little regional monitoring data, and virtually no personal exposure data, are available for PM<INF>2.5</INF> at the present time. Furthermore, recent studies have shown that only weak correlations exist between individual personal exposures and PM measures recorded by regional monitoring stations. Uncertainty about the true values of these variables, or errors in their measurement, leads to a serious ``errors in variables'' problem that can only be resolved with further prospective study involving adequate simultaneous measurements of both individual PM exposures and region-wide measures of air quality. Faced with such great uncertainty in the estimated magnitude of potential health impacts of the proposed new standards, it seems far more reasonable for EPA to initiate additional data collection and analysis activities on the health effects poten- tially associated with various PM fractions rather than rush to promulgate and implement new standards that could well make things worse rather than better. That completes my oral testimony. Thank you for your attention. I would be happy to answer any questions. ______ Appendix A Thomas B. Starr trained in theoretical physics at Hamilton College and the University of Wisconsin-Madison, receiving his Ph.D. in 1971. Following National Science Foundation postdoctoral and faculty appointments in the Institute for Environmental Studies at Wisconsin, he joined the staff of the Chemical Industry Institute of Toxicology in 1981, first as a senior scientist in the Department of Epidemiology, and then in 1987 as Director of CIIT's Program on Risk Assessment. In 1989, he joined ENVIRON International Corporation as a principal in the Health Sciences Division. His research interests have focused on means for explicitly incorporating knowledge of toxic mechanisms into the quantitative risk assessment process, and improving epidemiologic methods for assessing effects of chemical exposure on worker health. He has published over 80 scientific papers and abstracts, and given hundreds of scientific presentations. Dr. Starr holds an adjunct faculty appointment in the Department of Environmental Sciences and Engineering in the School of Public Health at the University of North Carolina-Chapel Hill. He has been appointed to numerous advisory posts, including the Halogenated Organics Subcommittee of the U.S. Environmental Protection Agency's Science Advisory Board, the North Carolina Academy of Sciences Air Toxics Panel, and the North Carolina Environmental Management Commission Ad Hoc Committee for Air Toxics. Currently, he serves on the Methylene Chloride Risk Characterization Science Committee, and the Secretary's Scientific Advisory Board on Toxic Air Pollutants for the North Carolina Department of Environmental Health and Natural Resources. He has testified before OSHA, EPA, and other regulatory agencies regarding human health risks posed by various chemical exposures, including those to 1,3-butadiene, cadmium, dioxin-like compounds, formaldehyde, lead, methylene chloride, and environmental tobacco smoke. He is also active in professional societies, including the American Statistical Association, the Society for Epidemiological Research, the Society for Risk Analysis, and the Society of Toxicology. In 1988-89 he served as the first President of the newly formed SOT Specialty Section on Risk Assessment, and in 1989-90 as President of the Research Triangle Chapter of the Society for Risk Analysis. 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Dudley, Vice President and Director of Environmental Analysis, Economics Incorporated Good Morning. My name is Susan E. Dudley. I am Vice President and Director of Environmental Analysis at Economists Incorporated, a consulting firm in Washington, DC. I am pleased and honored to be here before you today to discuss the risk assessment underlying the Environmental Protection Agency's proposed national ambient air quality standard (NAAQS) for ozone. My understanding of the health and welfare risks of the proposed ozone NAAQS is based on an analysis of the proposed rule and its accompanying regulatory impact analysis (RIA) that I conducted for the Regulatory Analysis Program (RAP), a research and educational program at the Center for Study of Public Choice at George Mason University. RAP is dedicated to advancing knowledge of regulations and their impact. As part of its mission, the program produces careful and independent analysis of agency rulemaking proposals from the perspective of the public interest. I am grateful to Dr. Wendy Lee Gramm, the director of RAP, for her intellectual and financial support in the preparation of the comments submitted to EPA. RAP's comments on the proposed ozone NAAQS, and its accompanying comments on the particulate matter NAAQS \1\ are available on Economist Incorporated's web site: http://www.ei.com. --------------------------------------------------------------------------- \1\ Thomas D. Hopkins, Ph.D, Arthur J. Gosnell Professor of Economics, Rochester Institute of Technology prepared RAP's comments on the PM NAAQS. --------------------------------------------------------------------------- This morning, I would like to highlight some of our most important concerns with the risk assessment underlying EPA's ozone proposal. 1. There is little scientific basis for the selection of the standard EPA recognizes that the selection of the standard was a policy decision, rather than a scientific decision. EPA's science panel did not find the proposed standard to be significantly more protective of public health than the current standard, and most members who expressed an opinion preferred a level less stringent than that which EPA has proposed. 2. EPA's preamble and RIA suggest that the health and welfare benefits expected from implementation of the proposal are small and highly uncertain The effects of ozone on the general population appear to be transient, reversible, and generally asymptomatic. Even for the population at the greatest risk, those with pre-existing respiratory conditions, the expected impact of the proposed change in ozone levels is small. With full implementation of the rule, EPA predicts a 0.6 percent decrease in hospital respiratory admissions for asthmatics. Furthermore, EPA's evidence from chronic animal studies suggests that long-term exposure to ozone does not affect lung function. 3. As a result of EPA's narrow interpretation of its mandate to protect public health, this proposal may actually harm public health and welfare EPA appears to focus on the impact of ozone on at-risk populations, particularly children with existing respiratory conditions such as asthma. While asthma is a disturbing health problem, particularly since (a) reported cases have been increasing in recent years (45 percent in the last decade), (b) one-third of its victims are children, and (c) it is most severe among the urban poor, this trend cannot be explained by ozone levels; air quality has been improving over the last decade and ozone levels in particular declined 6 percent between 1986 and 1995.\2\ Recently, the National Institute of Allergy and Infectious Diseases funded a study that revealed that ``the leading cause of asthma by far was . . . proteins in the droppings and carcasses of the German cockroach.'' \3\ The American Thoracic Society concluded: --------------------------------------------------------------------------- \2\ USEPA, National Air Quality and Emissions Trends Report, 1995. \3\ Chemically Speaking, July 1996. Poverty may be the No. 1 risk factor for asthma. . . . As with many of the health problems facing society today, education and prevention are the keys to controlling asthma in the inner city.\4\ --------------------------------------------------------------------------- \4\ American Thoracic Society, 1996 Conference Articles. Thus, even if asthma were the only public health issue of concern, the proposal may have a perverse effect on health. The potential impact on those afflicted with the disease is very small, and the costs of the rule will drain society's resources from more effective remedies. Perhaps even more disturbing is EPA's analysis (not presented as part of this rulemaking) that suggests that the proposed standard would increase health and welfare risks from ultra-violet radiation. Ground- level ozone has the same beneficial screening effects on ultraviolet radiation as stratospheric ozone. Based on EPA analysis used to support earlier rulemakings to protect stratospheric ozone, it appears that the proposed 10 ppb change in the ozone standard could result in 25 to 50 new melanoma-caused fatalities, 130 to 260 incidents of cutaneous melanoma, 2,000 to 11,000 new cases of nonmelanoma skin cancer, and 13,000 to 28,000 new incidents of cataracts each year. These negative health effects of the proposal could vastly outweigh the positive health effects attributed to it in the RIA. By converting all health effects into a dollar metric, we estimate that attainment of the proposed standard could actually increase health risks by over $280 million per year. When the costs of the proposal are considered, the negative impact on public health is even more dramatic. If, as recent studies suggest, poverty is a more important risk factor for asthma than air quality, the rule may well increase the very disease it is purportedly targeted at improving. Moreover, studies linking income and mortality suggest that the cost of this proposal would, by lowering incomes alone, result in an increase in 4,250 to 5,667 deaths per year. executive summary The Regulatory Analysis Program offers the following conclusions and recommendations regarding EPA's proposed revision to the ozone National Ambient Air Quality Standard (NAAQS) and the accompanying Regulatory Impact Analysis (RIA). A. The proposal will not improve public health and welfare EPA interprets the Clean Air Act to prohibit the consideration of costs in setting NAAQS. Even if one were to accept EPA's interpretation of its statute, EPA appears to have ignored important public health and welfare considerations. There is little scientific basis for the selection of the standard, and the health and welfare benefits attributed to the proposal are small and highly uncertain. Moreover, EPA has chosen not to consider important risk information relevant to public health and welfare, arguing that the statute only allows it to consider the negative impacts of chemicals, not their positive impacts. As a result, EPA's proposal may harm public health and welfare, regardless of cost. For example, the potential for a change in the ozone standard to increase people's exposure to ultraviolet radiation raises serious questions about the net health and welfare effects of this proposal. Taking into consideration the beneficial screening effects of ozone on ultraviolet radiation, we estimate that the impact of attaining the proposed standard would be to increase health risks by over $280 million per year. This is particularly disturbing in light of the enormous costs full attainment of this rule would impose on every aspect of our lives. When the costs of the proposal are considered, the negative impact on public health is even more dramatic. If, as recent studies suggest, poverty is a more important risk factor for asthma than air quality, the rule may well increase the very disease it is purportedly targeted at improving. Moreover, studies linking income and mortality suggest that the cost of this proposal would, by lowering incomes alone, result in an increase in 4,250 to 5,667 deaths per year. EPA has a responsibility for setting NAAQS that protect public health and welfare. To fulfill that responsibility it cannot ignore important health and welfare effects which can be readily, and reliably, quantified. B. EPA's regulatory impact analysis does not provide an adequate basis for making a sound policy judgment According to EPA's own RIA, the costs of the proposal will exceed the benefits. Furthermore, questionable assumptions and serious omissions in the RIA lead to an understatement of costs. EPA admits that ``aggregate total costs underestimate the true cost of each alternative to such an extent that the metric's reliability must be limited.'' EPA estimates the cost of only partially complying with the current and proposed standards. EPA does not include the costs of regional controls in its estimates of either the current or proposed ozone NAAQS. EPA also assumes that areas that can achieve ozone concentrations that are only 64 percent of the standard will incur no costs. As a result of these deficiencies, our analysis suggests that EPA's cost estimates reflect less than 5 percent of the true full costs of attainment. Modeling, exposure, and valuation constraints make EPA's benefit estimates very uncertain. CASAC observed that due to the compounded uncertainties in the approach to estimating welfare effects, ``small differences in benefits may have no significance . . .'' EPA places its best (i.e., most likely) estimate of the incremental health benefits of the proposed standard is at the low end of its range, between $11 million and $108 million. According to EPA, more than 98 percent of its total estimated health benefits come from reduced mortality, not the other health benefits EPA relies on to support its proposal. However, this estimate of reduced fatalities is based on a single study that was not discussed in the criteria document or staff paper, and thus not reviewed by EPA's science advisory committee (CASAC). C. The costs of the proposed standard are strikingly high Even after imposition of all feasible control measures, EPA anticipates a large degree of nonattainment. Without any change in the current NAAQS, EPA estimates that between 39 million and 57 million people will live in non-attainment areas for the foreseeable future. EPA expects an additional 14 million to 32 million people would live in non-attainment areas under the proposed revised standard. EPA estimates that partial attainment of the standard will cost billions of dollars each year and impose costs in excess of benefits on Americans of between $1.1 billion and $6.2 billion each year. These net costs are over and above EPA's estimates of the annual net costs of partially complying with the existing standard, which are also considerable--EPA estimates the costs of partially meeting the current standard will exceed benefits by between $400 million and $2.2 billion per year. The full costs of meeting this standard would be orders of magnitude higher than EPA's estimated costs of partial attainment. Our analysis suggests that the full cost of attaining the current standard will be between $22 billion and $53 billion per year. We estimate that the proposed standards will impose additional costs in the range of $54 billion to $328 billion per year (1990 dollars). D. Recommendations Based on our review and analysis of EPA's proposal, we offer the following recommendations. 1. EPA should not proceed with promulgation of the proposed standard In light of EPA's science panel's conclusion that the proposed standard (level and number of exceedances) is not significantly more protective of public health than the alternatives examined, and the very real concern that implementation of this rule will actually harm public health and welfare, EPA should not proceed with its promulgation. There may be adequate basis for changing the averaging time and form of the standard. However, as EPA's own analysis suggests that the current level of the standard already imposes social costs (both in terms of health and welfare) that exceed its benefits, EPA should not select a level and number of exceedances that is more stringent than the current standard. 2. More effective alternatives are available for addressing the potential ill effects of ozone Non-regulatory approaches are available to achieve the public health benefits targeted by this rule. As CASAC recommended in its November 30, 1995 closure letter on the primary standard, public health advisories and other targeted approaches may be an effective alternative to standard setting. Because there is no apparent threshold for responses and no ``bright line'' in the risk assessment, a number of panel members recommended that an expanded air pollution warning system be initiated so that sensitive individuals can take appropriate ``exposure avoidance'' behavior. Since many areas of the country already have an infrastructure in place to designate ``ozone action days'' when voluntary emission reduction measures are put in place, this idea may be fairly easy to implement. Furthermore, research and education are more likely to target what some public health experts regard as a more important factor behind the increasing incidence of asthma during a period in which ozone (and other pollutants) are declining--poverty and poor living conditions. i. introduction Ozone is a gas that occurs naturally in the earth's troposphere and stratosphere. It is also created when sunlight reacts with nitrogen oxides (NO<INF>X</INF>), and volatile organic compounds (VOCs). Tropospheric (ground-level) ozone is the primary constituent of urban smog. Ozone levels are heavily influenced from year to year by meteorological conditions. EPA observes that the lowest national mean level of ozone was recorded in 1992, and the highest in 1988. After adjusting for meteorological effects, however, the year to year trend shows a continued improvement in ozone concentrations of about 1 percent a year.\1\ --------------------------------------------------------------------------- \1\ U.S. EPA National Air Quality and Emissions Trends Report, 1995. --------------------------------------------------------------------------- Ozone is associated with respiratory problems, particularly in sensitive individuals. It is also credited with reducing the harmful effects of ultraviolet rays. Because it ``may reasonably be anticipated to endanger public health and welfare,'' ozone has been identified under the Clean Air Act as a ``criteria pollutant'' The U.S. Environmental Protection Agency (EPA) must periodically review and, as necessary, revise its National Ambient Air Quality Standards (NAAQS) for criteria pollutants. The CAA charges EPA with setting NAAQS that protect public health and welfare. In these comments,\2\ we examine whether EPA's December 1996 proposed revision to the ozone NAAQS meets this mandate. --------------------------------------------------------------------------- \2\ These comments were prepared by Susan E. Dudley, Vice President and Director of Environmental Analysis at Economists Incorporated with support from the Regulatory Analysis Program at the Center for Study of Public Choice at George Mason University. --------------------------------------------------------------------------- The rest of our comments are organized as follows. Section II--Review of EPA's Proposal We review EPA's statutory obligations, its interpretation of those obligations, and the factors EPA relied on in making its policy judgment regarding the appropriate standard to protect public health and welfare. This review suggests that because EPA bases its policy judgment on a narrow set of criteria, the resulting rule is likely to result in public health and welfare outcomes contrary to EPA's expressed intent. Section III--Review of EPA's Regulatory Analysis EPA's own regulatory analysis, summarized in the first part of this section, concludes that the costs of implementing the proposed standard will exceed the benefits. In the second part of this section, we identify major flaws in EPA's analysis and present revised estimates of the benefits and costs of the proposal based on our own analysis. Appendix A--Uncertainties in EPA's Analysis Due to the considerable uncertainty in the science associated with both ozone modeling and the health and welfare effects of different ozone levels, EPA's analysis necessarily involves numerous assumptions. This appendix reviews key uncertainties and assumptions. Appendix B--Ozone's Impact on Ultraviolet Radiation Ozone in the troposphere, like ozone in the stratosphere, has the beneficial effect of screening ultraviolet radiation, which is known to have various health and welfare effects including melanoma and non- melanoma skin cancer, cataracts, and crop and fishery damage. This appendix presents our analysis of the harmful public health and welfare impact that would be caused by the reduction in tropospheric ozone if this rule is implemented. Appendix C--The Full Costs of Attainment EPA's estimates reflect only the cost of partial attainment. In this appendix, we present our analysis of the full costs based (1) on assumptions EPA uses in its analysis, and (2) on our revisions to EPA's estimates. Appendix D--Control Measures to Achieve Partial Attainment This appendix reproduces EPA's Table C-1 from Appendix C of its Ozone NAAQS RIA. The table lists the control measures EPA expects to be used to achieve partial compliance with the current and proposed standards. ______ Prepared Statement of Carl M. Shy, Department of Epidemiology, School of Public health, University of North Carolina at Chapel Hill subject: epa's proposed air quality standard for particulate matter My name is Carl Shy. I was a member of the Panel on Particulate Matter of EPA's Clean Air Science Advisory Committee (CASAC), and am currently a professor of epidemiology in the University of North Carolina School of Public Health. Over the past 2 years, I was an invited participant and discussant in EPA's workshops on the health effects of particulate matter, and, as a panel member of CASAC, a reviewer of the various drafts of EPA's criteria document for particulate matter and of the staff papers recommending an air quality standard for particulates. I make this statement to urge the members of the U.S. Senate to support EPA's proposed revision of the air quality standard for particulate matter, and more specifically to support the proposal to establish a new standard for fine particulates, i.e., for particles less than 2.5 micrometers diameter (PM<INF>2.5</INF>). I agree with EPA's proposal that the PM<INF>2.5</INF> standard be established at a concentration of 15 micrograms per meter cubed, annual average. I suggest that there are three compelling reasons for EPA to establish the air quality standard for PM<INF>2.5</INF> as proposed: (1) There is ample evidence that there is a causal relationship between population exposure to fine particulates, at concentrations now existing in the air environment of many cities in the U.S., and excess mortality, hospital admissions, respiratory symptoms in adults and children, and decreases in lung function of children. I will expand on my reasons for stating that the evidence for a causal relationship is compelling. (2) Accepting the causal relationship between air particulates and excess mortality and morbidity in the population, the health burden of exposure to ambient air particulates at current levels in the U.S. is unacceptable, consisting of thousands of excess deaths, hospital admissions and respiratory disease episodes. This large health burden can be addressed by a concerted program to lower the concentration of ambient air particulates in those cities that exceed the proposed annual standard for PM<INF>2.5</INF>. This is an achievable goal, one that will have a major health benefit for a majority of the U.S. population. (3) The Clean Air Act of 1970, amended several times, requires the Administrator of EPA to establish national ambient air quality standards at a level that avoids unacceptable risks and protects public health with a margin of safety. The PM<INF>2.5</INF> standard proposed by EPA, of 15 micrograms per cubic meter annual average, provides a minimally acceptable margin of safety against the mortality and morbidity risks noted above. A number of well conducted epidemiologic studies demonstrate an increase in mortality and morbidity when PM<INF>2.5</INF> concentrations begin to exceed the proposed standard of 15 micrograms per cubic meter. In some cases, this excess mortality and morbidity is observed even when PM<INF>2.5</INF> concentrations reach 16 micrograms per cubic meter, a level that is less than 10 percent above the proposed standard. In the future, we may well find that the 15 microgram per cubic meter standard is not adequate to protect public health, but the proposed standard will at least move our country in the right direction of greatly minimizing the currently unacceptable health burden. Since the issue of the causal relationship between air particulates and mortality/morbidity of the population is crucial to the three points I am presenting in this statement, I would like to expand on my reasons for asserting that the causal relationship has been established to a degree sufficient to require EPA to propose the new standard for PM<INF>2.5</INF>. The criteria for causality I will briefly discuss are the same at those used by the Surgeon General of the U.S. in the 1965 report on the adverse health effects of cigarette smoking. These criteria are widely accepted in the scientific community as reasonable guidelines for assessing causality in the matter of disease risks to populations. These criteria are: Consistency: Many studies, numbering more than 30, have observed a significant and meaningful relationship between population exposure to air particulates and excess mortality and morbidity (the latter being increased hospital admissions, increased respiratory symptoms, and decrease lung function in children). Many of these studies have been carefully scrutinized for potential sources of error, for confounding by weather factors and season of year, for limitations in statistical methods, and for inadequacies of measurement methods. None of these potential problems were found to diminish the consistently observed relationships between adverse health effects and particulate exposures. EPA's Criteria Document for Particulate Matter, which the CASAC carefully reviewed and approved, provides extensive discussion of these issues and reaches the conclusion that the evidence is fully compatible with a causal interpretation. In comparison with the 1987 major revision of the air quality standard for particulates, when a PM<INF>10</INF> standard was established, we now have a much larger body of evidence regarding adverse health effects of particulate air pollution. Coherence: Among the more than 30 studies mentioned above, the same types of adverse health effects have been consistently observed. That is, the primary causes of excess deaths in mortality studies are deaths from heart and from lung diseases, and the primary causes of hospitalizations in morbidity studies are from diseases of the heart and lung. Other causes of death and hospital admissions do not show a consistent association with levels of air particulates. This agreement between the different types of studies strongly suggests a causal relationship, since the same disease endpoints are so consistently found when there is a common causal agent. Exposure-Response Gradient: As levels of air particulates increased, there was a proportional increase in mortality or in morbidity in the above studies. The importance of finding an exposure- response gradient is that it becomes less and less likely that risk factors other than air pollution could explain the disease gradients. To do so, these other risk factors would also have to increase in nearly perfect step with changes in air quality, and there is no evidence that such risk factors exist, in spite of considerable effort to find them. Cause Precedes Effect: The excess in mortality and morbidity consistently occurs either on the day of the elevated air particulate concentration or 1 to 2 days after the elevated concentration occurs. There is no evidence that excess mortality and morbidity precedes days with higher air particulates. Strength of the Association: The relative increase in total mortality and morbidity associated with a 50 percent increase in air particulates is not large, being on the order of 5 to 10 percent above the mortality or morbidity observed on days with the lowest concentrations. From this point of view, the association between air particulates and mortality and morbidity is not nearly as strong as it is for tobacco smoking, excess alcohol consumption, or high fat diets. But, because a majority of the population is exposed on many days to air particulate concentrations above the proposed standard, the population burden of air particulate exposures is indeed large, with deaths and hospitalizations numbering in the several thousands during the course of 1 year. (Estimates range from 10,000 to 60,000 excess deaths alone, associated with days of higher air particulate levels in the U.S.) Biological Plausibility: This criterion is satisfied when there is experimental evidence that air particulates can cause the type of human health responses that would lead to excess mortality and morbidity. We do not have firm evidence to satisfy this criterion, in part because, when animals or humans were experimentally exposed to particulates, the experimenters were unable to reproduce in the laboratory the complex mixture of particulates in the ambient atmosphere. Recently, these complex mixtures have been introduced into experimental studies, and the researchers report that they found physiological changes in the exposed animals that may indeed be precursors of mortality and morbidity. Furthermore, there is ample evidence from older studies that air pollution at considerably higher levels than now exist were causally related to excess mortality and morbidity in humans. Thus it is entirely reasonable that similar effects, but at lesser magnitude, are occurring at current elevated concentrations. Specificity: This criterion requires that there be a unique relationship between exposure to the risk factor and the disease caused by this exposure, e.g., the nearly unique relationship that exists between asbestos exposure and mesothioloma of the lung. Very few causes of human disease manifest this unique relationship. Thus cigarettes cause lung cancer, but so do a number of chemicals that exist in the occupational environment. A lack of specificity does not argue against causality, nor does a lack of any one of the causal criteria negate the argument for causality, since each of these criteria are meant to serve as guidelines in making a judgment about a possible causal relationship. Confounding by Other Air Pollutants: This is not one of the criteria addressed in the Surgeon General's report on cigarette smoking, but it is an issue frequently discussed at scientific meetings on the health effects of air pollution, and it was discussed in some depth at the CASAC meetings. The concern boils down to the question: can we conclude that fine particulates, as indexed by PM<INF>2.5</INF>, are the causal agent responsible for the consistently observed excesses of mortality and morbidity? In my opinion, and in the opinion of other epidemiologists who are closely involved with research on the health effects of air pollution, the answer is, yes, it is reasonable to conclude that fine particulates, rather than any other regularly measured air pollutant, is our best measure of the causal agent. No other known air pollutant so consistently demonstrates an exposure- response relationship with mortality and morbidity across the many different studies reported in the literature. Although there are cities in which gaseous air pollutants, such as sulfur dioxide and ozone, are sometimes highly correlated with fine particle concentrations (and thus prevent drawing conclusions as to the most likely causal component in the air pollution mixture), there are enough studies in which the other pollutants were either present in such low concentrations that adverse health effects from these levels would be unlikely, or there were studies in which the correlation between particles and other air pollutants was sufficiently small to enable the investigators to distinguish between the effects of the different pollutants. Moreover, there is sound biological evidence that fine and ultrafine particles penetrate deeply into the lung and produce an inflammatory response, whereas gaseous air pollutants do not reach the lower portions of the lung except by becoming attached to fine particles. There are many hazardous agents, often consisting of a complex of chemicals that cause significant human health risks, for which we do not know the precise causal component, but which we clearly know is part of the causal chain leading to harm. Several prominent examples of this can be cited, such as cigarette smoke and high fat diets. There are more than 200 chemicals in cigarette smoke, a number of which may cause lung cancer, chronic lung disease, and heart disease, but we do not know precisely which of these chemicals are actually the causal agent for these consequences. The relationship between fine particulates and excess mortality/morbidity is analogous to the smoking-health effects association. Fine particulates are the best single indicator of that component of the air pollution mixture consistently associated with excess mortality and morbidity. From this point of view, fine particulates are the causal agent, in the sense that they are a very useful and predictable marker for the complex of chemical and physical factors that are causing the unacceptable health consequences, just cigarettes are the causal agent for smoking-related deaths and disease. No other component of the air pollution mix is compatible with the diversity of findings on excess mortality and morbidity reported in the above studies. For all of the above reasons, EPA has made the argument that a causal interpretation for fine particulates is a reasonable one. If we fail to take action on reducing population exposure to fine particulates, as proposed by EPA, we run the significant risk of continuing to allow thousands of excess deaths and diseases, with all of the associated societal costs, that could otherwise be prevented. It is not reasonable to wait until advances are made in scientific knowledge to prove conclusively that fine particulates are or are not the specific causal agent. We have sufficient evidence that fine particulate are a part of the causal chain, and that reduction in fine particulate levels is an efficient strategy to interrupt this chain. Thank you for the opportunity to present this statement. [GRAPHIC] [TIFF OMITTED] T6586.105 [GRAPHIC] [TIFF OMITTED] T6586.106 [GRAPHIC] [TIFF OMITTED] T6586.107 [GRAPHIC] [TIFF OMITTED] T6586.108 [GRAPHIC] [TIFF OMITTED] T6586.109 [GRAPHIC] [TIFF OMITTED] T6586.110 [GRAPHIC] [TIFF OMITTED] T6586.111 [GRAPHIC] [TIFF OMITTED] T6586.112 Responses by Morton Lippmann to Questions from Senator Lieberman Question 1. Some have contended that the effects of ozone are not that serious and that a temporary loss in lung function of 20 to 30 percent is not really a health effect. Do you think this is true? How serious is a loss of 20 to 30 percent of lung function in asthmatics and other sensitive populations--the groups the Clean Air Act is intended to protect? Response. Many of the effects of ozone are quite serious. On page 5 of my prepared remarks, I showed the pyramid of effects attributed to ozone in New York City. These range from the most serious, i.e., premature mortality, and hospital admissions for asthma and for other respiratory diseases. Somewhat less serious, but more prevalent effects include the asthma attacks and restricted activity days. Less serious effects include symptoms and modest changes in lung function (<20%) in healthy individuals. The diagram of effects did not include the respiratory function responses, which vary in seriousness between healthy individuals and those with chronic lung disease. In an individual with asthma or chronic obstructive pulmonary disease, a 20% decline in lung function can be quite serious, and lead directly to the need for increased medication usage, physician or clinic visits, and/or restricted activities. Question 2. An issue associated with the ozone standard is who responds and how much. Dr. Chilton used a figure (from p. 31--Ozone Staff Paper) in his testimony that shows relatively small lung function declines for varying ozone and exercise levels. Is this the most appropriate way to illustrate the typical distribution of lung function declines in ozone chamber studies? Response. The figure illustrating declines in lung function in relation to ozone concentration and level of exercise does not represent several important aspects of our current knowledge. First, it is based on two-hour exposures, and therefore does not depict what happens during the chamber exposures lasting 6.6 hours. The great increase in average response during successive hours is illustrated on p. 32. Second, it only shows the average response. It is well known that some individuals have essentially no response, while a significant portion of the population have much greater than average responses. These people must breathe the ambient air and need to be protected. Question 3. One of Ms. Dudley's arguments for not setting a tougher ozone standard is that while air pollution is dropping, the incidence of respiratory disease is increasing. If this is true, the argument might be, then air pollution is not causing respiratory disease. What is your response to this? Response. The incidence of asthma has indeed been rising. There is one recent report (Abbey, D.E. Presentation at 1997 Annual Conference of the Health Effects Institute) that indicates asthma incidence among Seventh Day Adventists in California was significantly associated with ozone. However, even if ozone was not associated with asthma incidence (new cases), it is well known that ozone is highly correlated with the frequency of asthma exacerbations. Thus, more asthma prevalence (from whatever causes) leads to more ozone exacerbations. Question 4. I think you've been clear in your testimony before this Committee that you believe the Administrator made a prudent public health decision with respect to both the particulate matter and ozone standards. I also think you have been clear that you do not support substituting a research program for the proposed particulate matter standard. Is this correct? Response. Yes. I see no good reason to delay the promulgation of the ozone and fine particle standards proposed by the EPA Administrator in November 1996. It is true that currently mandated reductions in SO<INF>2</INF>, NO<INF>X</INF> and hydrocarbons will bring down ozone and fine particle concentrations in future years, but are not likely to be optimally targeted to meet health protection goals based on 8 hr ozone and PM<INF>2.5</INF> targets. It is only by having better targets that our health protection goals can be efficiently structured. At the same time, a minimum of $50 x 10<SUP>6</SUP> per year for targeted NAAQS research represents a wise investment decision for the creation of a much firmer data base for the difficult NAAQS decisions that will be needed early in the next decade. [GRAPHIC] [TIFF OMITTED] T6586.113 [GRAPHIC] [TIFF OMITTED] T6586.114 [GRAPHIC] [TIFF OMITTED] T6586.115 [GRAPHIC] [TIFF OMITTED] T6586.116 [GRAPHIC] [TIFF OMITTED] T6586.117 [GRAPHIC] [TIFF OMITTED] T6586.118 [GRAPHIC] [TIFF OMITTED] T6586.119 [GRAPHIC] [TIFF OMITTED] T6586.120 [GRAPHIC] [TIFF OMITTED] T6586.121 [GRAPHIC] [TIFF OMITTED] T6586.122 [GRAPHIC] [TIFF OMITTED] T6586.123 [GRAPHIC] [TIFF OMITTED] T6586.124 [GRAPHIC] [TIFF OMITTED] T6586.125 [GRAPHIC] [TIFF OMITTED] T6586.126 [GRAPHIC] [TIFF OMITTED] T6586.127 [GRAPHIC] [TIFF OMITTED] T6586.128 [GRAPHIC] [TIFF OMITTED] T6586.129 [GRAPHIC] [TIFF OMITTED] T6586.130 [GRAPHIC] [TIFF OMITTED] T6586.131 [GRAPHIC] [TIFF OMITTED] T6586.132 [GRAPHIC] [TIFF OMITTED] T6586.133 [GRAPHIC] [TIFF OMITTED] T6586.134 [GRAPHIC] [TIFF OMITTED] T6586.135 [GRAPHIC] [TIFF OMITTED] T6586.136 [GRAPHIC] [TIFF OMITTED] T6586.137 [GRAPHIC] [TIFF OMITTED] T6586.138 Prepared Statement of Mary Nichols, Assistant Administrator, Office of Air and Radiation, U.S. Environmental Protection Agency Mr. Chairman, Members of the Subcommittee, thank you for inviting me to discuss the implementation efforts associated with the Environmental Protection Agency's (EPA's) proposed revisions to the national ambient air quality standards for particulate matter and ozone. For 26 years, the Clean Air Act has promised American adults and American children that they will be protected from the harmful effects of dirty air--based on best available science. Thus far, when you consider how the country has grown since the Act was first passed, it has been a tremendous success. Since 1970, while the U.S. population is up 28 percent, vehicle miles traveled are up 116 percent and the gross domestic product has expanded by 99 percent, emissions of the six major pollutants or their precursors have dropped by 29 percent. The Clinton Administration views protecting public health and the environment as one of its highest priorities. We have prided ourselves on protecting the most vulnerable among us--especially our children-- from the harmful effects of pollution. When it comes to the Clean Air Act, we take very seriously the responsibility the Congress gave us to set air quality standards that ``protect public health with an adequate margin of safety''--based on the best science available. The Clean Air Act requires EPA every 5 years to review national ambient air quality standards and, if necessary, revise them to reflect the best available science. This standard-setting process includes extensive scientific peer review from experts outside of EPA and the Federal Government. After 3\1/2\ years of scientific peer review and public involvement, based on our reading of the best available science, the Administrator has proposed new standards for particulate matter and ozone that we believe are required to protect the health of the American people. As you know, at this point we have only proposed revisions to the standards for these two pollutants. We take very seriously our obligation to carefully consider all public comments on these proposals before making a final decision. We have heard from small businesses, industry, State and local governments, Federal agencies, and other citizens like the elderly, children, doctors and people with asthma. While we have proposed specific levels for each pollutant, we have also asked for comment on a wide range of alternative options. We do not intend to make a final decision until we have carefully considered comments on all of those alternative options. Throughout the history of the Clean Air Act, national ambient air quality standards have been established based on an assessment of the science concerning the effects of air pollution on public health and welfare. Costs of meeting the standards and related factors have never been considered in setting the national ambient air quality standards themselves. This has been the case through six Presidential administrations and 14 Congresses, and has been reviewed by the courts. We believe this approach is appropriate. In choosing proposed levels for the ozone and particulate matter standards, EPA's focus has been entirely on health, risk, exposure and damage to the environment. Sensitive populations like children, the elderly and asthmatics deserve to be protected from the harmful effects of air pollution. And the American public deserves to know whether the air in its cities and counties is safe or not; that question should never be confused with the separate issues of how long it may take or how much it may cost to reduce pollution to safe levels. Indeed, to allow costs and related factors to influence the determination of what levels protect public health would be to mislead the American public in a very fundamental way. However, once we revise any air quality standard, it is both appropriate and, indeed, critical that we work with States, local governments, industry, Federal agencies, and others to develop the most cost-effective, common-sense strategies and programs possible to meet those new health standards. Under the Clean Air Act, States have primary responsibility for devising and enforcing implementation plans to meet the national air quality standards. We are determined to work with States and others to ensure a smooth transition from efforts to implement the current standards with efforts to implement any new standards. And we have been actively working to do just that. By 1995 it became apparent from the emerging body of science that we may have to propose revisions to one or both of the ozone or particulate matter national ambient air quality standards, as well as fulfill our obligations on developing a regional haze program. At that time we determined that the best way to meet the goal of developing common-sense implementation strategies was to bring in experts from around the Nation to provide us their advice and insights. As a result, we used the Federal Advisory Committee Act to establish a Subcommittee for Ozone, Particulate Matter and Regional Haze Implementation Programs. John Seitz, Director of my Of- fice of Air Quality Planning and Standards, co-chairs that Subcommittee, along with Alan Krupnick from Resources for the Future, Inc. The Subcommittee is composed of about 75 representatives from State and local government, industry, small business, environmental groups, other Federal agencies and other groups. It also includes five working groups comprised of another 100 or so members of these same kinds of organizations. The Subcommittee and the various workgroups have been meeting regularly for over 18 months to hammer out strategies for EPA and the States to consider in implementing any revised standards. Members from industry, State governments and others are putting forward position papers advocating innovative ways to meet air quality standards. It is our belief that results from this Subcommittee process are leading to innovative approaches for implementing any new standards. The Subcommittee will continue to meet over the next year to help develop cost-effective, common-sense implementation programs. The questions being addressed by the Subcommittee include: <bullet> What will be the new deadlines for meeting any new standards? [If EPA tightens a standard, it has the authority to establish deadlines of up to 10 years--with the possibility of two additional 1-year extensions--beyond the date an area is designated ``nonattainment.''] <bullet> What will be the size of the area considered ``nonattainment''? [If it revises an air quality standard, EPA has the ability to establish the size of the affected nonattainment areas and focus control efforts on those areas that are causing the pollution problems, not just the downwind areas that are monitoring unhealthy air.] <bullet> How do we address the problem of the pollutants that form ozone and/or fine particles being transported hundreds of miles and contributing to nonattainment problems in downwind areas? <bullet> What kinds of control strategies are appropriate for various nonattainment areas? Can we use the experience of the past several years to help States target those control strategies that are the most cost-effective? <bullet> How can we promote innovative, market-based air pollution control strategies? The implementation of revised standards is likely to focus on sources like cars, trucks, buses, power plants and cleaner fuels. In some areas, as with the current standards, our analysis shows that reaching the standards will present substantial challenges. All of the air pollution control programs we are pursuing to meet the current ozone and particulate matter standards, as well as certain programs to implement other sections of the Clean Air Act, will help meet any revised standards. For example, the sulfur dioxide reductions achieved by the acid rain program will greatly reduce levels of fine particles, particularly in the eastern United States. Cleaner technology in power plants would greatly reduce the nitrogen oxides that help form ozone across the eastern United States. In announcing the proposed ozone and particulate matter standards last November, we initiated steps to obtain even broader views from stakeholders on implementation strategies. We expanded the membership of the Federal Advisory Subcommittee to include more representation from small business and local governments. Also, in conjunction with the Small Business Administration and the Office of Management and Budget, we are holding meetings with representatives of small businesses and local governments to obtain their input and views on how best to implement our proposed standards. We intend to announce our proposals on implementation of the proposed new standards in phases that correspond to the Subcommittee's schedule for deliberating on various aspects of the program. The Administrator has stated her intention to propose the first phase of the implementation program at the same time that we announce our final decision on revisions to the ozone and particulate matter standards. Mr. Chairman, this concludes my written statement. I will be happy to answer any questions that you might have. ______ Prepared Statement of Benjamin Y. Cooper, Senior Vice president, Printing Industries of America Mr. Chairman and members of the Subcommittee on Clean Air, Wetlands, Private Property and Nuclear Safety, I want to thank you for the opportunity to testify on the proposed revision of the National Ambient Air Quality Standards for ozone and particulate matter. My name is Benjamin Y. Cooper. I am senior vice president for the Printing Industries of America. I appear before you today in behalf of PIA and the Small Business Legislative Council. The Printing Industries of America is the nation's largest graphic arts association with more than 14,000 members. The Small Business Legislative Council is a permanent coalition of nearly 100 trade associations. This year, I have the privilege to serve as chairman of SBLC. The Printing Industries of America and I as the industry's representative have extensive experience working with the Environmental Protection Agency and State government on environmental matters. I have served as a member of EPA's Clean Air Act Advisory Committee since it was formed following the passage of the 1990 Amendments to the Act. I subsequently was appointed to the subcommittee charged with advising EPA on the implementation of the new standards. I have also been appointed to the Small Entity Caucus and the Small Entity Review Team at EPA to provide information on the impact of the implementation of the standards on small business. Further, the industry is one of EPA's Common Sense Initiative sectors and a partner in the Design for the Environment project. Finally, we have been involved for nearly 4 years with the Council of Great Lakes Governors and the Environmental Defense Fund in the Great Printers Project, a major pollution prevention project for our industry. The EPA has been a strong supporter of this project. In addition to these specific projects, PIA along with the National Federation of Independent Business and the American Furniture Manufacturers' Association lobbied successfully for the passage of the Small Business Technical Assistance Amendment to the 1990 Clean Air Act Amendments. This program known as the ``507'' program after the section of the Act has been enormously successful despite underfunding and has become a model for small business programs in other environmental legislation. My purpose in outlining these activities is to establish the fact that we are an industry which is working to support positive environmental actions. We are not alone. Many small business groups are working on similar projects. As you know, small business is uniquely tied to its community A good, sustainable environmental policy is critical to the future of these businesses. I want to address several issues connected to the NAAQS proposal, but I want to say at the outset that EPA and the Administrator have done a great deal to open communication with small business and to explore opportunities for alternative paths to compliance. While EPA's work with small business continues to have room for improvement, it is our opinion that EPA does more than any Federal agency in seeking the cooperation of small business. We meet regularly with senior officials at EPA on a variety of topics including regular meetings with Deputy Administrator Fred Hansen. Further, the EPA Small Business Ombudsman continues to provide a level of service to which all agencies should aspire. Now I wish to highlight our concerns with the proposed standards and their implementation plans: the standard is not necessary We understand the Clean Air Act's requirements for a review of the scientific and health data and the need to make changes in the NAAQS when the data suggests a need to do so. What we do not understand is how a change can be suggested when the air is steadily improving and when the 1990 amendments to the Clean Air Act have not yet been fully implemented. In fact, significant portions of the Act have not been implemented. It would have been a genuine surprise if the health and science advisors to EPA had come back with a conclusion that there is no relationship between air pollutants and health. It is also an obvious conclusion to suggest that the cleaner the air the less adverse affect on health. It is quite a leap in logic to say that because of these conclusions, the entire nation has to undergo an extremely expensive regulatory adventure which may or may not achieve the desired results. There is an assumption that the Federal Government must set a standard for the nation--including its States and localities and its businesses or progress will stop. In fact, State, localities, small printing company owners and other small businesses believe we have as much as, if not a greater, stake in a clean environment than the Administrator. Printers work with State officials on a regular basis to develop programs to improve compliance where it is required or voluntary reductions of emissions where compliance is not required. The printing industry has cooperative projects in Illinois, Michigan, Minnesota, Wisconsin, Massachusetts, Florida, Ohio and Texas. Other States are examining similar opportunities. In virtually all of these instances, the vast majority of the companies participating in the programs are too small to be considered major sources under the current Clean Air Act or under State programs. Instead, these companies are seeking ways to reduce emissions of all types as good management practice. These are all actions which have been generated at the State level in full cooperation with the businesses in the States. In fact, with the exception of very large companies in our industry, regula- tion of printing companies is done at the State level. Our members would argue that the States are doing their job aggressively. epa's data base is flawed EPA has based much of its activities to date and predicates future activities on an assessment of the emissions from various industries. For example, EPA estimates the volatile organic compounds released by the printing industry is approximately 101,000 tons, making printing the fifth largest source of VOC's among stationery sources. This data may be correct but neither we nor they could verify it. Their information is taken from models based on permits supplemented with other types of industry information; however, permits are not accurate. It is instructive to understand the real world of permits to understand this point. Permits are not issued based on what a company does but on what a company is capable of doing or what it might do under certain circumstances. Further, if the company hopes to get more business, it has to buy a bigger permit than it may currently need to accommodate the growth. One of the most contentious issues emerging from the Clean Air Act Amendments of 1990 was that emissions are based not on actual emissions but the potential to emit. To date, PTE as it is known has been calculated in most parts of the country as operating 24 hours per day throughout the year at full capacity. Clearly no one does this. Printing company owners probably dream of being able to use their equipment to full capacity. PTE can be modified if a company can prove through emission monitoring that their actual emissions are lower. Unfortunately, small business has difficulty coming up with such proof since monitoring emissions is very costly. The EPA is currently in the process of revising its rules on PTE and we believe the revisions will be satisfactory. However, the current figures issued by EPA are based on existing calculations. It is entirely possible that if EPA had the resources to study the emissions from the printing industry, they would find that we do not have the amount of emissions they project. In addition, in the printing industry, three types of sources are subject to Federal controls- gravure, flexographic and large heatset web printing companies. The rest of the industry has an altogether different emission profile from these companies; therefore, conclusions drawn from one of the three printing processes with Federal standards do not apply to the rest of the industry. It is our understanding that other small business industries have similar problems. epa does not have adequate guidance for the states One of the long-standing issues between the printing industry and EPA has been the development and publication of control techniques guidelines (CTG). Twice in the past 17 years, EPA has begun a CTG project for the industry and twice has abandoned the project. In the first case, EPA completed a significant portion of the CTG, but stopped the project when industry objections to their conclusions reached a critical stage. Nevertheless, the draft-with its flaws-was released to the States. That draft CTG in the early 1980's created significant problems for us since States were regulating based on faulty conclusions. In the 1990 Amendments, EPA was required to complete work on 12 CTG's. We were to have been one of these CTGs. However, despite completing most of the work, the document was never completed. EPA made available an Alternative Control Techniques document. Unfortunately, failure to complete the CTG left the industry without the kind of uniform guidance which would have resolved many difficulties at the State and local level. Issuance of a CTG by EPA means that the guidance described is used by the States whereas an ATC merely provides examples of processes. We are attempting to get this project back on track at EPA since consistent guidance would reduce regulatory costs for us and enforcement costs for the States and EPA. We have had recent meetings with EPA officials and we believe this matter may be finally be resolved. One of the major problems faced by EPA is having to make technical decision regarding U.S. industry. These industries are complex and must be thoroughly understood in order to issue good regulations. This is a time consuming and costly process but absent the process, industries such as printing are faced with regulations that do not make sense and do not improve air quality. EPA's problems are magnified when the industry is predominantly small businesses such as printing. It is clear that the agency should devote more of its resources to this level of activity well in advance of enforcement activities. small business will be hardest hit by the new standards We have heard that EPA plans to target certain industrial segments under the new NAAQS. Further, we have been lead to believe that if the emissions can be achieved from these sources, it will not be necessary to go after small sources. Unfortunately, life in the environmental regulation community does not work that way. EPA rarely regulates small business directly. Small business is subject to regulations by States and regions under State implementation plans or SIPS. These SIPS lay out the plan for reducing emissions through an area. Establishment of a SIP is often a political fight. Small business falls into the category known as area sources. Typically, a State must reduce a target amount from such area sources. This is often done by a percentage basis-telling all companies of a certain size to reduce by a specific percentages on an industry basis- lowering the level at which companies in an industry must be permitted. At that point, the agency often issues control requirements known as Reasonably Available Control Technology. If the technology requirement is inappropriate, the industry in faced with a fight to change the proposal. This is done on an area by area basis. Emission reductions on area sources is a regulatory version of carpet bombing. While the problems on large businesses are no less onerous, they are generally armed with specialists to meet with the agency. Large sources may even have an opportunity to negotiate timetables or control strategies. Small business rarely has such help. It is also rare that small companies have the resources to implement the kind of controls required by the agency. Sometimes the control are add-on devices which in our industry can cost millions of dollars. Other times the requirements are ``process controls'' where the printer has to change the chemistry of the printing process. Some of these changes are practical; some are not. Government officials have proposed total enclosure of printing presses as a control option leaving the obvious difficulty of getting the press operator safely to the press. We have had process controls recommended which compromise the printing process itself. Often these controls are suggested in advance of thorough review. Often industry protests are ignored until substantial resources have been invested to produce counter arguments. From a purely political standpoint, it is often easier for a State agency to apply a general 10 percent emission reduction requirements on a large group of area sources than to apply a costly engineering control on one or a relative handful of very large sources. Often the small sources do not know what has hit them until the process is over. The development of the NAAQS standards is typical of what happens to small business. Many in the small business segment were caught by surprise at EPA's plans. While the printing industry has been represented at many of the meetings, there was very little small business representation until recently. It was only after the proposals had been issued and a good portion of the work of the implementation subcommittee had been finished that small business was invited to begin meeting with EPA. Fortunately, it may not be too late for small business to influence the process and EPA officials seem to be genuinely interested in our views. epa should provide a regulatory impact analysis We have been in an ongoing discussion with EPA about whether or not various laws apply to this proposed new standard and its implementation. Candidly, for most of us in small business, we cannot understand why an agency would not want to thoroughly gauge the impact of a regulation on small business. We have never understood why any arm of government would have to be forced by law to assess the harm that may result from an agency action. In the case of the current proposal, any delay or cost impact of the analysis would be more than offset by the positive results of such analysis. We recommend that EPA take this concept one step further by aggressively seeking ways to limit the adverse affect of the proposals on small business. Since the Act does not require EPA to include small sources in the Federal program, it could use the implementation strategy to develop clear alternative programs for small business. the implementation proposal may be too confusing EPA is reviewing various recommendations from the implementation subcommittee of the Clean Air Act Advisory Committee which would change areas to which the new standards would be applied. These new areas known as areas of influence and areas of violation would replace the current designations for non-attainment. We would urge careful consideration of the impact of these new areas on small busi- ness. While the current regime may not provide the ideal framework for dealing with every air emission problem, the business community- including the small business community-understands attainment and non- attainment. Whenever possible, we should avoid the implementation of new terms of bureaucratic management such as AOV's, AOI's, RAMP'S and RIP'S. These new terms would be in addition to SIPS. we thought the age of command and control regulation was over We keep hearing that the age of command and control regulation is over and yet we keep getting new commands. As I outlined above, the printing industry has involved itself in as many projects as EPA has offered. We want to participate, learn and improve; however, if this new standard goes into effect, I could not encourage our industry to engage in similar projects in the future. What is the point of working toward consensus on environmental issues when the final step in the process is to raise the bar? An argument could be made that an industry which waits for regulations rather than seek change may spend fewer resources in the long run. It would be ironic if the proposal by Administrator Browner had the effect of killing the projects which have marked her service at EPA. what do we recommend 1. We know that EPA must review the NAAQS periodically. If the Administrator is convinced that this standard is necessary, it should only be implemented when it is clear that the current standard is no longer achieving the desired results. One way of approaching the new proposal is to make it conditional subject to review after the full implementation of the current Act. 2. At a minimum, a final decision on the proposed standard should be delayed until a full inventory of current emissions from industry has been developed and subjected to thorough review. Further, the standard seems to need additional scientific and medical review. Additional time would assure that such review can occur. 3. EPA should be specifically required to conduct a thorough regulatory impact analysis. This standard has the potential to permanently drive manufacturing away from significant portions of the U.S. and make it virtually impossible for any inner city to attract manufacturing jobs. We do not believe this should be a burden to the agency but an opportunity. 4. EPA should be required to fully implement the 1990 Clean Air Act amendments before embarking on a new regulatory plan. An example of this includes the 507 programs referenced above. While the full implementation of these programs is required under the Act as a condition of SIP approval, most States do not have adequate programs. Many States are cutting back on such programs due to the pressure from EPA for enforcement. Despite what we hear about the end of command and control, it is command and control that gets the funds while help and information get short-changed. 5. Finally, EPA has an unprecedented opportunity to practice what it preaches. As we have said, there is nothing in the Act that requires EPA to regulate small business. In fact, as we have stated, most of the regulations on small business come at the State level under pressure from EPA. EPA has the power to provide incentives to the States to deal with small sources through technical and educational assistance. Under such a plan, States could be given credits toward their SIPS equal to the emissions contribution from area sources for properly implemented technical assistance programs. The reality is that neither EPA nor the States have the resources to follow through on command and control activities. The agency may be amazed to find that if you provide guidance and help, small companies may just do the right thing. ______ Prepared Statement of Pat Leyden, Deputy Executive Officer, South Coast Air Quality Management District Good morning Mr. Chairman and members of the Committee. It is a pleasure to be here. My name is Pat Leyden and I am a Deputy Executive Officer at the South Coast Air Quality Management District in Southern California. As the Senate considers the proposed new air pollution health standards, a number of important implementation issues warrant discussion. We need to understand: <bullet> what types of sources are likely to be subject to additional clean-up requirements: <bullet> how much time will be allowed to achieve the standards; and <bullet> how can we accomplish our objectives with equity and at the lowest possible cost. I have had the honor of working for the District on air pollution abatement for the last 8 years. I am responsible for rules, permits, and enforcement for all of the stationary sources in our air basin. Much progress has been made; but, we still have the worst air quality in the Nation. Thus, my job involves a continuous effort to find the least painful path to clean air. Without apology--I can tell you that I have written and implemented some of the toughest command-and-control air pollution regulations in the world. But, I am also here to tell you that I think there is a better way. I'd like to take just a few moments and tell you about our success with the use of market-based strategies, such as emissions trading programs. In particular, I'll focus on our mass cap program, called RECLAIM. Then, I'll close with a few comments on the potential use of trading programs to achieve the proposed new health standards. i. reclaim RECLAIM is the nation's largest multi-industry emissions trading program. RECLAIM stands for Regional Clean Air Incentives Market. Over 330 of our largest pollution sources have a mass emissions facility cap that declines annually. The program covers facilities that emit four tons or more a year of either Nitrogen Oxide (NO<INF>X</INF>) or Sulfur Oxide (SO<INF>X</INF>). The types of industries included are: refineries, power plants, cement kilns, aerospace, food manufacturing, textiles, metal melting, hotels, and even amusement parks. Facilities under RECLAIM have the flexibility to choose the least expensive way to reduce emissions. If they reduce more than required, they can sell credits to other facilities. The program is mandatory and all reductions will be accomplished by the year 2003. RECLAIM replaced 32 command-and-control rules. In both the NO<INF>X</INF> and SO<INF>X</INF> markets, these facilities will cut their emissions by almost two-thirds. (Note, the specific emissions reductions are: 73 percent for the NO<INF>X</INF> market and 63 percent for the SO<INF>X</INF> market.) This type of commitment to reducing pollution did not come from a vacuum or simple good will. Dirty air, political resolve and the cost of command-and-control rules created the momentum. For 2 years, over a thousand individuals, companies, and organizations worked with the District, the State, and EPA to forge the regulations. It goes without saying that there were major battles along the way, over every detail from starting allocations to emissions monitoring. In the end, EPA, the Governor of California, and over 80 percent of the companies affected urged the adoption of the regulation. RECLAIM went into effect in January, 1994. After 3 years of implementation, the success of the program has exceeded our initial expectations. In brief, here is the report card. <bullet> Actual emissions are a third lower than allocations. (Note: Use of historic emissions allowed companies an allocation slightly higher than actual emissions for the first 3 years. Some groups were concerned that this would result in an increase in pollution. This has not been the case.) <bullet> Facility compliance is better than seen in many command and control rules. Actual Emissions are reported daily from computerized Continuous Emission Monitors for 85 percent of the market, smaller sources use non-resettable fuel meters. Public knowledge of total emissions is vastly superior to command-and-control. Compliance at the end of the first year was 87 percent, and rose to 92 percent at the end of the second year. Even higher compliance is anticipated at the end of the third year. <bullet> Trading of excess emissions to support increases in production and plant modernization has exceeded expectations. To date, more than $33 million have been traded. The cost per ton of each pollutant is well below national averages for the cost of emissions control. (Note: The price of NO<INF>X</INF>, for the year 2000 and beyond ranges from $1,500 to $1,700/ton; for the same period the price of SO<INF>X</INF> is $2,000/ton.) <bullet> Job loss attributed to RECLAIM has been dramatically lower than what was forecast for the command-and-control rules that it replaced. (Note: The job loss for the command-and-control rules was estimated at 2,013 jobs forgone annually. The RECLAIM job loss was less than 4 percent of the forecast in the first year, and less than 2 percent in the second year.) <bullet> Under RECLAIM, the cost of achieving emission reductions has been cut almost in half. The final story on actual costs won't be available until all emissions are reduced in the year 2003. However, based on the first 3 years of reductions, it appears that the initial estimate of an annual cost savings of 42 percent under-estimated reality. (Note: the command-and-control cost was estimated at $139 m/yr, compared to the RECLAIM estimated cost of $80 m/yr.) RECLAIM works. It not only works for the companies now in the program, it suggests that the power of emissions trading in the marketplace should be used to lower the costs of compliance for other companies as well. To this end, the District has adopted numerous rules for voluntary excess credits to be produced from mobile and area sources. These credits can currently be used by RECLAIM sources. The District hopes to be able to broaden their use to other sources. RECLAIM is a success story about reducing emissions from burning fuel. As the Senate assesses the new air pollution health standards, this consideration of what works is especially germane. ii. the new standards and additional emission reductions In many parts of the country, the new standard may require sources to meet emission limits similar to those in place in California. Control strategies will vary region by region, depending on the composition of each area's emissions inventory, and the severity of the non-attainment problem. The District's initial analysis of the proposed new standards leads to the conclusion that the driving force for additional emission reductions will come from the 2.5 particulate standard. After 2 years of inventory analysis, at a cost of $1.3 million, the South Coast Air Basin has some of the best data in the Nation on what sources contribute to the small particulate problem. Meeting the new standard will require additional emission reductions from fuel combustion sources. In our region, we estimate that an additional 35 percent reduction may be required. Our largest contributors are doing what is needed under RECLAIM. Additional reductions will need to be considered from other sources. High on the list of priorities will be diesel sources, including those regulated at the Federal level. A few examples are: ships, trains, planes, interstate trucks, and off-road construction and agricultural equipment. In addition, many small sources have protected status under the Clean Air Act, even though their emissions can be lowered by today's technology. Some examples include: refrigerators, stoves, and small internal combustion engines. Although individually small, these sources add up. It has been estimated that the emissions from small internal combustion engines is today greater than the largest power plant in our air basin. Our RECLAIM experience illustrates that compliance costs can be lowered when there are differential costs of control between sources in a market. The classic advice of economists is true. The market does incentivize the development and use of low-cost reductions. The procedures to verify emissions from fuel burning are now well- established for most types of sources. This allows emission credits to be a blue chip investment in the marketplace. iii. conclusions Members of the Committee, I'll close with a few summary observations. First, the South Coast Air Quality Management District supports the new standards. Our No. 1 request is for adequate time to achieve the new target. We cannot be held to our current deadline of the year 2010. Additional time will be needed. Second, trading programs are important tools to be used in implementing the proposed new standards. Trading programs are not a magic, painless potion. There are significant costs to cleaning our air. There will be hard tradeoffs as we push for cleaner fuels, equipment, and products. Trading programs do not decrease government's work in developing plans or rules, permitting sources, or assuring compliance. But, they do give businesses much greater flexibility and offer the promise of significantly lowering the price tag. For RECLAIM to have been adopted, a strong political will to clean up the air was required. For RECLAIM to be a success, a strong partnership was needed with business and the environmental community. The same will be true as the Senate considers the new standards. Mr. Chairman and members of the Committee, thank you for the opportunity to speak. ______ Responses by Pat Leyden to Questions from Senator Lieberman Question 1. How has air quality in the SCAQMD improved since 1970? Why do you think SCAQMD was able to make good progress in cleaning up the air? Response. Past air quality programs have resulted in dramatic improvements in Basin air quality. In spite of the growth in population and vehicle miles traveled, ozone levels have been reduced in half over the past 30 years, sulfur dioxide and lead standards have been met, and other pollutant concentrations have significantly declined. And, for the first time in 1992, the Federal annual nitrogen dioxide standard was not exceeded in the Basin. However, the Basin still experiences exceedances of health-based standards for ozone, carbon monoxide, and particulate matter under ten microns (PM<INF>10</INF>). These dramatic improvements in Basin air quality are the direct result of a long-term comprehensive strategy to reduce emissions from stationary, mobile and area sources. This strategy included highly innovative and often the Nation's most stringent pollution control programs, such as conventional stationary source control programs, as well as new market-based programs such as RECLAIM (REgional CLean Air Incentives Market), mobile source tailpipe standards and reformulated gasoline, and consumer product regulations. Figures 1-1 through 1-4 demonstrate graphically the improvements in air quality over the last two decades. Figure 1-1 demonstrates the significant decrease in the number of days exceeding State and Federal ozone standards, health advisory and episode levels for the years 1976- 1996, while Figure 1-2 demonstrates the significant reduction of the maximum ozone concentrations recorded in the Basin for the years 1955- 1996. Figures 1-3 and 1-4 show the downward trend of the number of days exceeding the Federal standards, and State standards, respectively, for the years 1976-1996. [GRAPHIC] [TIFF OMITTED] T6586.139 [GRAPHIC] [TIFF OMITTED] T6586.140 Question 2. From your experience, has industry developed new technologies that were not available at the time of enactment of air quality standards? What do you think the impact might have been if SCAQMD had waited before all technologies were available to set the standard? Response. This question can be answered by breaking it down into four other easy questions. First, is today's technology significantly cleaner than it was 27 years ago when the current Federal air standards were first adopted? Yes. Every major emissions category is both cleaner and more efficient. This is true for mobile sources (cars, trucks, and buses), volatile organic products (solvents, and coatings), and energy sources (boilers, turbines, and engines). The attached charts show advancements in these areas over the last 10 years or so. Second, did the health standards create demand for cleaner products? Yes. Over and over again the story has repeated itself. The incentive to reduce emissions by reformulating products and designing cleaner fuels and engines has consistently been driven by the public demand for clean air. Each step along this road was taken with intense debate over cost, technology and timing. Third, would today's clean air progress have been achieved if the health standards had been based on current technology? Hardly. In fact, mix 1970's technology with 1997's population, and the South Coast Air Basin would have air pollution like Mexico or Eastern Europe. The attached chart illustrates the dramatic reduction in emissions seen in a number of basic emission sources. Fourth and final question; are significant technology advances needed for most of the Nation to meet the proposed new standards? No. Although there are real costs associated with cleaner fuels and new equipment, most regions should be able to achieve the standards with the steady step-by-step application and advancement of known technology. [GRAPHIC] [TIFF OMITTED] T6586.141 [GRAPHIC] [TIFF OMITTED] T6586.142 [GRAPHIC] [TIFF OMITTED] T6586.143 Question 3. What type of integrated strategies for PM and ozone has the AQMD developed? Response. Historically, the AQMD has proposed a comprehensive control plan to address all criteria pollutants. Since the 1989 Air Quality Management Plan (AQMP) and throughout its successive revisions (including the recently adopted 1997 AQMP), the AQMD has proposed an integrated strategy to achieve the air quality standards for both PM<INF>10</INF> and ozone (as well as the other criteria pollutants). In designing a comprehensive plan to meet the ozone and PM standards, all feasible and cost-effective control measures are identified, with a focus on measures that reduce precursors of both ozone and PM<INF>10</INF>. For example, in determining the level of VOC vs. NO<INF>X</INF> controls for ozone attainment demonstration, the contribution of NO<INF>X</INF> emissions to the formation of PM<INF>10</INF> and PM<INF>2.5</INF> in the air basin plays a significant role in determining the optimal level of NO<INF>X</INF> controls. This integrated approach leads to the most cost-effective path to clean air for all air quality standards. Control of other PM and its precursors, such as oxides of sulfur, elemental carbon, ammonia, and fugitive dust, are included in the overall control strategy for all criteria pollutants in this region. Tables 7-3 and 7-6 from the 1997 AQMP (see attached) detail the integrated control strategy by measure and targeted pollutant(s). [GRAPHIC] [TIFF OMITTED] T6586.144 [GRAPHIC] [TIFF OMITTED] T6586.145 [GRAPHIC] [TIFF OMITTED] T6586.146 [GRAPHIC] [TIFF OMITTED] T6586.147 [GRAPHIC] [TIFF OMITTED] T6586.148 [GRAPHIC] [TIFF OMITTED] T6586.149 Question 4. Does SCAQMD anticipate having to ban backyard barbecues as part of implementing the new standards? Response. There has never been any plan to ban backyard barbecues. There was, however, a rule adopted 7 years ago that required manufacturers of charcoal lighter fluid to reduce volatile compound emissions by 70 percent. The myth about this rule is almost humorous. All manufacturers had their products reformulated and on the shelves for sale within just a few months. There was never a pause in the joy of backyard barbecuing, or any discernible difference in price or performance. This rule was one of the easiest steps taken to eliminate four tons of pollution from the air on a daily basis. ------ Prepared Statement of Beverly Hartsock, Deputy Director for Policy and Regulatory Development, Texas Natural Resource Conservation Commission Good morning, Chairman Inhofe and members of the Subcommittee on Clean Air, Wetlands, Private Property, and Nuclear Safety of the Committee on Environment and Public Works. My name is Beverly Hartsock. I serve as the head of the Office of Policy and Regulatory Development of the Texas Natural Resource Conservation Commission (TNRCC). I am pleased to be here today to address the issue of implementing the proposed new national ambient air quality standards. As you are probably aware, there have been a significant number of concerns raised including some by former chairs of U.S. Environmental Protection Agency's (EPA) Clean Air Scientific Advisory Committee (CASAC) in their recent testimony before a congressional committee questioning the scientific basis of EPA's proposed new air standards for ozone and particulate matter. The lack of a clear scientific basis for the levels and forms of these proposals was reflected in CASAC's closure letters to EPA on both proposals. Based on this lack of a clear ``bright line'' for either proposal and recent risk analysis information that indicates for some areas (Houston and Los Angeles) the current 1-hour ozone standard is more protective than the proposed 8 hour standard, the TNRCC submitted comments supporting the retention of both the existing ozone and particulate matter standards until the science to support any changes is more definitive. Attached is a letter to Ms. Carol M. Browner, EPA Administrator, from Governor Bush addressing the recent national air quality proposals. Also attached are comments from the TNRCC to EPA on the proposed revisions to the ozone standards and the particulate matter standards. From a State regulator's standpoint, I think it's important to recognize that just adopting a new standard does not result in improving air quality. Programs must be developed to implement a new standard, and that's what my agency is expected to do. Someone must analyze current situations, understand as best possible what is causing problems that are detected, and design new programs to reduce those emissions that are significantly contributing to the problem. Those programs must maximize cost-effectiveness and sustainable development and must be phased in over a timeframe commensurate with minimizing excess cost and disruption. Progress achieved toward meeting the air quality goals established must be carefully monitored and analyzed so that mid-course corrections can be made based on actual results. This is not a unique set of planning activities. Many programs incorporate similar steps. What is unique about air pollution control is the number of emission sources, the chemistry involved in determining cause and effect, and the meteorological variation that is inherent in the earth's weather patterns. Chemical compounds are emitted into the air constantly from both man-made and natural sources. Some are harmless, some can be lethal. Typically, air contaminants are invisible to the naked eye. They evaporate off houses being painted, from car gas tanks being refilled, from inks drying on paper; they come from valves and pumps along piping in chemical plants, from stacks at power plants, from leaves of trees. These are but a few examples of the thousands of activities going on every day that generate air contaminants. To understand how to solve the problem of excess contaminants measured at a monitor site, we must understand not only what is being added to the air and where, but also take into account naturally occurring or background levels that in many areas are routinely 25 percent to 50 percent of the standard. Since we can't readily see the emissions, we must estimate what's happening. We require tests of emissions at large industrial plants, we require production records at small businesses, and we use formulas to guess how much is coming from cars, equipment use, consumer product use, and natural events. As you can imagine, this is an imprecise science at best, but we call it the development of an emissions inventory for an area. Gathering the data and performing necessary cal- culations are extremely time-consuming for businesses as well as State regulatory agencies, but are necessary. The emissions inventory is the basis for estimating how much reduction is needed to solve a problem and which types of activities are candidates for additional controls. But all this assumes that there is a problem that needs to be solved. Let's take a step back and look at how that is decided. Air contaminant monitor stations are dotted around the country. These stations are primarily focused in urban areas so we can know the quality of the air large concentrations of people are breathing. The stations are equipped with several different instruments since it takes different kinds of monitors to detect different kinds of pollutants. Thus, an ozone monitor only monitors for ozone and can't detect fine particulate matter or sulfur dioxide emissions. That requires installation of two additional monitors. The measurements made at these monitors are checked against the levels set by EPA as national standards. If monitored levels are higher than allowed, then the area is designated nonattainment. Nonattainment designation is a formal legal process including State proposals and EPA approval of designated areas. For each nonattainment area, a plan, called a State Implementation Plan, must be developed which identifies and enforceably commits the State to implement new controls on defined sources within established deadlines. Such controls can include vapor recovery at gasoline stations or marine terminals, incineration of process vent gases, use of low solvent inks, vehicle inspection and maintenance, etc. EPA has only set a handful of national standards but one of them has been particularly difficult to attain--ozone. It's a tough standard allowing as little as 4 hours of measurements over the standard in a 3- year period of time. Many of the country's large urban areas, including four in Texas--Houston/Galveston, Dallas/Fort Worth, Beaumont/Port Arthur, and El Paso--have not yet met this standard. The new standard proposed by EPA is even more stringent. In Texas, cities like San Antonio, Austin, Corpus Christi, Longview/Marshall/Tyler, and Victoria would likely be declared nonattainment. Additional monitoring will be needed to determine the size of the new nonattainment areas, the amount of the chemical precursors in the air, and the amount of pollutant being transported into the area from neighboring areas. Planning and control program development for these new areas would also have to begin intensively if we are to meet the kind of time tables and deadlines set by the Clean Air Act and EPA. This effort will be costly and could easily serve to distract us from solving the most serious of our problems--the areas currently identified as nonattainment. It should also be noted that EPA has not proposed any funding to cover the costs. Adoption of standards for new pollutants such as EPA has proposed with the fine particulate matter standard brings with it even greater challenges for State air regulators. As I previously mentioned, each pollutant requires its own kind of monitor. We haven't had any PM<INF>2.5</INF> monitors in the field since the mid-1980's. We're scrambling now to buy and begin operating some monitors, but it will be quite a while before we have the data we'll need to assess our status relative to the proposed new standard. EPA plans to allow States 3 years to install and begin operating all the monitors. This is needed because of the high cost of monitoring--for Texas, we estimate $1.3 million for fiscal year 1998, $1.8 million for fiscal year 1999, and $1.9 million for fiscal year 2000--and to allow equipment manufacturers and monitoring agencies time to prepare for this onslaught of new monitoring. Since more than 1 year of data will be needed to understand annual weather variability and to judge against the 3-year average basis that is the form of the proposed EPA standard, it will be from 3 to 6 years before we have a really good feel for how many areas of the country have air quality that doesn't meet this proposed new national standard. Once we know where additional air quality improvements are needed, we have to understand the causes of the problem. Although there are many similarities among cities, each problem is somewhat unique and solutions will be dependent upon understanding the broad principles of air pollution and the factors unique to that area. One of the main reasons that solving our country's ozone problems has proven so difficult is that ozone is created in the air by a chemical combination of other pollutants. Trying to regulate this giant atmospheric chemistry lab that is occurring over each of our cities is taxing the limits of our scientific understanding. The variables are many and the solutions are complex. We cannot change how fast the wind blows or how much sunlight there is on a given day. Instead, we have to estimate how much emissions can be in the air from all sources--man-made or natural, industrial or personal activities--we have to assume the worst weather conditions--usually for my part of the country that means a series of hot, still days--and assess what emissions can be allowed without triggering enough of the chemical reactions to cause ozone to form at levels over the standard. Complex models have been designed to assist, but it often feels more like art than science when we try to perform these regulatory analyses. This type of analysis is very resource intensive and often frustrating, providing less than definitive answers. And keep in mind, the results of this work are the basis for requiring new control programs that can cost billions of dollars. We can look at the work that has been undertaken by the Ozone Transport Assessment Group (OTAG) as an example of the complexity of understanding ozone formation. OTAG has been studying air pollution transport over the 37 States in the eastern half of the U.S. for the last 2 years. The work has focused on identifying how much of the man- made and natural emissions in one area are blown to another area and how this impacts high ozone levels monitored in the mid-west, northeast and Atlanta. Ozone is formed when volatile organic compounds and oxides of nitrogen react in the presence of sunlight. There are many man-made sources of each of these types of pollutants but naturally occurring sources (primarily trees) are also an important source of organic compounds and contribute significantly to the formation of ozone. The reactions that create ozone also reverse to breakdown ozone that has been formed, so understanding the concentrations of each type of pollutant as it is being blown from one area to another is significant. With the lack of rural monitors in most areas of the country, all these analyses are computer simulated projections based primarily on meteorological data and monitored data from urban areas. Needless to say, the results are open to a lot of debate. Millions of dollars have been spent in the OTAG effort, and only four high ozone episodes have been studied. It is reasonable to estimate that similar investments will be needed to study each of our problem areas. The proposed new fine particle standard will also require significant additional work. Once we know how much fine particulate matter is measured in each of our cities, we'll know if those cities are in attainment of the standard. But this is only the beginning of understanding what to do if they are not in attainment. We will also need to analyze the separate components of the particulate on the filters to know what chemicals are causing the problem. Knowing the chemical constituents of the fine particulate will help us to trace those chemicals back to their sources. This analysis will be crucial to understanding how to solve the problems, but just knowing chemical constituents doesn't completely define the controls needed. It tells you what types of sources are the biggest contributors to the problem. Analysis of possible control options can be targeted to these type sources. This additional chemical analysis of the particulate to determine its components further adds to the costs of the monitoring significantly. Further, these costs will continue beyond the initial startup as long as the particulate monitoring is needed. These monitoring and chemical analysis costs are in effect additional unfunded mandates on the States because EPA has not proposed adequate funding. Analysis must not only be directed at what is likely to be causing the problem but also to what can be changed that would help solve the problem. For example, knowing that organic compounds are naturally emitted by trees helps you to understand more about the atmospheric chemical reactions, but doesn't give you any information on how to solve the ozone problem. However, knowing that organic compounds that evaporate from oil-based paints are a part of the ozone formation process leads you to examine the feasibility for phasing out oil-based paints and replacing these with latex paints. This example also illustrates another part of the control program evaluation. Timing is a key ingredient to establishing a good control program. The phase-out of oil-based paints, if allowed to occur over a number of years and with a limited number of exceptions, can be a smooth transition to a more environmentally friendly and economically sustainable way of life. If done overnight or without necessary flexibility it can put companies out of business and leave citizens unable to satisfy their needs and unhappy with the inefficiency and ineffectiveness of government programs. Traditional controls have focused on large industry; new controls will have to focus more and more on small businesses. We must take all steps possible to minimize the negative effects on our small business community. The need to allow sufficient time to phase in controls is especially important when we look at programs to reduce emissions from the transportation sector--emissions that occur as we move ourselves or our products from place to place. Recently, I had the opportunity to listen to the EPA Office of Mobile Sources summarize their current and planned programs. Included were new car improvements like lower tail pipe emissions, on-board canisters to trap fueling emissions, and on- board diagnostics to alert car owners of system failures that could increase emissions and impair efficient vehicle operation. Also discussed were improved diesel engines for construction and farm equipment, lower emitting locomotive engines, improved small engines for lawn and garden use, and cleaner burning diesel and gasoline fuels. All of these programs, most of which are required under the current Clean Air Act, have been set in place but will require several years for equipment replace- ment to realize actual benefits. In fact, EPA estimated that significant benefits from these programs would not be seen until 2000 and the full benefits not realized until 2020. In order to maximize the use of these programs, we must be mindful to set timeframes for accomplishing our air quality goals that match the time needed to realize the reductions from these long-term programs. Timing is not just critical as it relates to the implementation of controls but also in proper planning. As noted earlier, it will be three to 6 years before we have good data on levels of fine particulate matter. Even for ozone where current data is much more complete, we will need to study rural levels of this pollutant to know what's being transported from one area to another. Analysis of the causes of the problems can be undertaken even as the monitoring data is being gathered. But once control measure options are identified, there must be a public process to decide the most appropriate controls to impose. This type of public process includes meetings and hearings with local planning organizations, citizens, affected businesses, and all levels of elected officials and government. Typically, these public processes take up to 18 months. After the best control options have been selected, time must be allowed for companies to install equipment, cities to make transportation system changes, and new products to be developed. The simplest of such controls can be implemented in 1 year; the more extensive industrial controls require up to 3 years for installation during process turnarounds. As previously discussed, transportation controls and new products can take up to 10 years or more to implement completely. After controls are in place, air must be monitored to see the results of these efforts. Depending on the standard, up to 3 years may be needed to measure the effects of new controls. The planning timeframes provided by the Clean Air Act and traditional EPA guidance documents typically allow only 5 years to accomplish all of the above activities. Our experience shows that 10 years is a more reasonable planning cycle and that the more difficult air pollution. problem areas will take two or more planning cycles. Looking for new ways to do things and learning from our experiences will be particularly important if EPA adopts new or more stringent standards. EPA set up the Federal Clean Air Act Advisory Committee Subcommittee on Ozone, Particulate Matter and Regional Haze Implementation. The charge to this group of almost 80 representatives of business, government, environmental groups, and academia was to develop recommendations to EPA on how to smoothly transition from the current requirements to new approaches. The challenge is to not lose the momentum that we have built as we have made substantial improvements in air quality with existing programs. But, as so many have stated, traditional regulatory programs are unlikely to be able to meet the challenges of new higher standards or even to solve the persistent problems we already have identified. New approaches must be used to harness economic forces to work in concert with regulatory efforts to address environmental protection. New ideas such as identifying areas of violation and areas of influence must be explored rather than just expecting each nonattainment area to solve its own problems in isolation from all else going on around its geographic boundaries. We must also explore ways to provide incentives for areas to expand monitoring, to do early planning, and to implement controls voluntarily before they become required. Current law has clearly outlined negative consequences for failure to plan or implement programs but does little to provide incentives for early or voluntary action. In summary, there are five points regarding implementation of national air quality standards that I would like to leave with you. First, we do not believe that new national standards should be set until there is a firmer scientific basis. The recently released studies of health effects of ozone estimate fewer benefits from the proposed standard than previously thought. The particulate matter studies have raised as many questions as they have provided answers. Additional research is needed to target the cause of the particulate matter impacts on public health. Second, if new standards are adopted, extensive new work will be needed to implement them and it appears likely that there will be little additional funding from EPA. States do not need another unfunded mandate. Third, we should explore ways for air pollution planning to be a part of a city's urban planning whether or not new national standards are adopted that cause the city to be designated nonattainment. New approaches should build on voluntary action programs such as the Flexible Attainment Region approach being used in Tulsa, Longview/Marshall/Tyler, and Corpus Christi. Incentives for early planning, expanded monitoring, and voluntary or early reductions should be provided in EPA guidance and any new statutory revisions. Fourth, adequate time should be provided to allow areas to plan, implement controls, and measure the results of those controls. The 5- year timeframes of Sec. 172 allow for planning and implementation but fail to recognize the need to monitor results and that some areas have inadequate data bases upon which to begin their planning. Longer term planning cycles should include mid-course corrections so that new information is used to improve imprecise predictions of growth and emissions changes that will theoretically occur in the future. Finally, adequate time must be provided to allow major trends such as those happening in the transportation sector to be a significant contributor to attaining national air quality goals. In order for the country to be able to afford all that is likely to be required to meet all of our air quality goals, we must allow time. Allowing time for market forces, technological development, and corporate economic planning will minimize costs of accomplishing the reductions and spread those costs as with other prudent investments in our future. Thank you for the opportunity to present these comments. I would be pleased to respond to any questions you might have or to provide additional information that you would like to assist you in your review of these issues. [GRAPHIC] [TIFF OMITTED] T6586.150 [GRAPHIC] [TIFF OMITTED] T6586.151 [GRAPHIC] [TIFF OMITTED] T6586.152 [GRAPHIC] [TIFF OMITTED] T6586.153 [GRAPHIC] [TIFF OMITTED] T6586.154 [GRAPHIC] [TIFF OMITTED] T6586.155 [GRAPHIC] [TIFF OMITTED] T6586.156 [GRAPHIC] [TIFF OMITTED] T6586.157 [GRAPHIC] [TIFF OMITTED] T6586.158 [GRAPHIC] [TIFF OMITTED] T6586.159 [GRAPHIC] [TIFF OMITTED] T6586.160 [GRAPHIC] [TIFF OMITTED] T6586.161 [GRAPHIC] [TIFF OMITTED] T6586.162 Prepared Statement of Paul Kerkhoven, Director of Environmental Affairs, American Highway Users Alliance Mr. Chairman and members of the subcommittee, thank you for the invitation to appear before you today to present our views on how the U.S. Environmental Protection Agency's (EPA) proposed new ozone and particulate matter standards would impact transportation and specifically the Congestion Mitigation & Air Quality program. I am Paul C. Kerkhoven, Director of Environmental Affairs at the American Highway Users Alliance. The Highway Users represent a broad cross-section of businesses and individuals who depend on safe and efficient highways to transport their families, customers, employees and products. We support the Clean Air Act and the health based scientifically sound standards that are its foundation as well as a strong Federal transportation policy and the prudent investment of scarce highway use taxes in those programs that enhance our economic productivity, improve roadway safety, and contribute to the enviable quality of life that Americans enjoy. I will begin today by noting the significant clean air accomplishments of the transportation community. I will then briefly outline current environmental requirements applicable to transportation programs and offer our perspective on the implementation of the proposed new national ambient air quality standards. I shall finish with some specific comments on the Congestion Mitigation & Air Quality (CMAQ) program. air quality trends The transportation sector has played a major role in attaining the air quality goals realized by areas across the country. Since 1970, population in the U.S. has grown by 28 percent, production of goods and services has doubled, there are 60 percent percent more drivers driving 80 percent more vehicles 116 percent more miles. Yet, carbon monoxide emissions from highway vehicles have been reduced by one third and volatile organic carbon emissions have been cut in half. Even today's cleaner reformulated gasoline for California is so effective it's almost like taking 3.5 million cars of the road--twice as many cars as are registered in Oregon. Today's cars have achieved a 95 percent reduction in tailpipe emissions since the 1960's. As a result, it would take 20 of today's new cars to produce as much tailpipe pollution as only one new car did 30 years ago. Automobile related air pollution is well on its way to being a thing of the past. Those reduced motor vehicle emissions have been a major contributing factor in the air quality improvements realized nationwide. According to EPA data, ambient concentrations of the six major air pollutants have decreased almost 30 percent since 1970. As a result, every major city and urban area is making significant progress toward meeting the National Ambient Air Quality Standards. In fact, if we look at the most recent data only 40 some areas would be in violation of meeting the ozone standard. I expect reduced mobile source emissions to continue contributing to improved air quality well into the next century. Yet, the EPA continues to downplay these results and argues that emissions from automobiles will begin to rise again by the year 2005 because of a projected steady increase in vehicle miles of travel. It should be noted that the agency has been projecting an increase in vehicle emissions since the early 1980's, and notice the results. The EPA therefore advocates strict policies to control the growth of vehicle miles traveled. It does this by enforcing transportation control measures (TCMs) that discourage automobile use and advocating higher funding for the CMAQ program to implement these TCMs. A fundamental individual freedom, the freedom of mobility, is at stake whenever the government proposes to restrict Americans' ability to choose where, when, and how to travel. There may be times when such restrictions are necessary, but those decisions should be made by our elected representatives and not by the subterfuge of a bureaucratic rulemaking procedure. An additional 94 million people living in at least 520 counties will be subject to programs designed to limit the use of their motor vehicles if the proposed new air quality standards are approved. This estimate is based on EPA figures. Estimates by others suggest that the additional number of people affected could be significantly higher than 94 million. Such constraints on motor vehicle use not only restrict personal mobility but they can be a serious obstacle to economic growth and productivity increases. In addition, transportation control measures have proven to be substantially less effective at reducing mobile source emissions than have technological solutions such as cleaner burning fuels and cleaner running cars. By every measure, these technological improvements have also been significantly more cost effective than programs intended to change travel behavior. transportation and air quality The aim of the Clean Air Act is to bring all U.S. areas into compliance with current air quality standards. The Clean Air Act also requires that State and local transportation improvement plans contribute to a reduction in pollutants. ISTEA complements the Clean Air Act by giving increased decisionmaking power to metropolitan planning organizations (MPO's) regarding the expenditure of Federal transportation dollars. ISTEA also gives these communities authority to use Federal highway funds for mass transit, air quality enhancements and other non-highway projects. The Clean Air Act's largest challenge, however, is the requirement that State and regional transportation improvement plans in nonattainment and maintenance areas ``conform'' to State implementation plans. The State implementation plan includes an estimate of emissions from all sources including cars and trucks (mobile sources) and the amount of reductions necessary in each category to meet the standards. If actual vehicle emissions exceed the estimate in the State implementation plan, the transportation plan or the State implementation plan must be modified. If the State fails to modify its transportation plan or State implementation plan appropriately, Federal highway funds will be withheld. This is the ``stick'' that forces State and local officials to craft transportation plans which include the right mix of projects to reduce emissions. proposed standards and transportation The EPA proposed implementation policy which accompanies the new air quality proposal, states that the current conformity determination process will continue until State implementation plans that address the new standard are approved by the EPA. Depending on the standard finally chosen, we believe that at least 520 counties across the Nation could be placed in nonattainment status for at least one of the requirements proposed. We question whether the current model-intensive conformity process will still be meaningful with much larger non-attainment areas. For example, to make a conformity determination in rural areas will be a senseless and cumbersome exercise because in virtually all cases there are few, if any, transportation alternatives. Changing direction in mid-course may significantly delay or run counter to efforts underway to assure reasonable further progress in attaining air quality standards. This will be extremely confusing for State and local officials and the general public. The substantial expansion of non-attainment areas may well require an expansion of the transportation demand models that have experienced budget shortfalls and are still part of the learning curve for local, State and Federal officials involved in traffic data processing. The proposals will likely result in tighter emission budgets and make conformity an even more challenging process. The proposals do not address the cost and effectiveness of the transportation control measures and these may be the most costly elements of further emission reduction efforts. The impact of highway funding sanctions could also affect much larger areas. We do not know if the inability of some areas to develop plans showing that they can attain the standard will lead to more frequent imposition of highway funding sanctions. Does the EPA intend to impose highway funding sanctions on the 8-20 residual nonattainment areas in its partial attainment scenario? Loss of highway funding, ironically, can delay highway projects that improve traffic flow and reduce emissions. Thus, the application of highway funding sanctions by the EPA can exacerbate air pollution problems that the sanctions are intended to help solve. Transportation is a big part of the economic development equation. Highway improvements, including projects to expand capacity and reduce congestion, should be expedited, not burdened with new regulatory hoops. transportation control measures and cmaq Congress established the Congestion Mitigation and Air Quality Improvement Program in ISTEA primarily to help State and local governments meet the cost of implementing the transportation control measures required by the Clean Air Act. CMAQ funds--$1 billion per year apportioned to the States from the Highway Trust Fund--can be used for all but two of the TCMs listed in the Clean Air Act, plus any TCMs included in a State implementation plan approved by the Environmental Protection Agency and any projects approved by both the Federal Highway Administration and the Federal Transit Administration in consultation with the EPA. First and foremost, we oppose setting aside a billion dollars of highway funds each year exclusively to meet costs imposed on State and local governments by the Clean Air Act. Those air quality projects may or may not be a top transportation priority in a given area. By setting aside highway funds exclusively for such projects, Congress places a higher priority on them than on other transportation projects, such as safety improvements or additional highway capacity needed for economic development. We think those decisions should be made by State and local officials who know best what their top local transportation priorities are. A quick review of individual projects funded with CMAQ dollars over the first 4+ years of ISTEA yields some examples that would raise questions about the wise use of highway taxes. To illustrate this point, I picked a few projects financed with CMAQ funds in States across the country. This is not intended to be an inclusive list. I could have added many more. <bullet> $933,000--Purchase 210 bus radios at a total cost of $1,165,920. The Federal (CMAQ) share was $933,000 or $4,442 per radio <bullet> $67,000--Develop a golf cart transportation program <bullet> $5,890,000--Construct an esplanade and ferry pier <bullet> $146,000--Supplement transit fare-box revenues While I am not familiar with any of these individual projects, I don't doubt that they have benefited, and are appreciated by, certain local citizen groups. One wonders, however, how they compare in priority with any of the myriad safety or highway capacity needs faced by State and local officials. We won't ever know the answer to that question because those officials weren't allowed to spend CMAQ dollars on safety or capacity improvements. Again, Mr. Chairman, many of these projects may be a high priority and have a salutary impact on the local economy. Unfortunately, we cannot truly gauge the priority of these or other CMAQ-funded projects relative to traditional road improvements because State and local officials are not allowed to weigh the CMAQ-eligible projects against other local projects to improve mobility or safety. ISTEA doesn't give them a choice. They must either spend or lose their CMAQ funds on the limited array of EPA-approved projects. Mr. Chairman, the Highway Users supports efforts to eliminate the separate CMAQ funding category. Instead of the current CMAQ set-aside, we would make air quality and congestion mitigation projects eligible for funding under a streamlined Surface Transportation Program (STP). We do not support the assertion that State transportation officials will not consider or implement TCM's in their transportation plans if they do not have a specific set-aside for them. It is not the CMAQ program that drives these requirements. The Clean Air Act mandates that State transportation officials give priority consideration to TCM's in their clean air plans, and if attainment goals are not reached, the State faces highway funding sanctions. What greater incentive is there? America's motorists should be able to count on their highway taxes being used for road improvements, and State and local transportation officials should have greater authority to set their own transportation priorities. cmaq and nextea We have several concerns with the CMAQ proposals contained in the Administration's ``National Economic Crossroads Transportation Efficiency Act'' (NEXTEA), recently introduced by Senators Chafee and Moynihan. We do not support the ``Hold Harmless'' provision for CMAQ funding, nor do we support the proposal that when a State submits its new SIP the CMAQ funding increase is triggered. Both provisions expend CMAQ funding at the expense of the more flexible STP account. As an alternative to the set-aside, it seems quite logical for the Congress to repeal CMAQ in its entirety and allow States to utilize any and all funding from the STP program to achieve the Clean Air Act goals. More of the areas that could be facing nonconformity determinations would be able to tailor their transportation programs to meet their specific circumstances. If the Congress chooses to retain a separate CMAQ account, we do support the Administration's proposal to make eligible for CMAQ funding two of the TCMs that show great promise for improving air quality: the reduction of vehicle emission during periods of cold-start conditions, and measures that encourage the owners of pre 1980 model year high- emitting cars and light-duty trucks to voluntarily remove them from the road. These TCMs are listed in the Clean Air Act but were excluded from the list of TCMs made eligible for CMAQ funding in ISTEA. In addition, ``congestion mitigation'' projects should be eligible for any continued CMAQ program. Most projects currently funded with CMAQ dollars are air quality projects. Congestion mitigation projects, such as those that increase the capacity for single occupant vehicles in ozone and CO non attainment areas, are not currently eligible for CMAQ funds. For example, freeway interchanges with insufficient merge lanes or other capacity problems are frequently traffic choke points. Yet, improve- ments to those intersections that would ease the flow of traffic are generally ineligible for CMAQ funding because they create additional capacity for single occupant vehicles. Congress should correct this problem to help alleviate congestion in any renewed CMAQ program. conclusion Mr. Chairman, improving air quality is an important national goal and the transportation sector of our economy certainly has a role to play. Our central points are as follows: current and emerging technologies will ensure the continuing decline of mobile source emissions without the new air quality standards. We should not burden vast areas of the country with new regulatory hoops the proposed standard changes will create. The transportation control measures needed to meet the new standards could cause significant economic hardship and will--echoing comments of the U.S. Department of Transportation--require lifestyle changes by a significant part of the U.S. population. Finally, the Clean Air Act gives transportation officials strong incentives to make air quality projects a top priority. We urge Congress to give those officials a truly flexible Surface Transportation Program account that will allow them to weigh all their local transportation needs, including air quality improvements, when establishing funding priorities. I appreciate the opportunity to have presented the Highway Users' views on the air quality standards proposals and their impact on transportation and the CMAQ program. I would be pleased to answer any questions that you might have. 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IMPACT ON STATE AND LOCAL GOVERNMENTS The subcommittee met, pursuant to recess, at 2 p.m. in room 406, Senate Dirksen Building, Hon. James Inhofe (chairman of the subcommittee) presiding. Present: Senators Inhofe and Sessions. Also present: Senator Baucus. OPENING STATEMENT OF HON. JAMES M. INHOFE, U.S. SENATOR FROM THE STATE OF OKLAHOMA Senator Inhofe. The subcommittee will come to order. I assure you there will be more Members coming in from time to time and staff. There are a couple of meetings that are still taking place and they're there. Today's hearing will be the fifth we've had. We've had four in this subcommittee and one in the whole committee concerning the proposed EPA changes in the national ambient air quality standards for ozone and particulate matter. Throughout the entire process, we've heard allegations through the media, other congressional hearings, and the testimony from witnesses before this subcommittee that the Administration has systematically misrepresented the facts behind their proposal. The EPA has suppressed dissenting views within the Administration. They've placed themselves above the law in regards to Small Business Regulatory Enforcement Fairness Act and unfunded mandates. Certainly we have here in this room on the three panels a lot of people who are concerned about unfunded mandates. As a former mayor, I can assure you I understand your concern. I have conducted these hearings as a forum to discover the truth and to bring to light all of the information behind the proposals. I've not focused on the abuses of the Administration because the underlying science, risk, and impacts of the proposals are the most important issues, and I've tried to avoid being sidetracked. However, at last Thursday's hearing I asked Mary Nichols, the assistant administrator for Air at the EPA, a very simple and di- rect question, whether the EPA's regulatory impact analysis shows that the cost of the ozone proposal outweighs the benefits, and she said no. This is incorrect. We don't have large charts, but we certainly--we've passed these out. I think most people have these. This is what they came up with after they talked about the new standards. And the red line, of course, is the cost line, and the green being the benefits. [The referenced charts follow:] [GRAPHIC] [TIFF OMITTED] T6586.279 [GRAPHIC] [TIFF OMITTED] T6586.280 Senator Inhofe. The EPA's regulatory impact analysis for ozone clearly shows that the costs outweigh the benefits. The cost of local control strategies outweighs the benefits anywhere from $1.1 billion to $6.2 billion. That's the range that we're looking at here, depending upon the exceedances allowed. The cost for regional control strategies, which may not be feasible under the current law, outweigh the benefits anywhere from 0 to 2.4. This is the chart that shows that range. These figures come straight from the EPA's document, and the costs are only for partial attainment. Under their cost estimates, the country does not even attain the proposed standards. Elsewhere in the documents they acknowledge a number of costs that they don't even calculate, and they make a number of assumptions, such as, first, they assume in the baseline full implementation of the current law, without counting these costs but counting the benefits. In other words, those of you who have had to work hard, such as we have in our county of Tulsa, those costs that we have incurred to come up to the old standards are not included in the total cost, but the benefits are. Second, they assume a regional NAAQS strategy for the country which includes an emissions cap for utilities without including those costs. I think we know, in fact, the first-- before even having the first hearing, as chairman of this committee, when I heard about the proposed changes I went around to 21 counties in Oklahoma, and it was then that we found out what the costs were, increased cost of utilities. These increase costs are not considered even in these charts here. Third, they assume a national low emissions vehicle without counting the cost for such a program. I think those of you from California know what we're talking about there because you've already had that mandate. And, fourth, in a number of areas they stopped calculating the cost at 75 percent attainment. I mean, areas that are really bad, they assume that once you get the 75 percent there's no further cost. Even without adding up these hidden costs, the EPA's documents still show the costs outweigh the benefits; yet, an assistant administrator from the EPA sat in this room last week and told me and the witnesses the exact opposite on the record. They are trying to mislead the committee and they are misleading the American people. In addition, since these figures were published, the Agency has gone back and readjusted the benefits, decreasing all of the end points by 25 percent. So while the original costs outweighed the benefits, the current numbers outweigh the benefits even more than they were before. As a final insult to the process, the President's own Council on Economic Advisors has estimated the cost for ozone proposal at $60 billion, 10 times greater than the EPA's cost estimate of $6 billion. It's time for the EPA to level with the public. Public policy decisions should be conducted in an open and unbiased manner. The EPA has hidden behind the court order and data that is not available to the public. In addition, they have hidden the real costs and dissenting viewpoints of other Government agencies. Hopefully today we can turn to the important issues regarding the impact of these proposals. We have a very full hearing of some 14 witnesses, and that will be on three panels, so we're going to be somewhat restrictive in our timing. I have a statement for the record submitted by Senator Hutchinson. [The prepared statement of Senator Hutchinson follows:] Prepared Statement of Hon. Tim Hutchinson, U.S. Senator from the State of Arkansas Thank you, Mr. Chairman. Once again, I am grateful that you have seen fit to continue these hearings on the EPA's proposal to implement more stringent clean air standards for ozone and particulates. Since the hearings began a couple months ago, we have had the opportunity to hear testimony where both sides of this complicated issue have been presented. When we began, I never expected this would be so complex and that there would be so many opinions, especially among the members of the President's Clean Air Scientific Advisory Committee. While I have come to expect politicians to disagree, I did not expect such disagreement among the scientists. I am also somewhat surprised that there is so much opposition to the plan from within the administration. There is opposition from the President's Council on Economic Advisers, the Office of Science and Technology Policy, the Department of Transportation, the Department of Commerce, the Small Business Administration, the Department of Agriculture and the Department of Treasury. These comments must be seriously analyzed and addressed before the rule is promulgated. According to a Monday, April 21 story in the Los Angeles Times, one of these documents even suggested that if implemented, ``the proposal could bring California's economic recovery to a grinding halt.'' In Arkansas, we could face a similar fate. Recently, Arkansas has begun to see strong economic growth, especially in the Northeastern and Northwestern part of the State, yet investment may slow dramatically, even drop off completely, if these areas of growth fall out of attainment. In the reauthorization of ISTEA, Arkansas may see a tremendous increase in access to transportation, as we work on proposals for construction on the I-69 International Trade Corridor (or interstate?). Yet, since the implementation of these standards could threaten highway funding, the timely completion of I-69 or other highways in Arkansas may be in jeopardy. This week, the Arkansas State Chamber of Commerce was in town to meet with the congressional delegation and other national leaders. The issue that is overwhelmingly the most important to these leaders is the completion of I-69. Considering the scientific weaknesses surrounding these standards, the disagreements within the Clinton Administration and the opposition from so many of my constituents and State leaders, I am not comfortable sacrificing any funding for one of the most important economic facilitators in the history of Arkansas. Mr. Chairman, today, State Representative Scott Ferguson of West Memphis, Arkansas was supposed to testify before our committee regarding his opposition to the proposed standards. Unfortunately, because of family and business considerations, Representative Ferguson could not be with us. I would like to read a few of the excerpts from his testimony and have the entire testimony placed in the record. I feel it is important to note that Representative Ferguson is a Medical Doctor and is a member of the Public Health, Welfare, and Labor Committee in the Arkansas House of Representatives. Dr. Ferguson cosponsored a resolution in the Arkansas House, which was passed along with a companion resolution in the State Senate, stating that the EPA should retain the current standard for ozone and retain the current standard for PM<INF>10</INF>, until more research can be done on PM<INF>2.5</INF>. I would like these two resolutions to also be placed in the record. Dr. Ferguson goes on to say, ``As a medical professional and an elected official, it concerns me that policymakers want to move forward with these standards prior to a complete analysis of these issues.'' Mr. Chairman, I know there are other doctors on the panels today who will be testifying, but I hope Dr. Ferguson's testimony will also be seriously considered as we proceed today and through the next few months. I thank the Chairman again for calling this hearing. [GRAPHIC] [TIFF OMITTED] T6586.281 [GRAPHIC] [TIFF OMITTED] T6586.282 [GRAPHIC] [TIFF OMITTED] T6586.283 [GRAPHIC] [TIFF OMITTED] T6586.284 [GRAPHIC] [TIFF OMITTED] T6586.285 Senator Inhofe. I would now ask for the first panel of witnesses to be seated at the witness table. The way we've divided up the panels today is to start with the witnesses from State and local governments. The second panel and third panels will consist of other interested parties. While they're coming forward taking their chairs, I'd like to give you an overview of how we'll proceed during this public hearing. We have 14 witnesses who will be testifying today. As I also mentioned to you, some other members of the subcommittee couldn't be here today. Some of their staff is, and some will be coming in later on. Each witness will be given 5 minutes to give his or her opening statement. Your entire statement is already submitted for the record, and I appreciate the fact that you have already done that. We will use these little lights up here that we normally don't adhere to at all that closely, but since we have so many witnesses today we will. I think we all know what red, yellow, and green mean. Following each of the 5-minute comments by the witnesses, we'll ask each member of the subcommittee to ask questions and we'll have a round of questions and answers. The first panel will be: The Honorable Mayor Emma Hull, mayor of Benton Harbor, Michigan; The Honorable Richard Homrighausen, mayor of--you know, I always thought in politics it's easier to have an easier name. It hasn't worked out too well, of course--mayor of Dover, OH; The Honorable Leon G. Billings, delegate, Maryland General Assembly; The Honorable Richard L. Russman, New Hampshire State Senate; and from my home town, The Honorable John Selph, Tulsa County Commissioner, Tulsa, OK. With that we'll go ahead and start with Mayor Hull. STATEMENT OF HON. EMMA JEAN HULL, MAYOR OF BENTON HARBOR, MI Mayor Hull. Thank you, Mr. Chairman and members of the committee. My name is Emma Jean Hull, mayor of Benton Harbor, MI, and a member of the National Conference of Black Mayors' Standing Committee on Environmental Justice. Benton Harbor is located on the shores of Lake Michigan just an hour east of Chicago, IL, and 45 minutes from Gary, IN. It is a minority/majority community with a population of 12,818, 97 percent African-American, 40 percent under the age of 18. Benton Harbor, through a local partnership with businesses and industries, is just beginning to address some of the Nation's highest at-risk factors in crime, unemployment, and school dropouts. Our success to date relies on local initiatives to retain, attract, and grow small businesses, address work force development, and deal with environmental concerns--mostly related to our brownfields redevelopment projects. In the late 1970's and early 1980's, Benton Harbor saw the loss of over 3,000 manufacturing jobs, with major plants closing in the steel appliance and automotive industries. The remaining empty, deteriorating, and in some instances contaminated buildings formed both the core of our environmental problems and Benton Harbor's redevelopment potential. With passage of the 1990 Clean Air Act and the establishment of that year as a baseline for attainment, my city was put at an immediate and distinct disadvantage. In the late 1980's and early 1990's, Benton Harbor was at its lowest point in its history for industry activity. This artificial low standard for air quality applied nationally without regard to local circumstances is magnified by a proximity to both Chicago and Gary and the prevailing westerly wind--a fact that impacts the expansion of existing businesses and inhibits the location of new businesses in Benton Harbor, as well. Benton Harbor was one of only 11 communities chosen by Governor Engler for a new innovative project called ``Renaissance Zone Designation.'' At the hall mark of our application was a program to redevelop the old brownfield sites that used to be the home of thousands upon thousands of steel and heavy manufacturing employment. The loss of these jobs has crippled the economy of Benton Harbor, and the redevelopment of these acres will not only improve the quality of life for all of our residents, but greatly enhance the environment through a long-term redevelopment strategy. The local community and the State government have agreed to give up all taxes on any development on this property for 10 years. That's right--no property tax, no income tax, no utility tax, no State or local taxes of any kind if these brownfield sites are redeveloped. Located adjacent to Lake Michigan, the redevelopment of these sites is crucial to bring about an harmonious balance between environmental protection, economic activity, and improved quality of life for our citizens. This innovative piece of legislation has been highlighted in such publications as ``The Wall Street Journal,'' ``The New York Times,'' and, as a result, the number of businesses seriously considering location in our community is at its highest level. The proposed most stringent ozone standards and new PM standards for particulate matter emissions, if implemented, will directly impact on my community's effort toward sustainable economic growth and development. The Renaissance Zone is just one example of how the local government has cooperated with the business leaders and State legislators in creating a long-term visionary plan for redeveloping our community. The change in the air emission standards will only undermine this bold and innovative approach to economic development. Furthermore, these new restrictions take away opportunities from the people who need it most. They are not responsible for the air emission coming from Chicago and other areas across Lake Michigan, nor are they responsible for the time chosen to be the baseline for the Clean Air Act when we, as a community, have fallen on our worse times ever. These new proposed standards would unfairly harm a special group of individuals. The small businesses affected, many for the first time, like printers, bakers, service station operators, and construction firms--are the foundation of the growing ranks of Benton Harbor's minority entrepreneurs. The anticipated high production and operation costs required by the proposed standards, coupled with the regulatory burdens, can restrict these businesses' expansion, impact their capital expenditures, and eventually affect the jobs of many of our community residents. This problem is only magnified when applied to the new larger businesses. The ability to attract new, major business and industry to brownfield sites is difficult. Benton Harbor and the Nation does not need any additional impediments. Mr. Chairman, many of the old industry sites of Benton Harbor are examples of the shift which will occur as part of our new proposed air emission standards. Businesses and heavy manufacturing left our area to find new greenfield sites. Undermining the efforts being made by our community to start new businesses and attract new industry to redevelop brownfield sites will all be undermined by the new proposed air emissions standards. Those new investments and job opportunities so desperately needed in our community will not occur. Rather, they will occur at other greenfield locations throughout the country that are not unfairly being impacted by the air emission standards. It is perhaps the cruelest irony of all that Benton Harbor made a name for itself as a community of thriving manufacturing base, only to lose the opportunity to regain its reputation because of the air that emits from Chicago and from our having had such low artificial standards imposed upon our community. Partnership is a requirement of change, and that partnership must include the Federal Government, local community, and the business community, and policymakers at the State level working together. I propose to you that the initiative underway in Benton Harbor will improve the economy, as I come to a close, but also drastically enhance the environmental surroundings of our area. Brownfield redevelopment is desperately needed in our area, as it is across the country. Changing our standards will only undermine many of those far-reaching initiatives, and you policymakers must balance what is in the best interest of all parties concerned. I propose to you that an intelligent true partnership that involves all of us in the way to protect the environment while also changing the social fabric of the community, like Benton Harbor--please consider the impact the proposed changes will have on the local partnership my community so desperately needs. Thank you for this opportunity to address this matter today. Senator Inhofe. Thank you, Mayor Hull. Unfortunately, there is a vote taking place right now. Mayor Homrighausen, if you would proceed, I will run and vote and come back. I have read your testimony very carefully. Having been a mayor, I wanted to see what other mayors were thinking in some of the problems. So if you'd go ahead and give your testimony, I will be right back and we'll have that in the record. [The chairman vacated the chair.] STATEMENT OF HON. RICHARD P. HOMRIGHAUSEN, MAYOR OF DOVER, OH Mayor Homrighausen. Good afternoon. My name is Richard P. Homrighausen, and I am mayor of the city of Dover, OH. I appreciate the opportunity to testify before you this afternoon on EPA environmental proposed rules of increasing the stringency of the air quality standards for ozone and particulate matter. In my comments I hope to convey to you the perspective of one middle America community on the potential impact of EPA's proposed rules. In addition, I will represent the perspective of the city of Dover Electric System, a small, municipally-owned utility that will likely be seriously impacted by EPA's rules. Finally, I am here today representing the city of Dover's utility trade association, the Ohio Municipal Electric Association, which represents 79 public power systems in Ohio, all of whom are concerned about the potential impact of EPA's rules on these small, community-owned business entities. Cities like Dover and public power systems like the Dover Electric System are significantly concerned about the negative impact that EPA's proposed ozone and particulate matter rules could have on local governments and public utilities. The EPA has proposed air standards which it acknowledges will not be achievable for many communities and which will have a drastically disproportionate impact on small utility systems and the communities which we serve. These disproportionate costs and impacts that may be imposed upon small entities have not been adequately addressed by the EPA, which compounds the inadequate science and health data on which EPA has based its drastic new standards. So I hope that I can convey today that these disproportionate impacts the rules may have on small communities and business entities will be ultimately placed on the citizens and consumers served by cities like Dover and public power systems like those represented by OMEA. Therefore, the city of Dover and the Ohio Municipal Electric Association call upon Congress to ensure that, first, the EPA performs a full assessment of the potential costs and impacts of the proposed ozone and PM rules on small business entities and local governments, including public power entities, prior to the finalization of the standards and their implementation. Second, Congress should require that EPA devises a plan to ensure no disproportionate impact from its ozone and PM rules on small communities and public power entities. Third, Congress should ensure that EPA devises an implementation plan for any new standards that provides the technical assistance and regulatory flexibility to small public power plants that will be necessary for these systems to comply with any burdensome new regulations. And, fourth, the Congress should statutorily exempt small utility units--that is, utility units that have 25 megawatts of capacity or less--from additional regulatory requirements, just as the Congress exempted small utility units from the title four control require- ments for the acid rain program under the Clean Air Act amendments of 1990. I'd like to give you a brief background on Dover's Electric System and public power in Ohio so that you can understand the context in which EPA's rules will apply. The city of Dover, located in Tuscarawas County in the northeastern portion of Ohio, has a population of 13,000. Local employment is supported by 55 diversified industries county- wide. This includes the city of Dover Electric System, which serves 6,185 customers and consists of a coal-and gas-fired electric generation plant, an electric distribution system, and electric transmission interconnections. The Dover Electric Power Plant has instituted substantial environmental control measures in recent years, including an electrostatic precipitator and natural gas co-firing burners to reduce particulate emissions. I might add that the natural gas co-firing burners were the first of this new technology to be installed in an electric utility in the United States. The city's electric system plays a vital role in the competitive sale of power to Ohio customers, supplying relatively low-cost energy to our customers. Public power systems in the United States which are community owned, locally controlled, and not-for-profit serve one in seven Americans, or 35 million people, and collectively possess $77 billion in investment in all types of generating capacity. Public power is inherently accountable to communities and their citizens because they are owned and governed by these communities. That is why public power stands for the development of a viable competitive wholesale electric market, improved environmental quality, and the protection of the public interest against market power abuses. Public power is disproportionately burdened by regulatory requirements like EPA's proposed rules. Public power utility generators like Dover's tend to be smaller and older than investor-owned systems and units. These smaller public utilities often suffer from dis-economies of scale and bear particular burdens from technology-forced requirements which would probably result from EPA's proposed rules. A number of adverse impacts could result for communities and public utilities from EPA's rules, including: communities, including Dover, would likely be thrown into ozone and PM nonattainment by the proposed EPA rules. As you know, nonattainment status can lead to burdensome regulatory requirements, as well as discourage the economic development and revitalization of our cities, as Mayor Hull previously mentioned. That only pushes businesses that wish to avoid nonattainment requirements into our Nation's green spaces. Electric utilities like Dover's may be subject to stringent technology forced requirements, such as selective catalytic reduction technology. Expensive SCR technology would be a particular hardship to small utility units like Dover's 15 megawatt unit because the costs of the requirements cannot be spread over a large customer base, thus poten- tially making power from small units uncompetitive on the eve of electric industry restructuring. In addition, the EPA's regulatory impact analysis for the proposed ozone and PM rules acknowledge that the rules could have a drastically disproportionate impact on small business entities like Dover's small utility system. As in my written comments, the EPA has estimated that the negative economic impact on EPA's proposed ozone rule will be three times greater on small utility units than it will be on all utility units. Likewise, EPA has estimated that its proposed PM rule will cause a significant economic impact on twice as many small entities when compared to all business entities. So it appears that EPA's proposed rules could well lead to substantial burdens on small public power systems that could result in the shutdown of these plants on the eve of electric deregulation, a resulting loss of jobs, or, at the least, a substantial increase to the electric bills to the citizens, businesses, and other consumers served by cities like Dover. For these reasons, the city of Dover and the Ohio Municipal Electric Association call upon the Congress and the EPA to assess the potential impacts of these proposed rules on communities and small businesses prior to their implementation and to ensure that no disproportionate burden is placed upon the citizens and consumers which we serve. Thank you. STATEMENT OF HON. RICHARD L. RUSSMAN, NEW HAMPSHIRE STATE SENATE Mr. Russman. Thank you, Mr. Chairman and members of the staff and committee. [Laughter.] Mr. Russman. I appreciate your being here. I guess as a Republican I can start with a quote of the day, if you will, from Senator John McCain at the fifth annual Green Bow, which he said, ``When Republicans introduce bills to abolish the Clean Air amendment or dismiss valid environmental concerns as the ravings of partisan extremists, we give credence to our critics who question whether Republicans share the environmental values of the majority.'' I have to tell you, coming from New Hampshire, that we think that the EPA proposals would be great. As a beginning, I will tell you that if the proposed rule is finalized, approximately 15,000 lives will be saved annually. Now, if you just think about that for a moment, that seems like an awful lot of people to me. That's a city the size of our capital city of Concord, which is substantial. I think, however, wherever you come from, that's an awful lot of people. I wonder if, on the chart that the chairman showed earlier, that perhaps those deaths could be shown in black as opposed to red or green, and I wonder where they would stand on that chart that was shown. To me it seems that the support for measures such as this that would save so many lives should be a no-brainer. EPA's rule should be promulgated. I think the EPA should absolutely resist pressure to issue a weakened national ambient air quality standard. Many of the proposed rule detractors would delay for 5 years while we wait for more research. Can you imagine? If you multiply that out, that's 75,000 potential deaths in the next 5 years. And even if it's only 50,000 or 25,000, think about that. The elderly population is a population that is particularly stricken, and I'm sure that they would be interested to know their quality standards and seeing that they are implemented. We often say, when we advocate delay, that too often justice delayed is justice denied. As far as New Hampshire is concerned, our Department of Environmental Services is squarely on board in support of the standards. Our New Hampshire business community, Business and Industry Association, is squarely supporting the standards. And I, as chairman of the Senate Environment Committee for the State of New Hampshire, am here to support the standards. And I must tell you that many of the other States in the northeast support the standards, as well. Let's face it, the Federal Government must set standards and the national government is in the perfect position to do so. Uniform minimum Federal standards must remain the cornerstone of our system of national environmental protection. State citizens are particularly dependent upon that in terms of protection of their health to address the interstate migration and the effects of pollution. Uniform minimal national standards are especially vital in areas of air pollution. Air pollution does simply not respect State boundaries. Federal health-based standards that provide minimum uniform protection for all of our citizens is a perfect State/Federal model that works and should be defended from any change. Now, the EPA has set health-based air standards and the States devise approaches and strategies for obtaining those compliances with the standards. The EPA prescribes the ends, and we'll take the responsibility to devise the means and how to get there. This Federal/State partnership allows EPA to establish safeguards that no State could accomplish alone and allows States to tailor implementation burdens in a way that best suits the interests of that particular State. Air standards provide a model for environmental federalism and must not be changed. State citizens receive uniform national protection with locally tailored and sensitive State solutions, and we welcome that opportunity, certainly, in the next component. Let's look at regional equity for a moment. In the northeast, in particular, we will benefit immensely from these particular standards. The ozone transport assessment group modeling demonstrates that ground-level smog, ozone, is transported great distances. Current science also indicates that particulate matter 2.5 fine particles also travel long distances because they stay airborne for so long due to their tiny size. Therefore, to the extent these standards will induce our neighbors in the midwest to act responsibly and curtail their pollution of our citizens' air, then these standards must be applauded and should be applauded. As we know from our experience with acid rain, our neighboring States in the midwest and elsewhere would not do their fair share unless mandated by the Federal Government to do so. I think that everybody else in this country would share the same view that people would all want to breathe clean air, and I doubt that there is anybody out there, when asked, that would say that they don't care to breathe clean air, and I suspect that if it was suggested that air be brought in here today for us to breathe for the duration of the afternoon, we probably wouldn't want to stick around. The National Caucus of Environmental Legislatures--you'll receive a copy of this, Mr. Chairman, along with other members of the committee. It has been signed by members of that caucus from across the country; not just the northeast, but a number of other States, including people from the midwestern section of this country. In closing, I would urge this committee to help and not be a hindrance in the EPA's attempt to avoid 15,000 unnecessary and avoidable deaths a year. For those in Congress who advocate a 5-year delay, remember the price is possibly 75,000 unnecessary deaths. Let us not forget that many of those unavoidable deaths will occur among the elderly. For those who worry about their State's ability to implement the new standard, trust us. We have been in the business of pollution control as long as Congress, and we have learned a thing or two along the way, and the States, I can assure you, can handle it. Thank you very much. Senator Inhofe [resuming the chair]. Thank you, Senator Russman. Mr. Billings, you will be next. But, before you begin, we have been joined by Senator Jeff Sessions from Alabama. Senator Sessions, this is a panel of State and local--we have two mayors, State legislators, and, from the great city of Tulsa, OK, our county commissioner. Would you like to make an opening statement? OPENING STATEMENT OF HON. JEFF SESSIONS, U.S. SENATOR FROM THE STATE OF ALABAMA Senator Sessions. Mr. Chairman, I would like to say a few things. Senator Inhofe. Yes. Senator Sessions. I want to thank you for calling these hearings. We did have an outstanding hearing in Oklahoma. Protecting the health of our citizens and maintaining quality air for our people to breathe is important. The thing that's troubling to me is about whether or not these proposed increased standards that are proposed by EPA, whether or not they, in fact, will make the health of our citizens better. It's not just the big businesses and those experienced in working with EPA regulations such as local officials who deal with that regularly who will be forced to make changes if the proposed standards are finalized; it's the farmer whose work might have to stop when ozone or dust levels rise to high. It could be a critical time in his harvest or planting. It's the struggling worker who drives an old car that may now not meet the standards, and even repairing it may not be worth the cost of the automobile. It's the small business owner who may have to purchase costly emissions control equipment at the cost of not employing other people or expanding his business. There is no one in public office who can be in local and county and city and State governments who is not committed to improving the air quality and the health of their communities. I know that. But it is remarkable that we have such a universal concern by those local government officials who will be implementing this. Their opinions, I think, are also based on their honest view of what the science is, and they are committed to improving the quality of the air. So I am interested in hearing more from this panel. Senator Inhofe, I appreciate very much your leadership in raising this issue to the public's attention, because we do not need to make a mistake as we go forward. Senator Inhofe. Thank you, Senator Sessions. I also appreciate the fact that you came out to Oklahoma for our field hearing, which was very, very well attended. We had several hundred people there. Now, Mr. Billings, a delegate from the Maryland General Assembly. Mr. Billings. STATEMENT OF HON. LEON G. BILLINGS, DELEGATE, MARYLAND GENERAL ASSEMBLY Mr. Billings. Thank you, Senator. My name is Leon Billings. I represent the Kensington-Chevy Chase-Wheaton area of Maryland. I think I bring a unique perspective to the hearings as a State legislator and because I spent 12 years as staff director of this subcommittee when Senator Muskie was its chairman. My constituents are very strongly committed to environmental protection. They care about the quality of the air they breathe. They also care deeply about the Chesapeake Bay. Both would benefit from these new standards. Many businesses in Maryland believe that they are being required to make extra investments to control pollution because large industrial sources and power plants in other States are doing too little to control their emissions. They argue against further reductions in emissions in Maryland until something is done about big polluters to our west and south. Thus, for the people of Maryland, these new standards have two important benefits: they will provide additional health protection for our citizens and for the Bay, and they could reduce the burden on Maryland businesses by more fairly allocating the responsibility for cleanup to the large sources in other States. Mr. Chairman, in the 12 years I served this subcommittee, virtually every single environmental proposal we recommended to the Senate was met with the charge that it was too expensive. The rhetoric in today's debate is much the same. What is new is the 271 peer-reviewed air pollution health studies EPA evaluated prior to proposing the new standards. What is new is there is so much science to support standards. When the first air quality information was published, there was a crescendo of criticism regarding the adequacy of that data. Compared to today's information base, those critics were on sound ground. Prior to 1970, ambient air quality standards were adopted by localities based on citizen input, local perceptions, and the threat of air pollution. That process proved unacceptable to industry because the standards adopted were often more strict than indicated by federally published data. In 1970, the Nixon administration proposed and Congress adopted national ambient air quality standards. The decision to adopt national standards was widely advocated by the Nation's major polluters. They wanted to use Government science as the basis for air quality standards. They wanted EPA to adopt air quality standards. They wanted to avoid proliferation of differing air quality standards. They wanted those standards adopted in 90 days after enactment of the 1970 Clean Air Act. I would hope this committee would tell them, the National Association of Manufacturers, the Citizens for a Sound Economy, and their allies in the anticlean air band wagon to quit trying to change the rules they helped make. Their opportunity to affect the cost of achieving these standards will come in the implementation phase. We are currently in the information phase. The American people have a right to know the levels of air pollution which affect their health. Congress has never compromised this right to know. Congress on two occasions has provided more time to implement health- based standards--in 1977 up to 10 years more, in 1990 up to 20 years more--but Congress has never bowed to pressure to compromise science. To do so would make a process of public health protection political rather than scientific. The appropriate focus for this committee and the Congress will be to assure a balanced and timely implementation of the standards, recognizing economic needs of industry and the need of millions of vulnerable Americans for protection from the impact of smog. Congress has been doing that job for 30 years. We have proved that we can have a healthy and growing economy while moderating the health impact of pollution, and we have done so without compromising the public's right to know what healthy air is. Thank you. Senator Inhofe. Thank you, Mr. Billings. Commissioner Selph. STATEMENT OF HON. JOHN SELPH, TULSA COUNTY COMMISSIONER, OKLAHOMA Mr. Selph. Thank you, Mr. Chairman. Mr. Chairman and members of the committee, my name is John Selph. I'm a member of the board of directors of the National Association of Regional Councils, and I chair their Air Quality Task Force. I'm also chairman-elect of the Indian Nations Council of Governments, which is the planning organization for the Tulsa area, and I chair their Air Quality Committee, as well. On behalf of NARC, I appreciate your invitation to testify before the subcommittee regarding the proposed changes. The National Association of Regional Councils represents some 300-plus councils of governments, consisting of cities, towns, and counties in metro and rural areas across the United States. These regions run the gamut from nonattainment areas to areas that have always been in attainment. My comments reflect the policy positions developed by NARC. They also draw upon my experience as a county commissioner in Tulsa, OK, and my academic background, which includes a master's degree in public health with an emphasis on environmental science. Before I talk about EPA's proposed standards, let me tell you a little bit about Tulsa and our experience with air quality. Tulsa County was a nonattainment area, as you know, Senator, until 1990. We've worked very hard to achieve attainment status, and our county did achieve attainment status prior to the Clean Air Act signing in November 1990. It was important for us to avoid the stigma associated with being on the EPA's ``Dirty Air List,'' especially for economic development purposes. Since that time we've worked even harder to maintain our clean air status, and while our efforts have been wide-ranging, perhaps most notable was the creation of a nationally recognized ozone alert program, which is really the Nation's first voluntary episodic emissions control program. This program reflects our philosophy of seeking voluntary, common-sense measures that are most effective in improving air quality, rather than the command and control approach too often used by State and Federal regulators. Let me say that both NARC and I, along with everyone else on this panel, recognize the importance of improving air quality, and we support actions to maintain and improve the health of all citizens when such actions are based on sound scientific principles. In light of this we are especially concerned about the conflicting opinions of the scientific community regarding the scientific basis for establishing new ozone and PM standards. There appears to be no scientific consensus that changing the standards at this time will result in significant public health benefits. Indeed, the recently revised EPA exposure and risk assessment findings underscore this lack of consensus. We believe that considerable additional research including epidemiological studies are necessary before new ozone and PM standards are promulgated. Specifically, future epidemiologic studies should focus on the interaction between different pollutants and whether these effects are additive, synergistic, or antagonistic. The Clean Air Act has had a positive impact on reducing pollutants, thus improving air quality for all Americans. If EPA imposes its proposed ozone standards, the number of nonattainment areas in the Nation will increase dramatically, perhaps a threefold increase, according to EPA's estimates. Assigning these areas as nonattainment does not necessarily equate to improving air quality within the regions. In fact, these existing nonattainment regions are having great difficulty in achieving the current standards, so forcing a mid-course change at this time will only delay and disrupt both public and private initiatives designed to achieve the objectives of the Clean Air Act. Furthermore, we are not convinced that the technology is in place, or worse, even close at hand to help meet these proposed standards. With regard to the proposed PM<INF>2.5</INF> standards, we believe that EPA lacks sufficient scientific evidence to justify revising the existing PM standard. Although the scientific evidence does, indeed, suggest some preliminary correlation of health effects, it seems to be inconclusive. Adding onto this is the lack of a monitoring system for PM<INF>2.5</INF>, which further supports our concerns about adding this standard. Our experience in Tulsa has shown us that the goal of improving air quality is both worthy and attainable if approached in a common-sense manner. In addition to our ozone alert program, by formal agreement with the EPA and a host of local and Federal partners we have become the Nation's first flexible attainment region. This FAR agreement, as it is called, enables us to implement a locally crafted strategy to reduce emissions and gives us adequate time to evaluate the results before having to implement more stringent measures to meet our goals. This avoids the one-size- fits-all command and control approach. When we are allowed to develop our own programs and local buy-in is assured, the willingness to commit the necessary financial and political capital to achieve results is much more readily accepted. In conclusion, we believe that the potential impact is great and we must have more certainty and consensus before a major change such as this is initiated. Progress is being made in improving air quality, and more will come if common sense and flexibility prevail. I appreciate being invited to participate in the subcommittee's hearings. On behalf of NARC, we look forward to working with the committee in your important task. Senator Inhofe. Thank you very much, Commissioner Selph. I appreciate very much your being here and the work you've done in our home town. Mayor Hull, I appreciate very much your appearing here today. As a former mayor, as I mentioned before, I understand some of the problems that local officials are having to go through to try to achieve these changes in standards. As I understand it, you're out of attainment under the current standards; is that right? Mayor Hull. Yes. Senator Inhofe. What all have--what additional things can you do, as mayor of your city, and working as you said you have been doing with the private sector and with the various levels and other political subdivisions? You outlined some of the things that you have done. You're still out of attainment. Now we come along and lower these standards or raise the standards. What more can you do? Have you thought about that? Mayor Hull. As I looked at the new act, Clean Air Act, I thought what impact it would have on our community as we are struggling right now to redevelop our community, to partnership, as I said in my statement, with the public sector, with the private sector to make a difference in getting jobs in our community. Our county is 5 percent unemployment, and in our city we have 30 percent unemployment. What we are doing now, we are trying to--with the brownfield we have a lot of old service stations and sites that cannot be developed because we have the burden of the underground storage tanks that need to be removed that we do not have the finances to remove, and so we are seeking grants. With the Renaissance Zone, where they won't have to pay taxes, we are hoping businesses will come in and redevelop these sites to provide job opportunities. While, of course, I am committed to the health of our local citizens to have it better, there has been no scientific data to date to say that lowering the standards will make the health of our citizens better. Senator Inhofe. Putting it in context with other problems that your city faces--crime and all this--would you say this is the greatest health hazard to your city? Mayor Hull. Yes. Senator Inhofe. I mean, would you say that your air--the status right now of your ambient air in your city---- Mayor Hull. No, no. It is not the greatest health hazard in our city at this time. Senator Inhofe. I see. Mayor Hull. As a matter of fact, we need jobs. We have high, high rate of black-on-black crime because of the fact that we do not have economic development. They are not working. We have a high school dropout rate. There are some jobs to go to. We need skills so that we can produce jobs in our community. We need economic development. If this standard was passed, if these acts were passed, it would totally wipe out our community as far as economic development is concerned. Senator Inhofe. All right. And would you consider--this just needs to be a yes or no question--these changes to be an unfunded mandate? Mayor Hull. Yes. I was working with the Michigan Municipal League, and I was working with the act to stop the unfunded mandates. Senator Inhofe. OK. Mayor Hull. Because we as a community cannot afford unfunded mandates, and if this was implemented we would have to fund this, and that's a mandate that we cannot fund. Senator Inhofe. Thank you very much. Mayor Homrighausen, in your testimony you cover the additional cost to ratepayers in your city if the proposals go final. I noticed the percentage increase to consumers is approximately 25 percent because the cost to small utilities would be three times greater than large utilities. I don't see how you can stay in business. And I'd ask the same question. Do you consider this to be an unfunded mandate? Mayor Homrighausen. Absolutely. Absolutely. That was the point I was trying to make today. Small public power entities, of which Dover is one, 25 megawatt units---- Senator Inhofe. It's about one-seventh, I think, of the country is covered by these small---- Mayor Homrighausen. Correct. One out of seven people are covered by public power. We're small. We can't afford the disproportionate burden that these new requirements would require, and we've asked--we feel that the EPA must reassess their impacts of the rules on public power communities and prevent any disproportionate impact. We just don't see where the sound science has been used, and we would just call for Congress and the EPA to reassess. Senator Inhofe. All right. Thank you very much. Mr. Billings, the Maryland State Legislature voted against the mandatory treadmill emissions test, subjecting them to possible EPA sanctions. That vote was about 2 to 1. I assume you were not in the prevailing side on that? Mr. Billings. I was not, Mr. Chairman. Senator Inhofe. I hope that, during the course of these meetings that we have, that people realize that we're making an effort to get the information from people who are acting in a minority, which you are, of course, in your capacity. What percentage of your legislative body would you say that you are representing in your statement today? Mr. Billings. On the issue of health standards, probably about 85 percent. Senator Inhofe. On the---- Mr. Billings. On the issue of mandatory dynamometer testing, probably 40 percent. Senator Inhofe. Yes. All right. What about as far as the change in the national ambient air quality standards? Mr. Billings. I would say, if they were better informed than I've heard today, it would be on the order of 60 or 70 percent, but I haven't heard any information today that would lead to making them better informed. Senator Inhofe. Mr. Russman, you talk about the fact that you are involved with small businesses during your testimony, and the fact that they would be adding small business implementation work group. What you failed to mention in your testimony is that they failed to follow the Small Business Review Act. I think you're very familiar with that. A lot of people aren't. But that would require the EPA to state what the effect would be on small business prior to--before--proposing the rules. What do you think the impact would be on small businesses or small entities? It's loosely defined. Mr. Russman. Frankly, I think that the new standards would be a boon to small business and entrepreneurship and creativity among the people that would be affected. I think that our economy has blossomed and grown over the years with the standards that were in place, despite the cry that there would be catastrophe. I think, on the contrary, our Business and Industry Association, which is the largest business group in the State, has held hearings, and we've taken testimony, and they are firmly on board with these standards. Senator Inhofe. You were somewhat critical of the National Conference of State Legislatures for the action that they've taken or the position that they've taken on this. Are you equally critical of the U.S. Conference of Mayors, the League of Cities, the National Association of Counties? Mr. Russman. I can only speak to the National Conference of State Legislatures. I'm the immediate past chairman of their Committee on the Environment, and, frankly, the notion that this is an unfunded mandate, the idea of giving out information on the value of clean air is no more an unfunded mandate than perhaps in New Hampshire the---- Senator Inhofe. Implementation is expensive, and you don't consider that to be an unfunded mandate? Mr. Russman. I think that implementation will have to be looked at at the appropriate time, but my understanding was that we're looking at the health-based necessity of having new standards, sir. Senator Inhofe. Mr. Selph, what is our current ozone? Are we at .09 now approximately? Mr. Selph. In Tulsa? Senator Inhofe. Yes. Mr. Selph. Well, it depends on what area of the city you want to monitor. Actually, some of the prevailing winds coming into Glenpool, southern part of Tulsa, on an ozone alert day may be pretty close to .08, .09. Senator Inhofe. Yes. You know, we have worked with this for a long time, and I have to admit you've done a lot more than I have at the local level, and you're considered to be the real authority there. Have you ever approximated the costs that have been incurred by the taxpayers of Tulsa County in the efforts that you have undertaken so far? Mr. Selph. Of course, all of the efforts in Tulsa have been voluntary. The refineries, for example, voluntarily reduced the Reid vapor pressure (RVP) of the gasoline; all the suppliers of gasoline--Sun, Sinclair, and everyone else--reduces that Reid vapor pressure. It's required to be 9.0 in its number, and they reduce it to 8.2. Sun, alone, told me this week that that's costing them between $300,000 and $400,000. Senator Inhofe. Yes. It has been voluntary. Of course, that's, I suppose you'd say, an unfunded mandate to the business community, as opposed to the political subdivision. Mr. Selph. Well, certainly they recognize the benefits of staying in attainment, and they would like to stay in attainment, and realize that if Tulsa slips into nonattainment then the cost would be even greater than what it is. Senator Inhofe. Yes. You have a master's in public health? Mr. Selph. Yes, sir. Senator Inhofe. And you think this change would have a dramatic improvement on public health? Mr. Selph. I would like to think that it would; however, I've read a lot of the studies and reviewed a lot of the information that has been presented, and it's difficult for me to come to that conclusion. It seems to be so inconclusive at this point. Senator Inhofe. You know, our first hearing was the science. You remember, Senator Sessions, it was the science hearing where we had the Clean Air Scientific Advisory Committee well represented, and I think even the proponents of the rule change said that scientifically we'd be looking at probably 5 years before we could really get in there. Now I'm talking about in particulate matter, determining which particulate matter and which levels would be. So I think that's probably consistent with their answer. Mr. Selph. Sure it is, and you asked me about particulate matter of 2.5 in Tulsa. Frankly, I don't have a clue as to whether or not that's going to be a problem in Tulsa because we don't have a monitoring system. There are no monitors to tell us whether or not that---- Senator Inhofe. Don't feel bad. No one else does, either. Mr. Selph. I understand that. I understand that the EPA is testing those at a cost of around $10,000 per monitor. Senator Inhofe. Yes, sir. Senator Sessions. Senator Sessions. Thank you, Mr. Chairman. Mr. Selph, with regard to the CASAC scientific advisory study, are you aware just how close the vote was on those matters? I mean, the people who are advising EPA, who had a moral obligation to analyze the data in every study that was in and to make a call on it, split almost down the middle. Mr. Selph. Split almost down the middle. That's correct. Senator Sessions. In some arguments, you could argue that there were more votes against the regulations than there were in favor of it. I think, Mr. Billings, that's what concerns me. I'm prepared to support costly things if we can get a significant health benefit from it, but the numbers that I'm seeing and the reports that I read indicate some real divergence of opinion. For example, there was a study in Birmingham on particulate matter that showed a bad effect from it. Someone else came back and ran the same numbers and they factored in humidity and there was no change in health. So there are a lot of things that may be in that air on a bad ozone day other than just ozone and particulate matter. Would you agree with that, Mr. Billings, that maybe we don't know all we need to know yet? Mr. Billings. Well, clearly we don't know all we need to know. Thirty years ago, when we did the first standards, we didn't know all we needed to know. Congress didn't know all it needed to know in 1970. In 1970, 1977, 1982, and 1979 when EPA revised the ozone standard, they revised it upwards. And now they're saying that they went in the wrong direction. So there's no such thing as finality in science. That's why, when Senator Muskie and Senator Baker and this committee unanimously adopted this policy, they made a decision to keep science separate from cost, because they wanted to get the best scientific judgment they could get. They assumed that they were getting a sound scientific judgment separate from these other issues that the chairman has raised. Now, those issues are legitimate, but they are separate from the scientific judgment. Senator Sessions. Let's talk about that. Let's really talk about that honestly on the table here. I know that there is a belief that we need to keep science separate from cost. I believe that's correct. I think we need to scientifically know what kind of damage that we may get from bad air. All right. What about the ultimate decision to implement between multiple choices of making a community better to live in? The mayors have to make--she's got a lot of choices. Maybe the sewer system is better. Maybe there are hazardous waste dumps. I mean, don't we have to, at some point before we make a final implementation, categorize just how much health advantage we get compared to just how much the cost is? Mr. Billings. You're absolutely right, and that's--in 1970---- Senator Sessions. How do you distinguish---- Mr. Billings. In 1970 what the committee did--again in a bipartisan way--supported unanimously by the Senate, as well as the committee--was to set a deadline of 5 or 6 years to achieve the health standards. EPA was to promulgate the standards in 90 days. Congress came back at the end of that 5- and 6-year period and said, ``Lo and behold, we didn't do it. We established the urgency of the problem, but we didn't solve the problem.'' So they said, ``Well, we can give areas with sort of bad problems another 5 years, and those with really bad problems another 10.'' And Congress came back in 1990 and they said, ``We haven't gotten there yet. There are some areas where we've had enormous economic growth and so on.'' So Congress, under the leadership of this committee, said, ``We're going to give areas that are marginal, like Tulsa, we're going to take them out. We're going to let other areas have another 3 to 5 years and other areas will get 17 to 20 years.'' So what Congress has done is, after it established the science, what the health standards are, then Congress has taken a very careful look at these cost issues and these implementation issues and these technology issues and said, ``How long does it take, spreading our resources out so that we carefully spend our money, while at the same time balancing how much health we're going to protect, because every time we delay this for a year or 2 years of 5 years we are making a health decision, too.'' We're saying, ``Those people who are not protected then are going to continue to be unprotected.'' Senator Sessions. I appreciate that, and it is a difficult dilemma because we don't want to undermine health. But, as the air gets cleaner and as it continues to get cleaner, the burdens imposed by moving one notch lower and the health benefits from moving one notch lower--burdens get higher and the benefits get a little less. I think we're reaching that area, it seems to me. Mr. Selph, you mentioned your situation there, and you talked about the winds blowing into Tulsa. Were you saying there's a natural effect of ozone in your area, or is that---- Mr. Selph. We think that there are some biogenic factors at work, whether it's from old oil fields in the southern Tulsa County area or whatever the sources may be, but certainly they have an impact on the levels of ozone in that area. If I could, I'd like to go back to something that you said earlier about the study that was done and the effect of humidity. Certainly there are other factors at work, and that's why I suggested in my testimony that future epidemiological studies should look at the interaction effect that these co-pollutants have on each other, because sometimes they are additive--in other words, one plus one equals two. If you mix ozone with sulphur dioxide, for example, you may get an additive effect. Or you may get what's called a ``synergistic effect,'' where one plus one equals three. You have a more serious effect. Or it could be antagonistic, where one plus one equals zero, where they cancel each other out. Those type of things are difficult to research, but they do need to be researched. Senator Sessions. I think that's right. I know in the case of asbestos and tobacco, the combination--the cancer from tobacco and the cancer from asbestos add up to 8 or 10. It's the synergistic effect. So I think that's a good observation. One of the studies that we had was from New York about hospital admissions for asthma, and the numbers showed that there was something like a 1 percent increase in hospital admissions for asthma attacks on a bad ozone day. The chairman or some member of the committee had a scientific journal study that analyzed the problems that you have with these kind of analyses in public health and concluded that if the number didn't get to 2 or 3 percent you really didn't have a very good basis to take action. As a scientist and public health student, do you see a danger in making major decisions on data just that small? Mr. Selph. Well, I do, and those are certainly difficult decisions. And certainly if your family is of that 1 percent you might look at it from another perspective. But in terms of having what we consider to be significant findings, you really have to look at results that are greater than that. Senator Sessions. I'll just point out that the odd thing on the asthma is that ozone levels have been falling nationally for some time and asthma attacks are going up. I don't think there's any study now that can tell us what's causing it. It may be something entirely different. Thank you, Mr. Chairman. Senator Inhofe. Thank you, Senator. Before you got here I went over the--if you'll remember, the last time we were in this room Mary Nichols was the one who answered my question in the negative when I was talking about the cost and the benefit. I think it was just a mistake on her part, but this is--I think you have one of these, and this kind of answers some of those questions as to the cost and benefit. I want to thank all of you for coming. It's necessary to have a lot of meetings because we want input from everyone. Your entire statements will be entered into the record and we are going to be submitting questions to you in writing, and we'd like to have you respond because we want to hear from everyone. I hope, Mr. Billings' and Mr. Russman's appearance here, when really you're representing somewhat of a minority position, although you argue that it's not as well-informed out there as it should be, nonetheless, we are making an attempt to get everyone in here with all views. We appreciate very much your coming today and will appreciate your continued cooperation in responding to our questions so we can come up with the right conclusions. Thank you. And now I ask our second panel to come to the table. The second panel consists of: Robert Junk, president of the Pennsylvania Farmers Union on behalf of the National Farmers Union; Mr. Bob Vice, who is the president of the California Farm Bureau Federation for the American Farm Bureau Federation; Mr. Paul Hansen, executive director of the Izaak Walton League of America; Dr. Kevin Fennelly, medical doctor, staff physician, the Division of Environmental and Occupational Health Sciences, National Jewish Medical and Research Center; and Dr. Christopher Grande, executive director of the International Trauma Anesthesia and Critical Care Society. Welcome to all of you. I would say to our two witnesses, our two experts representing some of the agricultural concerns, that I've spent a lot of time throughout western Oklahoma and throughout southern Oklahoma in our ag communities to find that there is a great deal of concern from both the Farmers Union, the Farm Bureau, and their members. We'll start off with Mr. Robert Junk, the president of the Pennsylvania Farmers Union. STATEMENT OF ROBERT C. JUNK, PRESIDENT, PENNSYLVANIA FARMERS UNION, FOR NATIONAL FARMERS UNION Mr. Junk. Thank you, Mr. Chairman. Good morning, Mr. Chairman and members of the committee. My name is Robert Junk. I am the president of the Pennsylvania Farmers Union. I'm also a member of the board of directors of the National Farmers Union and appear here today on behalf of the National Farmers Union. The National Farmers Union is a general agricultural organization representing 300,000 family farmers and ranchers. We thank you for the opportunity to comment on the proposed changes of air quality standards and emissions of particulate matter. The National Farmers Union has a long history of supporting conservation programs because the family farmers, as stewards of the land, are concerned about the environment. Significant levels of emissions are already controlled because farmers and ranchers are using good soil and water conservation practices and are keeping their equipment in good operational condition. It is simply in their best interest to do so because they seek to preserve the land to pass on to future generations. The National Farmers Union is concerned that the proposed changes to the air quality standards for fine PM and ozone will greatly increase the regulations of farm operations and increase costs to farmers, both directly and indirectly. We are additionally concerned that there is currently no funding in place to offset these costs other than what farmers will be required to pay. At this point in time, I would like to summarize the rest of my testimony for means of time. I think there are three points that we have to look at when we are addressing the proposed changes here. We need realistic goals based on sound science. For example, Paul Johnson, head of the NRCS, made a comment: ``We believe and will coordinate research programs, and Federal, State, and local participation is necessary in order to begin answering these questions.'' I think it is important that we take a look at that whole issue because of the fact that, again, we have to establish realistic goals. What is something that we can achieve? And then also it has to be based on the sound science that supports to achieve those goals. I think the next issue we need to take a look at is a practical model. I think we're all aware of the Clean Water Act. The Clean Water Act has accomplished a number of different things out there today, and one of the biggest things that the Clean Water Act has incorporated out there in the agricultural community is the outreach in education to farmers. I think what we need to do is take a look at how the conservation districts, along with the States, can partner together to provide this adequate information to deliver to the farmers to give them their practical practices that can be done to achieve some of the standards that we would like to see in clean air. A little bit back in history of myself, currently I serve on the Chesapeake Bay Advisory Committee in Pennsylvania, and am the vice chairman of the Agricultural Advisory to DEP. Both of those agencies are working on water quality. Again, I reach out to the fact that one of the basic problems we are having here with the air quality standards is the fact that we are not doing the outreach and education that we have done currently under the water quality issue. I think it is important that we take a look at that. I think the other area that we need to--the third point that I would like to talk about is the Federal funds to achieve goals, basically making it a priority, not just for one agency but for all relative agencies. I think we need to, again, work for partnershiping to assure that the funding is there to help achieve our goals. For example, one of the biggest issues I think we're facing is retrofitting old and new equipment--the clarification between what is new and what is old when we go looking at these new standards coming into place. How do we associate a new tractor that was just purchased, and now we have these standards? Who is responsible for making that tractor comply with the new regulations? It's very costly. Farmers today have a difficult time being able to pass these additional costs on out of their products. It's important that we continue to look at that. One other comment real quick I'd like to make is dealing with the USDA. The Department of Agriculture questioned EPA's proposed standards on PMs and charged that the new standards are not based on adequate scientific evidence and would have a large economic impact on tens of thousands, if not hundreds of thousands of small business farms. I think that is a very important issue. In Pennsylvania we have a very heavy urban-based community. Also, we have farms right outside of these urban areas. We are suppressed by urban sprawl. If these new standards go into place, these emission standards may not even be coming from the actual farm community, but the actual farm community would have to abide by the same standards. So, in conclusion, at this point in time the National Farmers Union would encourage no changes within the standards until we have some good scientific base to back up these changes, along with being able to identify the source point. Thank you very much. Senator Inhofe. Thank you very much, Mr. Junk. We've been joined by Senator Baucus. Senator Baucus, would you like to have an opening statement? Senator Baucus. No. Thank you very much, Mr. Chairman. Senator Inhofe. All right. We've just completed our first panel, which was mostly county, State, and city officials. Mr. Vice. STATEMENT OF BOB VICE, PRESIDENT, CALIFORNIA FARM BUREAU FEDERATION, FOR AMERICAN FARM BUREAU FEDERATION Mr. Vice. Thank you, Mr. Chairman, Senator Sessions, Senator Baucus. Thank you for the opportunity to be here today to testify before this committee on a very important issue--air quality. I am Bob Vice. I'm a farmer from southern California. I raise avocados and citrus in Fallbrook, north San Diego County. I'm the president of the California Farm Bureau Federation, and today I'm representing the American Farm Bureau Federation, of which I serve on the board of directors. It's the Nation's largest general farm organization, with more than 4.7 million members nationwide. I'm pleased to have the opportunity to discuss with you today the impact that the new air standards would have on the agricultural community. My comments focus primarily on the Environmental Protection Agency proposal to revise the national ambient air quality standards for particulate matter. There has been and there continues to be a tremendous amount of conservation activities by farmers and ranchers across this country. These activities include such things as conservation tillage techniques, or so-called ``no-till'' planting, planting cover crops, planting trees and vegetation for wind breaks. All of these activities reduce wind erosion of the soil which, in turn, provides cleaner air. Farmers are cleaning the air and should get credit for those activities, but make no mistake that we are all for clean air, and this debate today really is about how to continue to achieve those goals. Agriculture is concerned because the EPA estimates show that 34.3 percent of the fine particulate matter can be attributed to agriculture and forestry. And, regarding this questionable large estimate, I quote Dr. Calvin Parnell, a professor of agricultural engineering at Texas A&M University, and a member of the Depart- ment of Agriculture's Task Force on Air Quality. He says--and we agree--``the data used to develop this inventory was based on erroneous emission factors published by EPA for cattle feed yards, for feed mills, grain elevators, and dust from farmers' field operations.'' Furthermore, I quote The Honorable Larry Combest, chairman of the House Agriculture Subcommittee on Forestry, Resource Conservation and Research. He says--and we also agree--``The Science employed in developing this rule is not up to par, and I'm concerned that farmers will bear the brunt of a bad policy based on equally bad science. We don't have the research yet to know whether we could actually attain these standards, how much it will cost the agriculture industry and the consuming public, and how much agriculture activities actually contribute to air pollution problems.'' Today, however, I want to focus on an actual situation those of us involved in California agriculture already face in regard to the present PM<INF>10</INF> serious nonattainment area for central and southern California. Agriculture in other areas of the country may face the same situation if new PM standards are imposed. Let me expand on one of our air district's experiences in dealing with the present PM<INF>10</INF> standards in regard to agriculture. The emission inventory for agriculture that is used by EPA has proven to have many flaws. Inaccurate estimations of the number of times a farmer drives their tractors over a field is just one major example. It was estimated that farmers tilled an alfalfa field eight times a year. The actuality is that alfalfa fields aren't tilled at all, aren't disked at all. They're cut. There is quite a difference between disking and cutting hay. It is estimated that rice fields were disked 13 times a year. Rice fields are disked one time a year. Rangeland two times a year. To my knowledge, there isn't any normal practice where you disk rangeland. But probably the most blatant example of inaccurate inventory which would have cost the agricultural industry hundreds of thousands of dollars was the initial emissions inventory for combustion engines used on irrigation pumps in the San Joaquin Valley. The original inventory estimated that nitrogen oxide emissions, a precursor to PM<INF>10</INF>, was at 626 tons per day from the irrigation pumps in San Joaquin Valley. This would have been the highest emission category for any nitrogen oxide in the San Joaquin Valley, including all cars and trucks. Driven by agricultural inquiries as to this study, a new study was commissioned that was based on actual interviews with farmers about their pumps. The new study determined that nitrous oxide emission for these pumps was actually 32 tons a day, not 626 tons a day. We have only begun to address agriculture's concern about PM<INF>10</INF> estimates, many of which are unaddressed and incorrect. Concerning these discrepancies, it's unbelievable that we are now facing again the same problems, only this time with smaller particulate matter. In attempting to resolve some of the agricultural emissions surrounding the PM<INF>10</INF> and PM<INF>2.5</INF>, it became necessary to conduct a multiyear, multifaceted air quality study. Such a study was developed and is now underway in California. However, it will not be completed, it is estimated, for 5 years. I want to emphasize that this study is the first comprehensive study that will actually measure, not estimate, PM<INF>10</INF> emissions. In order to avoid the mistakes that we made with PM<INF>10</INF>, this study and others like it must be completed before the costly implementation activities and attainment deadlines and regulations are set in place. In conclusion, I want to emphasize that a shotgun approach will only serve to put American agricultural out of competition with other countries and put agricultural producers out of work. Because U.S. agricultural commodity prices are really tied to global prices, a farmer cannot simply pass on the cost of doing business to the consumer. Therefore, any increase in operational cost of farming becomes significant and must be based on accurate information that really justifies the expenditures. We want to be careful that we're not tipping the balance of regulation in this country so far as to force the grocers and the brokers to place their orders with food purchased from other countries. The agricultural community enjoys breathing clean air as much as anyone, but we don't want to waste money on control measures that will have little or no effect on the air in this Nation. The USDA must maintain a strong presence and discussion continuing these standards, and we recommend it extend their comments on the issue in regard to economic impacts of the standards on farms and ranches. USDA, the Small Business Administration, and the USDA's Agricultural Air Quality Task Force must continue to demand that the concerns of American farmers and ranchers are addressed at the EPA in order to sustain a healthy abundant food supply. Senator Inhofe. Thank you, Mr. Vice. Mr. Hansen. STATEMENT OF PAUL HANSEN, EXECUTIVE DIRECTOR, IZAAK WALTON LEAGUE OF AMERICA Mr. Hansen. Thank you, Mr. Chairman, Senator Sessions, Senator Baucus. I am Paul Hansen, executive director of the Izaak Walton League of America, which is celebrating its 75th year of working to conserve, maintain, protect, and restore the soil, forests, water, and other natural resources of the United States. Protection of the Nation's air quality is part of the Izaak Walton League's mission and is of vital importance to our members, the majority of whom live in our Nation's agricultural communities. We've worked on clean air issues since the first Federal Air Pollution Act, which you may remember was passed during the Eisenhower Administration. You've already heard testimony on a few of the benefits this new standard would realize for the health of our people and our natural environment. I want to implore you today to consider the findings of the Department of Agricultural's national crop loss assessment network data which was released during the Reagan Administration. We were involved in this NCLAN study and cosponsored a symposium in 1982 with the Boyce Thompson Institute at Cornell University, at which many of the findings were released and discussed. In 1990 I personally followed up on that information and conducted a literature review of the effects of air pollution on crops, a summary of which is available for you here today. I'm here today to tell you that there is a great deal of science that shows unequivocally that the benefits of this standard would by far exceed the costs to the American farmer. The new ozone standard would provide millions of dollars in agricultural benefits each year. At air pollution levels today, well below those that are commonplace, ozone can reduce the yield of commodity crops like corn and soybeans by 10 percent or more, depending on the particular cultivator. Dirty air costs our country approximately one billion bushels of corn and two million bushels of soybeans each year. Based on the 1992 agricultural consensus figures, that cost is approximately $3 billion in lost revenue. This figure is consistent with the figure found in 1982 by NCLAN, where researchers calculated the air pollution losses alone to only four major crops--corn, wheat, soybeans, and peanuts--amounted to between $1.9 and $4.5 billion annually. Because these figures did not include other potentially sensitive crops or other pollutants or some of the potentially synergistic effects we heard about earlier, or environmental stresses such as disease and drought, these figures are likely to be much higher than the ones that NCLAN found. It's very well established in the literature the effects of ozone on crops is very insidious and, in most cases, invisible even to experts such as those we have here today. A 10-percent reduction, which can be common at ozone levels found throughout much of the soybean growing region, while highly significant in terms of yield, would be effectively invisible, even to the trained eye. Can you imagine holding in your hand soybeans, and then another handful of soybeans that would weigh 10 percent less? It would be very hard to see. In the last 2 years, much more recently, three groups of experts on ozone's vegetative impacts have reconfirmed the seriousness of ozone's impacts on commodity crops, forests, and other vegetation, which were first measured by NCLAN in 1982. These groups include the agricultural forest and ecological scientists convened at the Southern Occident Study Workshop in 1995, the Department of Interior, and the independent Clean Air Scientific Advisory Committee. All three have recommended a secondary standard for ozone to help protect our Nation's crops and vegetation from the effects of ozone. All have emphasized that crops and vegetation are much more sensitive to ozone impacts than even humans are. I know that concern has been expressed regarding the cost of implementing a new PM<INF>2.5</INF> standard, particularly in agricultural areas. I'd like to close by addressing this issue. First, it's essential that standards be set at levels that are protective of human health, not levels regulated industries consider cost-effective. More importantly, the new particular matter standard applies to PM<INF>2.5</INF>, not PM<INF>10</INF>. EPA has not recommended any tightening levels of PM<INF>10</INF>. The distinction is important because all PM<INF>2.5</INF> is the product of combustion, and almost all PM<INF>10</INF> is created by earth-moving activities such as construction, mining, or agricultural practices like tilling. Third, on most farms the primary source of combustion is diesel-fueled farm equipment. This equipment is responsible for a very tiny amount of the primary pollutants that create PM<INF>2.5</INF>. The amount of these pollutants created by farm equipment is so small that they're insignificant when compared to emissions from other PM<INF>2.5</INF> sources. It is highly unlikely that they would be regulated under any compliance plan. Farm equipment also creates only about 1 percent of the national nitrogen oxide emissions and almost no sulphur dioxide emissions. Finally, the history of pollution control suggests strongly that, even if control on diesel fuel does become necessary, these controls will cost a lot less than predicted. One industry lobbyist has suggested that our children can stay home on bad air days. Well, farmers don't have that option. On balance, if you take a good look at the science, I think that you will see that the new standard has a net benefit to the Nation's farmers. Mr. Chairman, I would like to thank you again for the opportunity to address this new standard's agricultural impacts and to try to shed light on one of the hidden victims of the Nation's polluted air, the American farmer. I would greatly encourage you to add to the list of people who testify at your hearings some of the Nation's experts, such as Dr. Howard Hack or Dr. Alice Cowling, who have been parts of these committees and were part of the NCLAN study back in 1982. Thank you. Senator Inhofe. Thank you, Mr. Hansen. We had made an attempt to involve as many people as possible, and apparently there is an infinite number of experts out there. Dr. Fennelly. STATEMENT OF DR. KEVIN P. FENNELLY, M.D., STAFF PHYSICIAN, DIVISION OF ENVIRONMENTAL AND OCCUPATIONAL HEALTH SCIENCES, NATIONAL JEWISH MEDICAL AND RESEARCH CENTER Dr. Fennelly. Thank you, Mr. Chairman and members of the subcommittee. My name is Kevin Fennelly. I'm an academic physician at the National Jewish Medical and Research Center in Denver, Colorado. I'm board certified in pulmonary medicine and in occupational environmental medicine, and my time is evenly divided between patient care and clinical and epidemiologic research. My research interests include the epidemiology of the health effects of particulate air pollution, so I am familiar with the scientific literature in this area. I'm testifying today as a concerned physician, scientist, and citizen in support of the EPA proposal for a new particulate matter standard. I wish to emphasize three points: No. 1, particulate air pollution causes human suffering, not just statistics; No. 2, there is biological plausibility to support the epidemiologic findings of adverse health effects associated with particulate air pollution; and No. 3, the risks of adverse health effects due to particulate air pollution are comparable to other risks which our society has not found acceptable. I have personally seen patients who report worsening of their asthma symptoms associated with air pollution in Denver, Phoenix, Los Angeles, and the San Francisco Bay area, and colleagues have reported similar encounters to me. I am disturbed by recent comments which have trivialized the respiratory symptoms associated with air pollution. Allow me to suggest a simple exercise for those of you who may not have experience with respiratory diseases. Simply take a drinking straw and breathe through it for several minutes. Or, better yet, try to walk about and climb some stairs. Then imagine feeling that way for hours or days. It is not a trivial discomfort. Another disturbing suggestion I have heard is that patients with lung diseases should simply medicate themselves more to cope with air pollution. This is irrational and violates basic medical principles. A common criticism of the EPA proposal is that the epidemiologic studies are not supported by biological plausibility. Although we still have much to learn, this is not true. In the killer fog of London in 1952, 60 percent of over 500 autopsies demonstrated both heart and lung disease. Godleski and colleagues recently presented preliminary findings of an inhalation toxicology study coherent with these pathologic findings. Animals with chronic bronchitis who were exposed to urban air particulates had a much higher death rate than did the unexposed animals. Other animal studies have demonstrated lung inflammation and injury, especially with exposures to the very small or ultrafine particles. In my written testimony I have cited several recent papers on the basic biological mechanisms underlying these inflammatory responses. The critical question is how much risk we, as a society, are willing to accept. In our history, cancer hazards have often been regulated if the risk were greater than 1 per 100,000. In fact, the Clean Air Act amendments of 1990 mandated that the EPA regulate air pollutant emissions to reduce the lifetime cancer risk to less than 1 in 1,000,000. I suggest that an increased risk of death from heart or lung disease should be assigned equal value to the increased risk of death from cancer. In my written testimony, I calculated incidence rates for deaths attributable to short-term exposures to particulate air pollution in Denver, Philadelphia, and Los Angeles. For Los Angeles, this risk is 250 per 100,000 persons over 10 years; thus, the risk of acute cardiopulmonary death associated with particulate air pollution over only one decade is greater than a lifetime risk of cancer previously deemed unacceptable by Congress and the Supreme Court. Furthermore, acute mortality is only the tip of the iceberg. These estimates do not include the many chronic and nonfatal health effects of particulate air pollution. These issues are extremely complex, and in our struggles to be objective by analyzing quantitative data it is easy to become known by the numbers. Behind those statistics are real people suffering with real symptoms. There are adequate data to support more stringent regulation of particulate air pollution, and the lack of absolutely certainty cannot be an excuse for inaction. We could improve the public health by implementing even more protective standards, such as those proposed by the American Lung Association. At minimum, I urge you to support the proposed changes in the particulate air pollution standard as proposed by the Environmental Protection Agency, but with retention of the existing PM<INF>10</INF> standard. Thank you for this opportunity to share my concerns. Senator Inhofe. Thank you, Dr. Fennelly. Dr. Christopher Grande. STATEMENT OF DR. CHRISTOPHER M. GRANDE, M.D., EXECUTIVE DIRECTOR, INTERNATIONAL TRAUMA ANESTHESIA AND CRITICAL CARE SOCIETY Dr. Grande. Good afternoon. My name is Dr. Christopher Grande, and I'm a practicing physician from Baltimore, MD. I'm a board-certified anesthesiologist and intensive care specialist in trauma injury. I have authored and edited numerous medical books and have had about 30 articles published in professional journals. I'm also executive director of the International Trauma Anesthesia and Critical Care Society, or ITACCS for short. ITACCS is a 10-year-old professional association of more than 1,000 trauma specialists and emergency room physicians, nurses, and related professionals. I also hold a master's degree in public health from Johns Hopkins University School of Public Health. I would like to thank the committee and Chairman Inhofe for inviting me to provide ITACCS' views on the proposed ozone and particulate matter standards. Before I specifically address the standards, though, I would like to first give the committee some important background information. As Dr. Fennelly pointed out, every day I'm in the hospital emergency room I see patients and problems vying for critical resources, from acute asthma patients to traumatic injuries. These are all competing public health priorities--all competing for limited available public health resources. The focus of ITACCS is traumatic injury, often accidental in nature, such as that caused by motor vehicle, on-the-job, or household accidents. Injury is the leading cause of death for those under the age of 45, and it is the fourth-leading cause of death overall in the United States--about 150,000 deaths per year. Trauma cuts across all of society. The injured person is not someone else. The injured patient is you, your child, your spouse, your parent. The average age of injury victims is 20. Death from injury is the leading cause of years per life lost in the United States--more than twice the number of years per life lost as the next-leading cause, cancer, and three times that of heart disease. According to 1990 statistics from the Centers of Disease Control and Prevention, traumatic injury was responsible for approximately 3.7 million years of potential life lost. In contrast, cancer was responsible for 1.8 million years of potential life lost, and heart disease was responsible for 1.3 million years of life lost. What does this tell us? The National Academy of Sciences concluded in 1985 that trauma was the No. 1 public health problem in the United States. This situation remains unchanged today. How is this relevant to the debate over ozone and particulate matter standards? It can be simply put in three words: public health priorities. The fact is that society has limited resources that it can spend on public health. As such, responsible public policy dictates that such resources be spent so as to achieve the biggest bang for the buck. ITACCS is not convinced, neither should the public be, that the proposed ozone and particulate matter standards are a smart way for us to spend our limited resources. But I want to make it clear that we are not singling out only proposed ozone and particulate matter air quality standards. The proposed standards are merely the latest example in what we see as a disturbing trend over the last two decades where scarce public health resources are diverted from more clearly demonstrated beneficial uses. The unintended consequence of this diversion might be a decrease in the overall effectiveness and efficiency of public health care delivery. As the makers of our laws and the ultimate allocators of our public health resources, Congress should take the lead in rationally allocating our limited resources. But how would Congress know what is a priority and what is not? The process behind the proposed ozone and particulate matter air quality standards has not been helpful. First, the proposed rules do not provide a ranking or comparison between the estimated health effects attributed to ozone and PM and those of other public health needs. One of the health end points associated with the proposed rules is asthma. No doubt, asthma is a serious issue and our public health resources should be directed at asthma. But a recent study published in the February 1997, issue of ``American Journal of Respiratory and Critical Care Medicine,'' a journal of the American Lung Association, helps place air- pollution-induced asthma in perspective. In this study, which includes a study design that has been characterized as the most reliable on potential health effects of ambient ozone--that is, the study model of children attending asthma camp--air pollution was associated with a 40 percent increase in asthma exacerbation in children. It sounds bad, but what does this really mean? Assuming, for sake of argument, that the author's conclusion is reasonable, this increase in asthma exacerbation equates to one extra use of an inhaler amongst one in seven severe asthmatics on the worst pollution day. However, close scrutiny of this study reveals that many confounding risk factors for asthma exacerbation were not considered by the study authors. These risk factors include: changes in temperature, atmospheric pressure, anxiety, physical exertion, dust, and fumes, and many more--all recognized to be active factors. Moreover, the study is inconsistent with the general observation that, while asthma has increased over the last 15 or so years, air pollution has decreased. As stated earlier by the chairman, there appears to be no generally accepted explanation for this phenomenon; therefore, the study does not satisfactorily link ambient ozone with asthma exacerbation. Before we commit our scarce resources, wouldn't it be useful to know exactly where this very uncertain health effect ranks amongst other real public health priorities? If asthma qualifies as a public health concern, appropriate levels of funding should be targeted at programs that have been proven to be effective but not fully implemented. Senator Inhofe. Mr. Grande, we're running out of time. Could you conclude quickly? Dr. Grande. Certainly. The long and the short of it, Mr. Chairman, to cut to the end of this, is that asthma, as Dr. Fennelly so astutely pointed out, is an important health problem. It needs to be examined within the context of other important health problems. I'm not here to talk about my disease, trauma, today, but if I were, I have the hard statistics to back up any statement that I would want to make that would allow trauma to compete for allocation of other scarce health resources. Any disease should be qualified as a public health crisis and then appropriate levels of funding should be decided through a competitive analysis based upon sound data. Senator Inhofe. Thank you, Dr. Grande. Let me start off with the two gentlemen representing the Farmers Union and the Farm Bureau. We passed a law, the Small Business Regulatory Standards Act, that requires that, prior to putting out a rule, that we deliberate the effects that it would have on what they call ``small entities.'' It's somewhat vague in its interpretation, but generally they're talking about people with less than 10 employees or individuals. I think they're really talking about the farmers of America here. Apparently, we've heard from these hearings here that this wasn't going to have any noticeable impact. Would you agree with this, that we are--that it's not going to have the impact on what is defined as small entities or firms? Mr. Vice. I certainly wouldn't agree with that at all. I think it would have a large impact. Senator Inhofe. There are two areas, two laws that we've talked about several times. That's one of them. The other is the unfunded mandates. We've heard from the last panel that they expressed themselves pretty clearly on that. Mr. Vice, you heard testimony from Mr. Hansen. They claim that farms would benefit more from these standards and that the only real cost would be controls on diesel-fueled farm equipment, which he doesn't seem to think will be necessary. Last week we had a witness from the Southwest Coastal Management District in California--which you probably know that individual. They said that the diesel vehicles would need to be controlled, along with small, two-stroke engines. How would these controls, in your determination, affect farmers? Mr. Vice. Well, I think it will affect it greatly. In fact, the latest information I have is that the emissions, alone, is estimated to be--the total emissions, according to a chart that was put out by the Air Resources Board, indicates that almost over a third of all the emissions are from agriculture. If we start trying to mitigate that, it is going to be a tremendous cost to agriculture. I agree with Mr. Hansen that there would be crop loss. I think there have been studies that would indicate that. What we do disagree on is how much. In fact, I have a report by EPA's own Scientific Committee reporting on crop loss that says that two of the experts--it said the open-end chambers experiments, by their very design and execution, produces results that over-estimate the effects of ozone on plant yield. I think that we have a lot of work to be done in this area, and I don't disagree with anyone about the fact that this is a health problem that needs to be addressed. My testimony and my concern is that we have bad science dictating how much of this is coming from the agricultural community. When you have a study that says farmers disk a hay field eight times, we know that that's not right. Senator Inhofe. You're from California, and you, Mr. Junk, are from Pennsylvania, so we're kind of in the middle there out in Oklahoma. I probably speak for Senator Baucus, too. We have a different type of a problem--that is, a normal wind velocity that is there on a daily basis. I was in western Oklahoma all day yesterday, all the way from Altus up to Woodward. They are very much concerned about this because on a normal day--in fact, you can't find a day that doesn't have what we feel would put them into the position, as far as the new standards on particulate matter, of being out of compliance. Would you tell me again--you talked about the faulty information or assumptions that we had on disking of rice fields. I found that to be kind of interesting, although I don't really think about disking of rice fields, but I don't know that you don't disk the rangeland, because we have a lot of that out there. Where did that come from? Mr. Vice. That was figures that were used in the study on PM<INF>10</INF> particulate matter, 10 microns, and how much was coming from the agricultural community. It was estimated that the dust contributed this vast amount, and when they extrapolated back of how the dust ended up in the air it was because of these number of trips through fields that tractors made, and that's where the estimation of 8 times disking a hay field came up, 13 times on rice, and 2 on rangeland. That was part of the study that was put together on ambient dust. Senator Inhofe. Yes. And who did this study? Mr. Vice. It was done, as far as I know, by EPA. Senator Inhofe. OK. Mr. Hansen, you mentioned that--and I've heard in the last five hearings all kinds of estimates on premature deaths. I think the figure you used was 15,000. The figure that the EPA used at one time--they've used several figures--at one time was 20,000, and then we had a group coming in here that said it was 60,000. I guess I'd ask you and the two doctors to get a--how do you arrive? You know, obviously someone is wrong, but if you're trying to promote a program that might be a flawed program or a premature program not based on science, the first thing you want to do is get the public thinking that there are thousands and thousands of premature deaths out there. Give us your estimate as to how they can determine, Dr. Fennelly and Dr. Grande, premature deaths, and why there is such a divergence in these estimates? Dr. Fennelly. I'll go ahead. I believe most of that, or at least the early work, was done by Dr. Joel Schwartz, and it does involve a lot of computations that I think results in some of the disparity in results, because essentially you have to try to get estimates of how much particulate matter pollution there are in various cities across the country, and then for each day try to estimate how much over baseline, if you will, the pollution is, and then what fraction of deaths would be attributable to that. But, as you said, what I've heard is consistent with your comments, and that is more in the 40,000 to 60,000 per year range. Senator Inhofe. That's not really what I said. I said that there is a disparity that I don't understand because I don't have that kind of a background. My beloved mother-in-law died on New Year's Day. She was 94 years old. I've often wondered if she showed up in the statistics. Dr. Fennelly. Well, she may if she was in a city where there was high air pollution on that particular day. Senator Inhofe. Yes. Dr. Fennelly. But because of the epidemiologic nature you can't isolate any one person. Senator Inhofe. Dr. Grande, any thoughts on that? Dr. Grande. I agree with a lot of the way that Dr. Fennelly has explained the process of collecting the data. On a specific point, the number that you brought up, I heard the 15,000 to 20,000. Let me point out that I am not an expert on ozone or air quality standards, but I do have training and background in public health and biostatistics, and, as far as that 15,000 or 20,000 deaths per year disparity, it was my understanding, as acknowledged recently by the EPA and then reported in major newspapers such as The Washington Post, the simple error of using an arithmetic mean instead of using an arithmetic median reduced this estimate mortality from fine particulate matters down from 20,000 to 15,000. Now, having reviewed, as I have, a fair amount of the data and literature, both from the physical sciences side of this as well as the clinical science side of it, and as an educated observer, it seems to me that the right hand is not talking to the left hand about this data, and that's one of the problems. A lot of this clinical studies which really would represent, if you will, where the rubber meets the road have yet to be done. But, in general, reviewing the collection of data that I've seen on this--and I've heard people much more educated and astute about this comment the same, which is that it's an extremely poor collection of data. It's based on a number of assumptions which, if--it's almost like a house of cards. If you pull out one card, everything through that entire assumption could fall apart. Senator Inhofe. I understand. Senator Baucus. Senator Baucus. Thank you, Mr. Chairman. Gentlemen, obviously the goal here, as in most hearings, is to find the truth. Usually there is a grain of truth in what everybody says, and it's usually true that people kind of take their own positions in representing their own organizations, which tend to be a little more extreme than the middle. That's not always the case, but I think it's a fair assumption. So I'm going to take that assumption and assume that each of you is taking a position which is tilted a little bit more toward your organization's usual point of view rather than where the real truth actually lies here--that is, somewhere in between--and attempt to try to find that. Now, there are some who say that even though PM<INF>10</INF> is an issue with respect to wind and dust and so forth, that what we're really getting at here is not PM<INF>10</INF> at all but PM<INF>2.5</INF>. And those people say--and this is EPA's data. Right away that's going to raise a red flag. Some people are going to say, ``It's EPA, therefore it's wrong,'' but I'm going to assume that it's accurate until it's proven wrong. According to EPA, wind-blown dust is really only a small part of PM<INF>2.5</INF>--in fact, it's about 10 percent of PM<INF>2.5</INF>--and that farm activities are responsible for about one-third of wind-blown dust, and therefore a calculation is that farm activities are responsible for only about 2 to 3 percent of the total PM<INF>2.5</INF> problem, and that's somewhere along the lines of what you were saying, Mr. Hansen, if I heard your testimony correctly. And the rest of PM<INF>2.5</INF>, comes from combustion, and farm activities obviously through diesel combustion are part of that. But its this analysis that I am referring to--again this is off of the EPA web page--that essentially, with respect to PM<INF>2.5</INF>, farm activities are about 2 to 3 percent of the problem, and with respect to that part--and if we're to even look at diesel fuel and combustion, which would be diesel combustion, that when a State implements a plan, a State has all kinds of options on how to implement a plan. Perhaps a State might want to say, with respect to diesel combustion on farms, that that's not going to be touched; that, rather, they might look at diesel fuel off coast with ships or highways, or trucks--diesel combustion from trucks, for example. I know that farmers have a pretty good lobby, and my sense is that farmers will do a pretty good job in not being part of the problem. So what I'm really trying to get at here is first you, Mr. Hansen, and I'll ask you, Mr. Vice, to comment just on that general proposition that if you really look at the actual data that farm activities are really a very small part of 2.5, and then the next point is with respect to what we do about that if this proposed regulation were to go into effect, that it is true that there are lots of ways to deal with that, and one is through the State implementation plan, and when the States do devise their implementation plans there are a myriad number of ways that they can deal with the combustion part of it. So, Mr. Hansen, your observations? You know, we're all Americans. We're here together. We're just trying to find a common solution here. Mr. Hansen. Thank you. Mr. Chairman, Senator Baucus, I think you're absolutely correct that State implementation plans are very unlikely to include farm equipment and that PM<INF>2.5</INF> is really not going to be affected by agricultural activity to any great extent. Diesel engines are already regulated by EPA and will continue to be. And we should point out that EPA has expressed their willingness to collect PM<INF>2.5</INF> monitoring data for 3 years before PM<INF>2.5</INF> implementation, so we should know a great deal more about this very question before anything before the States would be asked. Senator Baucus. So what you're saying is if this were to go into effect it would be about 10 years before it's felt? Mr. Hansen. Very likely. Senator Baucus. And lots of different options and alternatives during that 10 years to try to figure out an answer to this. Mr. Vice. Mr. Vice. Thank you, Senator Baucus. I couldn't agree more with you that we--this is an issue that, as we like to say, the science is in the following mode as to some of the regulations that are being proposed. For example, we started 2 years ago with the reformulated diesel in California during the winter months. We today do not know how much good effect or bad effect that's having. We think it's good, but, quite frankly, we don't have the figures in from that yet. There is a study that's being implemented right now, a good, hard study that measures what is the emissions out of farm equipment diesel and trucks hauling on the highway products with the reformulated diesel in the winter months. We don't have those figures yet. What we're saying is, ``Let's don't rush to implement standards where we don't have the hard evidence.'' We have estimates on what the emissions really are. Give us a chance to find out what those hard numbers are so we can make intelligent decisions rather than just rush into something. Senator Baucus. Yes. Mr. Vice. And I appreciate your estimate of the farm lobby, but I would maintain that anybody that sees over one-third of the emissions coming from agriculture isn't going to want to leave agriculture out of the formula to try to fix it. Senator Baucus. But we've determined it's not one-third; it's about 2 to 3 percent. Mr. Vice. Well, according to EPA's figure it's 34.5 percent is agriculture and forestry. Senator Baucus. Not with respect to PM<INF>2.5</INF>. Mr. Vice. This is the PM<INF>2.5</INF> pie chart. Senator Baucus. Well, I have different EPA data. What I have is, once you calculate it out, it's about 2.5 from PM<INF>10</INF>--from PM<INF>2.5</INF>. Mr. Vice, I'm just curious--Mr. Chairman, one more question? Senator Inhofe. Sure. Senator Baucus. I was just struck with Mr. Hansen's point that the ozone standards will actually increase crop yields. Do you agree with that or not? As I understand, it's USDA data. I don't know where you got that information. Mr. Vice. I think there's crop damage. I don't agree that it's anywhere to the extent that Mr. Hansen has indicated. We think there are some--we know that there are some decrease. I was pointing to the EPA's Scientific Committee on that subject, where they admit in their own information that the figures that fall in their report are highly over-estimated. That's their Scientific Committee's report. Senator Baucus. Have you seen that, Mr. Hansen, that document that Mr. Vice is referring to, where apparently there is some acknowledgement that the data is over-stated? Mr. Hansen. I've not seen this. I do have data from USDA, 1984, which has a list of the reductions for various cultivars. I'd be glad to submit this for your consideration. Senator Baucus. Mr. Chairman, if we could just have both documents submitted for the record, we could go through it and try to determine what's going on here. Mr. Hansen. The numbers are very high for some cultivators. Senator Baucus. Thank you. Thank you, Mr. Chairman. Senator Inhofe. Senator Sessions. Senator Sessions. Thank you very much, Mr. Chairman. I think we do have a serious public policy decision to make. Dr. Grande, I want to express my appreciation to you for your remarks. As somebody who just joined this committee, just joined this body, I came in here and would ask certain questions like, ``If we're going to deal with asthma and the ozone levels cost $6 billion to implement, could we save more asthmatics by spending $6 billion more on treatment and care of asthmatics?'' And I'm told, ``Oh, no, you can't ask that question. That deals with cost, and we're not here to talk about cost.'' But obviously we're here to talk about cost. You had the courage to come in and say some things I thought were very, very worthwhile. Let me ask you this: is it your understanding on the 15,000 premature deaths that many of those would represent terminally ill patients that are in very weakened positions? Would that be factored into the numbers? Dr. Grande. I think my understanding of the terminology or the phrase used is premature deaths in the context of this discussion on ozone and air quality and PM. There are a lot of what we would call ``confounding factors,'' and particularly if you look at the mean age of these so-called ``premature deaths.'' They tend to be skewed toward the older age groups, and they seem to show that there is an association with some other underlying cardiopulmonary diseases. And whether Mr. X was going to die on Tuesday from whatever it was that killed him versus on Wednesday, and whether air quality had anything to do with that or not I think is a very difficult issue to prove. It would be nice if we could prove it, but I don't think there have really been any legitimate efforts to try to prove that. As far as the comment that you made in terms of whether we can more intelligently or effectively or efficiently spend the money that we are going to spend for asthma, which is a public health problem, I think Dr. Fennelly, as a pulmonologist, sees far more patients with chronic asthma than I do. I see patients with acute asthma that come into the emergency department or the ICU. Yes, it's true that it's a very dramatic presentation of somebody gasping for their next breath, but I have to also tell you that, as somebody working in those environments, the medications that I have available to me now allow me to rapidly and effectively reverse that ``death's door'' situation, whereas the same patient, same age, comes through the door after having been in a car accident with a head injury and I can't do anything about that. So if you wanted to ask me if that next patient coming through the door was a relative of mine and where am I going to spend my next dollar, I would have to say on something else. Or, if you wanted me to spend it on that, you've got a much larger job to prove it to me that that's an effective allocation. Senator Sessions. Well, it is a very troubling moral dilemma for us to wrestle with, and I think, with regard to trauma deaths, as you point out, many of those are otherwise healthy with long life expectancies. I think that's something that, as we consider--and I think it's important to understand, and I think most of us do that are thoughtful, that any burden that we place on local government, farmers, industry, or individuals that's a cost is the equivalent of the Federal Government taxing them and doing that for them. In other words, it is a drain on their resources, and before we do that we ought to ask, if we're going to drain that resource, where would we spend it to get the most benefit for the most people. One of the things that's troubling me has been the numbers. I do find that strange. Mr. Chairman, you pointed out the cost/benefit study error that is very significant, I think, very troubling that EPA would miss that, and then we have them cultivating hay fields 8 times or 13 times a year. Anybody that knows anything about--I mean, that's out of the range. That's not an error. I mean, that's just dreamland numbers. If you know about farming, you know that's not true. So I don't know where we are on all those things, but they are matters that concern me. Dr. Fennelly, do you know how the premature death numbers are calculated? Do you know? Can you tell us, in your best judgment, because it still concerns me that 15,000 may be prematurely dying. I think that's a very significant figure. I don't mean to minimize it, but how is that calculated? Dr. Fennelly. Well, these are difficult epidemiologic methods. They generally are based on time series studies where you add in all the variables that you know about that contribute to a health outcome--in this case mortality--and, for example, we know that season, temperature, humidity, day of the week, a number of factors are involved, and so you create a base model and say that this is the variability that we would see. Senator Sessions. Day of the week? Dr. Fennelly. Day of the week. Monday mornings are a very bad time, just so you know. Senator Sessions. Police say the full moon is a bad time. Dr. Fennelly. Not that we know of. And then on top of that you add the air pollution variable, or whatever exposure you're interested in, to see if there's an excess in that amount. Part of the problem now is that--and the reason the science has come to the forefront is because of the great computing power that we have now and the improvement in statistical methods. In a way, this is--I sort of feel like people are shooting the messengers when they get mad at the epidemiologist for coming up with these studies, because these are very sensitive tools. It's the same as going into your doctor feeling fine and then having your doctor say your blood pressure is elevated and you need to take this, and you say, ``I didn't perceive a problem. What's the deal?'' In a sense, on a population basis, I guess that's the best type of corollary I can offer. The problem is these are very small effects, I'll grant you that, but they're distributed through a large number of people across the country. You'll probably remember in 1984 the Bhopal disaster. More than 2,000 people were killed in that disaster due to an acute release of methyl isocyanate. But in a way we have become numb by the numbers because we're talking about, ``Well, is it 40,000 or 60,000?'' Just as an aside, I think the 15,000 we're talking about are the amount of lives saved. The 40,000 to 60,000 are the total mortality attributed to particulate air pollution. Either way, it's a lot more than 2,000. And so in a sense we have to deal with our improved technology, our improved ability to detect these very subtle effects. I'll grant you, these are very difficult decisions to make based on public health priorities and all the priorities that you face. Senator Sessions. Not only that, but the question is, If somebody had severe emphysema and would be adjudged to be terminally ill, if they died when there was a bad ozone or particulate day, that would be part of the statistics number; is that right? And so it is fair to say if more died on a bad air, during bad pollution, that is an adverse health effect. Dr. Fennelly. Yes. Senator Sessions. But we're talking about that kind of effect, aren't we? Dr. Fennelly. Yes. Senator Sessions. Premature death? Is that the right phrase? Dr. Fennelly. We're looking at the excess of total deaths on those particular days. Senator Sessions. Excess of total deaths on the days in which the pollution is bad? Dr. Fennelly. Right, compared with lesser pollution. Senator Sessions. Thank you. Senator Inhofe. Thank you, Senator Sessions. I want to thank the panel very much. You will be receiving some questions in writing. Yes, Mr. Junk? Mr. Junk. I apologize. I'd like to make a comment to your first question that you asked earlier about the small business impact. Senator Inhofe. Yes. Mr. Junk. I think it's important that we take a look at that issue because of the fact that I don't believe that it has been recognized within the agricultural community of what impact this will have on the small family farm operations. USDA has stated concerns held by farm groups that the new standards may impose significant cost on farmers, particularly the 71 percent of U.S. farms with annual sales of less than $40,000. That's a large segment of agriculture that's going to be impacted dramatically by these standards, especially when we look at not just the tractor that is driven on that farm, but the inputs that they have to purchase off the farm such as fertilizer, such as pesticides, such as other associated products used to produce that crop, along with the livestock operations as far as the emissions from the livestock operations, also. How does that affect the poultry farm, the dairy farm, the beef farmer? Those are critical issues that need to be addressed and need to be addressed on economic impact to the whole industry. Senator Inhofe. I appreciate that, Mr. Junk, and I think also the fact that if you're talking about small entities you're talking about, whatever definition you use, the impact on utility rates is going to be about an increase of 8 percent, as we have determined that it's in that range, anyway. That affects everybody. Our time has expired for this panel. I appreciate very much your being here. I know your time is very valuable. You will be receiving some questions in writing. Mr. Vice. Mr. Chairman, could I leave two documents for the record? Senator Inhofe. Yes. Mr. Vice. The letter that was in question, the amount of crop loss. That's EPA's own scientific panel. Plus the pie chart on 2.5 that Senator Baucus was concerned about that shows that they believe it's 29. I'd like to submit both of those for the record. Senator Inhofe. Yes. Without objection that will be made a part of the record. I'd invite our third and final panel to come forward to the witness table. I'd like to welcome Mr. Harry Alford, who is the president of the National Black Chamber of Commerce; Mr. Frank Herhold, executive director of the Marine Industries Association of South Florida; Mr. Jeffrey Smith, executive director of the Institute of Clean Air Companies; and Mr. Glenn Heilman, vice president, Heilman Pavement Specialties, Incorporated, for the National Federation of Independent Business. We will start with Mr. Alford. STATEMENT OF HARRY C. ALFORD, PRESIDENT AND CEO, NATIONAL BLACK CHAMBER OF COMMERCE Mr. Alford. Good afternoon, Mr. Chairman. As you know, my name is Harry Alford, president and CEO of the National Black Chamber of Commerce. The NBCC is made up of 155 affiliated chapters located in 43 States. We have three divisions, nine regions, 43 district offices. We have them in Tulsa, Oklahoma City, and Lawton, for your information, Mr. Chairman. Through direct membership and by our affiliated chapters, the NBCC directly speaks on behalf of 60,000 black-owned businesses and represents a total populous of black-owned firms which, according to U.S. Census, is over 620,000. The NBCC is opposed to the two proposals presented by the EPA that would set a more stringent ozone standard and establish a new standard for emissions at or below PM<INF>2.5</INF>. The Clean Air Act of 1990 has made much progress in improving our environment. We sincerely feel that the continuance of this process will further improve the environment. To put more stringent demands on our businesses will have extreme adverse impact on business, in general, with even higher stakes for small businesses, per se. If big business gets a cold, small business gets the flu, and black- owned businesses suffer pneumonia. An example of the above can be found in our campaign to develop business partnerships with the automobile industry. We have approached and are working with principals within the management of Ford, Chrysler, and General Motors. One success story is at the time of preliminary discussions with Chrysler we had no black-owned architect, civil engineer, or construction company performing work of over $1 million. Today, after just 1 year of interaction, we have businesses in such disciplines actively working on or negotiating over $100 million worth of Chrysler expansion. This is just one example. These three auto makers have expansion plans in cities located in the midwest, southwest, southeast, and northeast. This is an expansion investment of $37.9 billion, which is the equivalent of the total annual sales for all black-owned businesses combined. Just competing for this business and winning 10 percent would increase the total output of America's black-owned businesses by over 10 percent. It's a goal worth going after; however, it may not exist for the black segment of this economy if the new standards go into effect. This is just the auto industry. We're busy creating alliances with the oil industry, electrical utilities, telecommunication companies, etc. The potential for economic parity and true capitalism in black communities, the missing link is before us. Viable employment through economic infrastructure in currently distressed neighborhoods is going to be the answer to improved health care, education, family values, and the decrease in hopelessness, crime, welfare, and violence. There is just no other way to do it. We've heard coming out of EPA terms such as ``environmental justice'' and ``environmental racism.'' Such terms are not accurate in their description. They imply that the evils of big business conspire in back rooms to wreak havoc on minority communities by dumping toxic and hazardous materials, etc. The coincidence of en- vironmental hazards in minority communities is a matter of economics. Property values and shifts in desirable business properties are the main reasons. Minority populations just happen to live there after a cycled geographical shift in these communities. However, if there was ever a policy or proposed regulation that could be considered directly adversarial to a particular segment of our population, we may now have it. The proposed standards are going to hit urban communities the hardest. Of the 620,000 black-owned businesses, at least 98 percent of them are located in urban areas. Hispanic and Asian businesses probably can claim the same. As mentioned above, black-owned businesses are presently at the end of the business food chain. If business suffers, black businesses will suffer the most. The main vehicle for black community development is business startup and growth. The proposed standards will become predatory to black-owned businesses in all black communities, and we must vehemently protest them. The NBCC has been quite successful since its inception in 1993. We have black church organizations, educators, political leaders, and traditional civil rights organizations talking about economics, the lack thereof, like never before. Corporate America has been waiting on black communities to focus on the principles of capitalism, which is the blood line for our future security. The time is before us, and I foresee a rapid change to economic empowerment for communities that have suffered for too long. The EPA's attitude and proposals are counter to this trend and thus pose the biggest threat. The increased cost that will pain the Fortune 500 and maim small businesses will obliterate minority businesses, especially black-owned businesses. The end result is lost jobs and the lack of capital infusion. I personally lived in Detroit and Chicago during economic downturns. What was experienced by dwellers of these urban communities and others was not a pretty sight at all. Shame on us if we allow this to happen once again because we quickly moved to make the earth pristine in a fashion that will surely hurt our economic infrastructure. Let us work in harmony toward making the environment as safe as possible without making those who have the least resources pay the most. The National Black Chamber of Commerce pleads with Congress to strongly consider the ills of the proposed standards and encourage EPA to be more thoughtful and universal in its approach. Thank you, sir. Senator Inhofe. Thank you, Mr. Alford. Mr. Herhold. STATEMENT OF FRANK F. HERHOLD, EXECUTIVE DIRECTOR, MARINE INDUSTRIES ASSOCIATION OF SOUTH FLORIDA, FOR NATIONAL MARINE MANUFACTURERS ASSOCIATION Mr. Herhold. Chairman Inhofe and subcommittee staff, good afternoon. My name is Frank Herhold. I'm the executive director for the Marine Industries Association of South Florida, which represents over 700 marine businesses. I'm also here on behalf of the National Marine Manufacturers Association, which is the national trade association representing over 1,500 boat builders, marine engine, and marine accessory manufacturers. I'm here today to explain why the EPA's proposed revisions to the national ambient air quality standards will be bad for recreational boating. What is bad for recreational boating is bad for the State of Florida and the Nation. There are currently 750,000 registered boats in the State of Florida, and the latest annual marine retail sales figures topped $11 billion in Florida. To put this into perspective, my home county, Broward County, alone, the marine industry represents a total economic output of $4.3 billion, employs almost 90,000 people, and has an average growth rate of 6.5 percent. Boating brings dollars and jobs to the State of Florida. The Clean Air Act amendments of 1990 have placed a significant technical and economic challenge on the recreational boating industry. The new marine engine regulation, marine engine emission regulation, which was finalized in July 1996, will require that all new marine engines reduce hydrocarbon emissions by 75 percent. Economic impact estimates have this regulation costing the industry over $350 million, increasing the cost per boat engine by as much as 15 percent. Regardless, we have made the commitment to bring forth a new generation of marine engines featuring cleaner technology. Additionally, the Clean Air Act will also regulate air emissions from boat manufacturing plants, with a maximum achievable controlled technology standard scheduled to be promulgated in the year 2000. This regulation will also be very costly, raising the cost of boats, thus directly reducing the number of people who can afford to enjoy boating. Needless to say, the proposed revised national ambient air quality standards will have a devastating effect on the recreational marine industry. Without drastically re- engineering American society, States will be forced to press emission sources for further reductions, many of which, like the recreational boating industry, have reached the point of diminishing returns. A couple of years ago, when the national ambient air quality standard for ozone was initially set at .12 parts per million, some State regulators in nonattainment areas considered bans on recreational boating as a method to meet the requirements of their State implementation plans. The Washington, DC, Council of Governments, COG, actually proposed a ban on recreational boating right here in Washington in 1993. This proposal raised immediate opposition from boaters, marinas, marine retailers, waterfront restaurants, and other affected groups. COG eventually reversed its decision after the affected parties spent considerable resources to educate COG as to the proposal's adverse effects. This EPA proposed revised standard will again force States to reconsider such episodic bans, and this time States may be pushed to implement episodic restrictions on recreational boating throughout the Nation. I'm appealing to you to stop EPA's attempts to revise the standards at this time. It is my understanding that the scientific studies the EPA is using to defend this proposal do not take into account either the specific constraints in air pollution or the mitigating factors that affect human health. I feel that EPA would be premature to impose such a burdensome standard without first identifying the specific benefit and real cost of the proposal. We've been hearing this element throughout the discussions this afternoon. Even if we fail to convince EPA that it is making a horrible mistake, at a minimum let us somehow prevent States from using episodic bans as a means to obtain compliance. Episodic bans will negatively affect a person's decision to first of all purchase a boat, knowing that on the hottest days of the summer our government can take away his or her freedom to operate it. Not since Congress passed the luxury tax have boaters faced, in our opinion, a more serious threat. If this standard is finalized in its current proposed form, consider the burden it will place on States, our marine industry and its workers, and the millions of people who just simply want to spend a summer afternoon on the water with their family. In south Florida we have a saying, ``Boating is the lifestyle of south Florida.'' In fact, it was on the cover of the Southern Bell phone book 2 years ago. It really is a lifestyle. In conclusion, everybody needs to realize that America's air is cleaner and will continue to improve as the benefits from recently and soon-to-be-initiated Clean Air Act regulations are realized. What we do not need now is more regulation. What we do need now is the time and resources to implement those regulations that are already on the books. Boaters want clean air and clean water, and the recreational marine industry is ready to assist both Congress and EPA in this rulemaking process. Thank you very much for the opportunity to testify. Senator Inhofe. Thank you, Mr. Herhold. Mr. Smith. STATEMENT OF JEFFREY C. SMITH, EXECUTIVE DIRECTOR, INSTITUTE OF CLEAN AIR COMPANIES Mr. Smith. Thank you, and good afternoon, Mr. Chairman. I am Jeff Smith of the Institute of Clean Air Companies, which is a national association of companies that supply air pollution control technology for stationary sources that emit all of the pollutants that contribute to PM and ozone. This afternoon I will briefly note the impact of the proposed standards on our industry and offer a few thoughts, as well, on the overall cost of the proposal. Suppliers of control technology for the pollutants that would be affected by the EPA proposal are, themselves, mostly small businesses. We employ tens of thousands of people, and these firms, in general, have suffered disappointing earnings recently, which have necessitated severe downsizing and, in many cases, job losses. The EPA proposal would benefit these businesses at an important time; thus, resolving the admittedly tough clean air issues we face in a way that protects public health and the environment has an important side benefit: it would also promote the air pollution control industry, which creates jobs as compliance dollars are recycled in the economy. This industry is currently generating a modest trade surplus, which does its part to help offset the billions of dollars this Nation is currently hemorrhaging each month on international trade, and is providing technological leadership that can continue to be deployed in the fast-growing overseas markets for U.S. air pollution control technology. Now, no one, of course, knows what the overall cost of the proposal would be, but I do think that it's well to remember several of the lessons that we've learned in the last 27 years in implementing the Clean Air Act, and one of these is illustrated, oddly enough, by my experience nearly a decade ago when I sat before various House and Senate committees and presented detailed implementation cost estimates for the acid rain provisions of what later became the Clean Air Act amendments of 1990. At that time, regulated industry claimed the removal cost of SO<INF>2</INF>, which is the leading precursor to acid rain, as well as the leading precursor to fine PM, would reach thousands of dollars a ton, while EPA claimed a more modest sum of $1,500 to $2,000 a ton was about what we could expect. I disagreed at the time, arguing that market and technical data supported a dollar-per-ton remove cost of about $500, but I was wrong, too. We overestimated the cost, as well, because today, in 1997's inflated dollars, a ton of SO<INF>2</INF> can be removed for about $110 a ton. The preeminent lesson, we feel, in our Nation's 27-year history under the Clean Air Act is that actual compliance costs turn out to be much lower than the costs predicted at the outset of a regulatory action. Why? I believe the answer is because regulated industry, markets, even the technology suppliers turned out to be a lot smarter than forecasters like myself could give them credit for being at the outset of a regulatory action. I think this is going to be even more true in light of today's emphasis on flexibility, market-based compliance, and pollution prevention. Those who would predict gargantuan cost impacts for EPA's proposal I think ignore this important lesson and also under- estimate the wisdom of State and local officials who, after all, will be on the front lines implementing these standards. Everyone has an interest in rational, prudent, cost- effective clean air policy, and the cost-effectiveness of various compliance options will be considered during implementation, and there is no reason not to believe that, as has always been the case, all of us--regulated industry, government officials, technology suppliers--will discover ever- more cost-effective compliance solutions, especially since nearly a decade exists between now and when the impact of the standards would be felt. For our part, members of the Institute, the air pollution control technology industry, continue to invest in our research and development to improve removal efficiencies while lowering costs and simplifying operation. We have to. The air pollution control tech- nology is innovative and highly competitive, and improvements in cost-effectiveness are what give business or technology a competitive edge over another. In this respect it's a little bit like the personal computer industry. In closing, the Institute expresses its appreciation to you, Mr. Chairman, and the subcommittee for providing a forum for dialog on this important issue and for letting this industry participate in this hearing. If EPA's proposal to revise the PM and ozone health-based standards goes forward, the U.S. air pollution control industry is ready to do its part to help our Nation achieve its goals cost-effectively. Based on historical precedent, the current pace of control technology innovation, the use of market-based incentives, the years between now and the compliance deadlines, and competition within the air pollution control technology industry and among technologies, we are confident that the actual cost of compliance will be less than most of us today imagine. Again, thank you very much, sir. Senator Inhofe. Thank you, Mr. Smith. Mr. Heilman. STATEMENT OF GLENN HEILMAN, VICE PRESIDENT, HEILMAN PAVEMENT SPECIALTIES, INC., FOR NATIONAL FEDERATION OF INDEPENDENT BUSINESS Mr. Heilman. Thank you, Mr. Chairman, and good afternoon. My name is Glenn Heilman, and I'm a vice president of Heilman Pavement Specialties, Incorporated, which is a small, family-owned business that has been in operation for 41 years. We are located in Freeport, PA, which is just above Pittsburgh. Thank you for giving me the opportunity to testify on behalf of the National Federation of Independent Business regarding the recently proposed national air quality standards for ozone and particulate matter. In addition to being a small business owner, I also volunteer and serve as chairman of Pennsylvania's Small Business Compliance Advisory Panel. This panel is mandated by section 507 of the Clean Air Act amendments to help small businesses as part of the Small Business Stationary Technical and Environmental Compliance Assistance Program. This program has been enormously successful, despite under- funding, and has become a model for small business programs and other environmental legislation. Our small business program conducts seminars, offers a toll-free confidential hotline, low interest loans, and many other outreach efforts for small businesses. Every State has such a program in varying degrees of effectiveness. These programs are valuable tools to improve our air quality and are overseen by the Environmental Protection Agency. In my position as chairman, I am keenly aware of the progress we're making in cleaning our air. What appears to be ignored is that our air quality has improved significantly since the passage of the Clean Air Act, and the 1990 amendments have not even been fully implemented. It is, therefore, imperative that only requirements that are essential be mandated. What I suggest is that we move toward more complete compliance with existing standards before revising them. As a small business owner, the economic impact and burdensome regulations of the proposed standards would significantly affect and threaten the livelihood of my business. As a manufacturer of road pavement, my business operates asphalt plants and hauls stone as raw material. The moving of equipment and material creates minor particulate matter. I also have air emissions from my heavy truck and off- highway equipment. Some of this equipment is old but works well, and I simply could not afford to buy new equipment to comply with the proposed regulations. As a small business owner, I'm active and involved because I have to be. Careless regulations will put me out of business. Not only will small business owners lose life savings and investment, but our employees lose their jobs and our communities suffer economically. For that reason, I am shocked and I'm disappointed that the EPA has declined to consider the effect of this proposed rule on small business. Last year Congress passed and the President signed a law that requires the EPA to assess the impact of regulations on small business. To date, the EPA has refused to do this on the ozone and particulate matter study. Because this regulation is likely to have a great impact on a variety of small businesses, I hope that the EPA will carefully consider the consequences before they impose this new standard. Rather than implementing new regulations for clean air, I recommend utilizing and encouraging the use of present means to achieve air quality improvements. There are technologies presently available to help clean our air. In our company, we voluntarily look for ways to improve the environment. In 1980, my father developed a new ozone-friendly technology for asphalt roads. This technology is exemplified in a material called ``HEI-way General Purpose Material'' or HGP. A 2-year university study documents that HGP emits seven times less VOC--Volatile Organic Compounds--in the form of low molecular weight normal and branched alkane hydrocarbons than the present technology used to pave roads. Additionally, this technology also eliminates a significant water pollution threat to rural streams and wetlands. Under standard technology, present road paving materials allow more than 1,000 gallons, or three tons of gasoline-type VOC to evaporate into our troposphere for every mile paved. HGP reduces this VOC air pollution by 85 percent. On a nationwide basis, of the nearly four million miles of roads in the country, this technology is applicable to over 60 percent of them. In Pennsylvania, alone, if just 1 percent of the roads were paved each year with HGP instead of the standard technology, over 3,000 tons of VOC air pollution would be eliminated. The HGP technology could be more widely used to lower VOC air emissions as soon as EPA allows for discreet emission reduction credits under the new source review. In closing, it is important to keep in mind the unique nature of a small business owner when examining our reaction to environmental legislation and regulation. Small business owners wear many hats. Two of the most important are being both a business owner and a citizen of the community. We drink the water, we breathe the air, we fish the lakes. We want to help the environment for ourselves and our children; however, we also expect the Government to be fair and responsible. The new regulations as proposed by EPA for ozone and particulate matter are unnecessary and they will result in an enormous regulatory burden and threaten a business that my family has spent 41 years to build. A viable framework is in place. It consists of new, environmentally friendly technologies such as HGP, and couples these initiatives with existing programs. The system is working. Let's use what we have. Thank you, Mr. Chairman. Senator Inhofe. Thank you. Mr. Heilman, let me kind of start with you here. Your comments are both as a small businessman and representative of the position of the NFIB; is that correct? Mr. Heilman. Yes, it is, sir. Senator Inhofe. And the NFIB I know is--I had an occasion to talk to some of their staff here in Washington. They're very much concerned about it. I'd just like for the record, since I'm very much concerned about the Small Business Review Act--I was involved in that when we passed it, and the whole idea was to be able to quantify the effect on small businesses before we promulgate or propose rule changes. I would assume, from your statement, that you don't believe that they complied with that act? Mr. Heilman. No, I don't believe that they have done any of the regulatory flexibility act analysis. Furthermore, no small business review panels, as I understand, are to be conducted. They have not been done. In doing so they, in my opinion, dropped the ball. Let me tell you that in my business, as far as looking at the cost in retrofitting our diesel trucks and putting in some dust control at $15,000 a truck for our small business at seven trucks, that's over $100,000, and our dust control would be over $20,000. That would be very prohibitive for us to go out and hire new people at those costs. Senator Inhofe. I think you've also taken the position that if we continue just under the standards there today and the efforts that people are making on both a voluntary and a mandatory basis, that the air is getting cleaner. Mr. Heilman. No question. We have a long way to go with these compliance advisory panels that each State has. Senator Inhofe. Mr. Alford, I heard you say that 98 percent of the businesses, but I didn't get the number of businesses you were talking about. Mr. Alford. It's 620,000 black-owned businesses per the U.S. Bureau of Census for 1992, and of that, if we look at the industry, 98 percent of that 620,000 are in urban areas. Senator Inhofe. Did it also say about how many people that affects? I mean, did it have an average size of those 620,000 businesses? Mr. Alford. Yes. The mean, sir, would be 32.5 billion divided by that 620,000. Senator Inhofe. All right. Mr. Alford. I've got my calculator. Senator Inhofe. That's a job for the staff. I'm sure they've already got that done. You also mentioned the environmental justice program. This does bother me a little bit. Do you know whether Agency has actually looked at the impacts in regard to the environmental justice, that term we used? Mr. Alford. We had a meeting. The Hispanic Chamber of Commerce had representatives, the National Indian Business Association, and the National Black Chamber met with Administrator Browner. And when I brought up the term ``environmental justice,'' truthfully she just became very condescending, almost indignant, I guess, to where black businesses fit in this picture and started talking about jobs that had been created through her efforts of brownfields. I asked for that documentation, and that was about 2 months ago, and I still haven't received it. Senator Inhofe. You said there were two other groups? Mr. Alford. The Hispanic Chamber of Commerce, which represents the Hispanic business community---- Senator Inhofe. And the other one? Mr. Alford [continuing]. And the National Indian Business Association. Senator Inhofe. OK. Do they share your sentiments, and would they endorse your testimony today? Mr. Alford. Absolutely. Senator Inhofe. OK. Mr. Alford. Absolutely. Senator Inhofe. I know you don't have information there, but for the record I would like to know what the statistics show that membership--the number of companies that would be involved there, too. Mr. Alford. Sure. Hispanic businesses--I'd better look it up and provide it to you. Senator Inhofe. You can get that for the record at a later time. Let me just ask you this. What do you think would have the greatest impact on health--economic development and jobs or these standards? Mr. Alford. If you've got money you can provide insurance and good health care for your families. You can also send your kids to school. Senator Inhofe. Well, I appreciate it very much. You've brought a different perspective that I was not aware of. Mr. Herhold, you talk about your position is that the national ambient air quality standards should not be revised. Is the basis of your argument that the regulation is going to cost too much? If so, how do you place a price tag on it? Mr. Herhold. First of all, let me just say, as a citizen, I strongly support clean air and don't think we can or should put a price tag on it. But, as a businessman, I understand that for anything to work you need to have a return on your investment. Sometimes you can spend a lot of time and money on something and accomplish nothing. Finally, as a boater, I can tell you that boaters demand no less than clean air and clean water, and anyone who works on the water or recreates on the water is a very environmentally sensitive, very environmentally tuned individual. In short, boaters will always vote for the environment. In answer to your question, no, I don't think we can put a price tag on clean air. Senator Inhofe. Are all boaters fat cats? Mr. Herhold. No. Senator Inhofe. I spent 40 years in aviation, and there always is this myth that floats around out there that all people in aviation--it's really a cross-section of America, and I would assume that boaters fall in that same category. Mr. Herhold. You know, family recreational boating is as affordable as a second car. The real problem is a boat is purchased with discretionary income. People don't need boats like they need that first car, that second car, and they won't purchase a boat until they have the financial security, peace of mind that comes from, ``Hey, I need some relaxation. I've got some money in my jeans. Let's go out and purchase a boat.'' Senator Inhofe. Yes. There was a study done that was really revealing, I thought, back during 1993 when the Administration was proposing a very large luxury tax on both airplanes and boats, and it shocked a lot of people to see that they're not just talking about fat cats, as the Administration was implying. Mr. Herhold. The lesson of the luxury tax was that the boaters voted with their pocketbook. They just simply didn't buy boats. I mean, that wasn't the way it was supposed to work, from the Government's point of view. But they either bought boats offshore from other countries and kept them offshore, which was damaging, or they just simply didn't buy them, or they kept the old boats. Normally you upgrade every 3 years or so. Senator Inhofe. It's a jobs issue? Mr. Herhold. Yes. Absolutely. Senator Inhofe. Mr. Smith, I couldn't help but think--and I appreciate your very straightforward testimony and honesty that perhaps you could be a beneficiary of this if it came through. It's a little bit like H&R Block testifying to the Ways and Means Committee to complicate the tax forms. [Laughter.] Mr. Smith. I think probably, quite apart from any parochial benefit to our industry, though, is the essential point in looking at cost, as you said in your opening remarks, that I think we are benefited by looking at the history of implementation of the Clean Air Act and the way those costs have gone. Actually, I think that the control technologies that will be used--it's almost impossible to speculate what they'll be. They'll be site-specific. The city of Benton Harbor and the State of Michigan and others will come up with control technologies that would suit the circumstances. But I do think that probably the predominant way of compliance will be through pollution prevention approaches, eliminating the pollution in the first place, perhaps through devices and technology such as Mr. Heilman just mentioned. This is the first time I heard that. I think, with regard to technology, in a lot of cases, Mr. Chairman, it's just going to be upgrading of existing technology rather than installation of new technology. Senator Inhofe. Yes. Mr. Smith. Which is not good news for our industry. But I do appreciate that. Senator Inhofe. I was saying that in jest, and I think you know that. But I also wonder, because at previous hearings we've talked about this getting to PM<INF>2.5</INF>, that the technology and the monitoring device and all that isn't there. You're in the business of getting people to comply and to clean up the air, which is good. I'm glad you're doing that. But if the technology is not there and the capability is not there to monitor for 2.5, how would you go about cleaning it up? Mr. Smith. My understanding from the technical experts in the industry is that this would not be a technology-forcing proposal. If you look at the fine PM, for example, in the eastern part of the United States, according to the EPA data, a lot of it is formed through emissions of sulphur dioxide and nitrogen oxide, which we have a very long record in controlling cost-effectively. Senator Inhofe. Yes. All right. Well, I appreciate very much the time that you have given. You've certainly given a very broad perspective. I have to say, back when I was mayor of Tulsa, Mr. Alford, Coleman Young and I became pretty close friends, and he familiarized me with some of the problems of which I was not familiar at that time with some of the large metropolitan areas, and the statistics that you have given us would be very, very helpful. I think also the previous panel, in hearing testimony from the unfunded mandates, all too often, even though the law should have covered the private sector as well as political subdivisions, that was something we were able to get through, but we do intend to do it because I know it is significant. Unfunded mandates are just as damaging to the private sector as they are the public sector. We thank you very much for coming. There will be more questions that will be forwarded to you to be answered for the record. We appreciate your being here very, very much. Thank you. We are now in recess. Thank you very much. [Whereupon, at 4:42 p.m., the subcommittee was adjourned, to reconvene at the call of the chair.] [Additional statements submitted for the record follow:] Statement of Emma Jean Hull, Mayor, Benton Harbor, MI Good Day Ladies and Gentlemen, my name is Emma Jean Hull, Mayor of Benton Harbor, Michigan, and Treasurer of the National Conference of Black Mayors, Inc. and a member of its standing committee on Environmental Justice. Benton Harbor is located on the shores of Lake Michigan just an hour east of Chicago, Illinois and 45 minutes from Gary, Indiana. It is a minority/majority community with a population of 12,818, 97 percent African American, 40 percent under the age of 18. Benton Harbor through local partnerships with business and industry is just beginning to address some of the nation's highest at-risk factors in crime, unemployment and school-drop outs. Our success to date relies on local initiatives to retain, attract and grow small businesses, address workforce development and deal with environmental concerns-- mostly related to our brownfield redevelopment projects. some examples of benton harbor's local partnership efforts The city works in partnership with: <bullet> Northside Business Association (27 minority businesses working with the chamber to promote minority leadership) <bullet> SBA Technical Assistance Project (Lake Michigan College, Cornerstone Alliance, a local non-profit economic development corporation and city working to make individuals and small businesses bankable) <bullet> Community Renewal through the Arts (28 area arts groups using the creative arts industry for economic development) <bullet> Micro Loan Program (4 local lenders provide startup moneys for self sufficiency through self employment) <bullet> Benton Harbor Skills Center (Benton Harbor Area Schools and Cornerstone to provide basic job and life skills training) <bullet> Community Partnership for Life Long Learning (all area school systems working toward school to work and career based curriculum) <bullet> Site Reclamation Grant to Redevelop Harbor (the State of Michigan and Alliance for multi-modal transportation center) <bullet> Site Reclamation Grant for Buried Tank Removal (the State of Michigan) <bullet> Purchase and Demolition of Deteriorated Industrial/Commercial Buildings (the State of Michigan and Cornerstone Alliance) In the late 1970's and early 1980's, Benton Harbor saw the loss of over 3,000 manufacturing jobs with major plant closings in the steel, appliance and automotive industries. The remaining empty, deteriorating and in some instances contaminated buildings form both the core of our environmental problem and Benton Harbor's redevelopment potential. With passage of the 1990 Clean Air Act and the establishment of that year as the base line for attainment, my city was put at an immediate and distinct disadvantage. In 1990, Benton Harbor was at its lowest point for industrial activity. This artificially low standard for air quality, applied nationally without regard to local circumstances, is magnified by our proximity to both Chicago and Gary and the prevailing westerly winds. A fact that impacts the expansion of existing business and inhibits the location of new business in Benton Harbor as well. The proposed and more stringent ozone standard and new PM standard for particulate matter emissions if implemented will directly impact on my community's efforts toward sustainable economic growth and development. The small businesses affected, many for the first time, like printers, bakers, service station operators and construction firms are the foundation of growing ranks of Benton Harbor's minority entrepreneurs. The anticipated higher production and operations costs required by the proposed standards coupled with regulatory burdens can restrict these businesses' expansion, impact their capital expenditures and eventually affect the jobs of many of our community's residents. This problem is only magnified when applied to new larger businesses. The ability to attract major new business and industry to brownfield sites is difficult. Benton Harbor and the Nation does not need any additional impediments. Legislation is meaningless, unless implementation at the local level is assured. I support clean air and the intent of the Clean Air Act of 1990. I only ask that its implementation and any proposed change be fair, balanced and sensitive to the relationship between local government, industry and business--especially, as in Benton Harbor's case, small business. Partnership is a requirement of change. Please consider the impact the proposed changes will have on the local partnerships my community so desperately needs. Thank you for this opportunity to address this matter today. 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Billings, Delegate, Maryland General Assembly Mr. Chairman, I am a State legislator with a unique perspective. Not only do I live in the suburbs of the nation's capital, but I spent 15 years on the staff of the U.S. Senate, 12 of which were as staff director of this Subcommittee when it was chaired by Senator Edmund S. Muskie of Maine. I represent the legislative district which reaches from the District line several miles into Maryland on both sides of Connecticut Avenue. While it is considered a wealthy district, it is quite economically and ethnically diverse. It has some of the highest incomes in Montgomery County and some of the lowest. My constituents are very strongly committed to environmental protection. I would hazard a guess that my constituents care at least as much about the Chesapeake Bay as people who depend on a healthy Bay environment for their livelihood. My constituents also care very deeply about the quality of the air we breathe. As a measure of concern, Mr. Chairman, I would point out that during the entire controversy surrounding Maryland's newly required enhanced motor vehicle inspection program, I did not receive a single communication from any constituent protesting the new dynamometer test. In fact, nearly 50 percent of Montgomery County motorists voluntarily take the dynamometer test. So, perhaps it will not surprise you that I support these new, more strict ambient air quality standards--as a good representative of my district. I say this because air pollution's victims often are those least able to defend themselves--the very young, the chronically ill, the elderly. I also support them as a grandfather of four and, because I am now classified as an ``older American,'' I support them for personal reasons. The State of Maryland has done a great deal to clean up its air pollution. We've had centralized auto emission testing for 17 years and voluntary dynamometer testing for more than 2. Our power plants and factories have made great strides toward reducing emissions as their part of complex plans to achieve current ambient air quality standards. Many businesses and industries in Maryland believe that they are being required to make extra investments to control pollution because large industrial sources and power plants in Virginia, West Virginia, Ohio, Indiana and Pennsylvania are doing too little to control their emissions. These Maryland businesses have argued against further reductions in emissions from Maryland sources until something is done about these big polluters to our west and south. Thus, for the people of Maryland, these new standards have two important benefits: 1. They will provide additional health protection for our citizens, especially our children and our elders; and 2. They could reduce the burden on Maryland businesses by more fairly allocating the responsibility for cleanup to the large sources-- sources that today are uncontrolled or poorly controlled--sources whose emissions are transported to us from other States to us. It is interesting to note that the people who challenge these new standards generally are not scientists but representatives of institutions that pollute. American business and industrial interests simply don't want to pay more money to achieve a greater level of pollution control. But that is nothing new. I began my service to this committee in 1966. Every single environmental proposal this Committee recommended to the Senate, usually unanimously, was met with the charge that it was too expensive. In 1970, then-Ford executive Lee Iacocca called the Clean Air Act ``a threat to the entire American economy and to every person in America.'' He was wrong, of course. Today's cars are marvels of engineering. And the Big Three automakers recently announced first quarter profits totaling more than $4.5 billion. The rhetoric in today's debate is much the same. What is new is the 271 peer reviewed air pollution health studies EPA evaluated prior to proposing the new standards. What is new is there is so much science to support standards. When the first Federal air quality information was published in 1966-67, there was a crescendo of criticism regarding the adequacy of data. Compared to today's information base, those critics were on sound ground. Mr. Chairman, in this context I would like to make an historical point. I find it ironic that the National Association of Manufacturers and its allies are protesting these new national ambient air quality standards. Prior to 1970, ambient air quality standards were adopted by localities in their air quality control regions based on citizen input and local perceptions of the threat of air pollution. That process proved unacceptable to industry because the standards proposed were often more strict than might be indicated by the federally published air quality criteria documents. In 1970, the Nixon Administration proposed and Congress adopted national ambient air quality standards. The decision to adopt national ambient air quality standards was widely advocated and supported by the nation's major polluting industries. They were the ones who wanted to use government science as the basis for air quality standards. They were the ones that wanted EPA to adopt the air quality standards. They were the ones who wanted to avoid the proliferation of and often differing air quality standards around the country. Now EPA is doing the job that business wanted and Congress adopted in 1970. And now NAM and its allies don't like the result so they want to change the rules of the game. EPA has nearly 30 years of experience and, as many lawsuits have affirmed, it is good at its job. I would encourage this Committee to tell the NAM and the Citizens for a Sound Economy and the various other groups who have lined up on the anti-clean air bandwagon to quit trying to change the rules that they helped make. Their opportunity to affect the cost of achieving these standards will come in the implementation phase. We are currently in the information stage. And the American people have a right to know the levels of air pollution which affect their health. Congress has never compromised this right to know. Congress has on two occasions, 1977 and 1990, provided more time to implement health based standards--in 1977, up to 10 years more; and in 1990, up to 20 years. But Congress has never bowed to pressure to compromise science. To do so would make a process of public health protection political rather than scientific. EPA has evaluated the science and proposed its judgment. The appropriate focus for this Committee and the Congress will be to assure a balanced and timely implementation of the standards that recognizes the economic needs and interests of industry and the need that millions of vulnerable Americans have for protection from the impact of smog on their lives. Congress has been doing that job for 30 years. We have proved that we can have a healthy and growing economy while moderating the health impact of pollution. And we have done so without compromising the public's right to know what healthy air ought to be. Thank you. ______ House of Delegates, Annapolis, MD, May 16, 1997. Hon. James M. Inhofe, Chair, Subcommittee on Air, Wetlands, Private Property and Nuclear Safety, Committee on Environment and Public Works, U.S. Senate, Washington, DC. Dear Senator Inhofe: Thank you again for the opportunity to participate in your recent hearings on the newly proposed national ambient air quality standards. I particularly appreciate the opportunity to respond to the questions Senator Baucus submitted in writing. Answer to Question 1. Prior to 1970, the Federal Clean Air Act provided for the consideration of economic and technological feasibility with respect to a number of the regulatory requirements authorized. The 1970 Act eliminated considerations of economic and technical feasibility with respect to most regulatory authority which impacted on health standards. But in the history of Federal clean air law there has never been any economic feasibility analysis required of the health-related ambient air standards, though from time to time that has been proposed unsuccessfully by polluting industries. The most significant debate over including a cost factor with respect to ambient standards occurred during the debate over the Public Health Service's publication of an Air Quality Criteria document for sulfur dioxide. Coal and related industries argued that publication of data on the effects of sulfur dioxide on health should be accompanied by an analysis of the cost of achieving levels of air quality which would reflect those criteria. To the best of my recollection, this proposal never advanced to the stage of a legislative amendment because it was absurd on its face, as has been the discussion of cost in association with the current ambient air quality standards. While the terminology has changed over thirty years, the facts remain the same: air quality standards are nothing more or less than the best professional judgment of the Environmental Protection Agency and its scientific advisors on the levels of air pollution at which health effects occur. Senator Muskie and his colleagues on the committee on which you now serve unanimously agreed time and again that the public had a right to know the level of air pollution at which their health may be put at risk. They also unanimously agreed that when regulators and the Congress decided how and when those standards would be achieved, that would be the appropriate time for consideration of economic and technical feasibility. As Senator Howard H. Baker stated at a hearing on air quality standards on July 29, 1968: ``Air Quality criteria are intended to delineate, on the basis of the best available scientific and medical evidence, the effects of individual contaminants, combinations of contaminants, or categories of contaminants or the constantly changing, somewhat indeterminate environment of man. Thus, economic and technological considerations are not relevant with regard to the establishment of ambient air quality criteria; they will be given full attention in the standard-setting procedures.'' Answer to Question 2. As I indicated in my testimony, prior to 1970 the Federal air quality criteria information (the data which indicated what scientists said were the levels of air pollution at which health effects occurred) were made available to State and local air pollution control agencies for the purpose of determining air quality standards and establishing implementation plans. A review of the hearings held in the late 1960's and early 1970's by the subcommittee which you now chair would reveal that not only did community-based air quality standards decisions result in very rigorous demands for protection from air pollution, but they triggered a significant level of citizen activism. ``Citizens for Clean Air'' groups sprang up across the country. In the eyes of many, air quality standards became a political decision, not a health-based scientific judgment. The Nixon Administration, responding to the business community, decided that a Federal Government scientific judgment was preferable to the politically powerful clean air demands of citizen activists. The result was the 1970 Act provision for national ambient air quality standards. Thus, because the national ambient air quality standards are a product of a Republican President responding to demands of the business community, you can appreciate why I find today's opposition to national standards by the business community and many Republican leaders to be so ironic. I hope these answers are responsive to your needs. If I can be of further assistance, please let me know. Sincerely, Leon G. Billings. ______ Prepared Statement Hon. Richard L. Russman, State Senator from New Hampshire Mr. Chairman and members of the subcommittee, my name is Richard Russman, and I am a State senator from New Hampshire. I want to thank you for this opportunity to testify about the clean air standards for ozone and particulate matter that have been proposed by the Environmental Protection Agency (EPA). As you know, New Hampshire is one of the northeastern States that is affected by ozone transport, so we have a very strong interest in seeing action taken to address the emission of precursors that lead to ozone formation. The respiratory problems caused by excessive ozone exposure will continue to plague the citizens of my State, not to mention the health of natural resources, if action is not taken. In addition, I believe the people of New Hampshire agree that the threat of fine particulate matter must be addressed, as called for by the American Lung Association and our Governor, the Honorable Jeanne Shaheen. I understand that this subcommittee is concerned about the process undertaken by the EPA in promulgating rules to address ozone and particulate matter problems. Let me say at the outset, I am a proponent of the proposed rules and believe the EPA is going about the process of issuing final rules in a responsible manner. These standards must be established by relying on health based criteria only; that is very specific in the Clean Air Act. Recently, the National Conference of State Legislatures (NCSL) sent a letter to Ms. Mary Nichols, Assistant Administrator for Air and Radiation at EPA, citing numerous problems with the issuance of the proposed rule and compliance with Federal statutes and executive orders. I disagree with the premise and findings of that letter and, as the core of my testimony, I will explain my reasoning to the members of the subcommittee today. First let us remember that this is a proposed rule--not final. Many of the arguments raised against the rule are based on the requirements necessary when an agency promulgates a final rule. For that reason alone, many of the arguments raised by the NCSL have no validity. Second, many opponents criticize EPA for not seeking outside opinions or consultation with the States. Nothing could be further from the truth. Since February, 1994, EPA Administrator Browner has been seeking the advice of affected parties on the issuance of these rules. Under the authority of the Federal Advisory Committee Act (FACA), EPA established working groups to address ozone, particulate matter and regional haze problems. These working groups depend upon the opinions of State and local governments, industry, small businesses and other interested parties to formulate strategies for attainment. These strategies are designed to help States with implementation programs, which are solely a State and local government responsibility. I do not believe the EPA simply is passing the buck when they claim they are not demanding specific regulatory activities. As you know, the EPA grants authority to the States to implement the rules as they see fit through a State implementation plan. The NCSL recognizes this in its letter to the EPA, stating that implementation of the Clean Air Act is being carried out by State and local governments.'' I don't believe it would be a stretch to say that the Congress and much of the country would be up in arms if the EPA directed the specific actions that States and localities must take. States have asked for and been given authority to implement many Federal regulations. This is one of those cases where granting primacy (regulatory authority) has and should continue to work. In addition to bringing in the views of affected parties through the FACA process, EPA extended the comment period on the rule for 21 days. That extension has allowed more than 40,000 comments to be received via the mail and nearly 18,000 phone and electronic comments to be delivered. The date for issuing the final rule also was extended after a request by the Administrator. It is important to note that the opponents of the rule were the primary constituency asking for that extension. In response to this, Ms. Browner returned to the judge who issued the initial ruling on particulate matter and petitioned for the delay. Finally, since issuing the proposed rules, EPA has expanded the representation on the PACA working groups to include more representatives from local governments and small businesses. These actions were not required, but were carried out by the EPA to ensure adequate input from those expressing most concern. Not once in their letter does the NCSL recognize these ongoing efforts. With the chairman's approval, I would like to submit for the record the membership of those working groups so that members of the committee will have an idea of the access that various interests have had to the rulemaking process. One concern raised by the NCSL letter that I would like to reinforce to you is the issue of funding. We all agree there will be some costs in implementing these rules, although those costs are several years away. With this in mind, the concern about section 105 funding, which provides technical and financial assistance to States, is one that is universal among States. Realizing the role that States and localities play in implementing the nation's environmental laws, I hope the Congress will see the wisdom in providing adequate funding to the EPA to assist in this implementation. While I am not a member of President Clinton's party, I would like to state that I commend him for the efforts he has made to reform the regulatory process. Since 1993, with the issuance of Executive Order 12866, this administration has made a concerted effort to streamline regulations and to provide justifications for rulemaking. While cost benefit analyses are not a criteria of the Clean Air Act, the EPA complied with the Executive Order and provided the necessary justifications, including analyses of costs and benefits, to the Office of Information and Regulatory Affairs (IRA) at the Office of Management and Budget (OMB). Your committee and the entire Congress has access to these documents, which I suspect are more thorough than documentation for any other rule the EPA has ever promulgated In addition to administrative efforts to improve regulatory efficiency, the Congress passed and the President signed numerous pieces of legislation, specifically the Small Business Regulatory Enforcement and Fairness Act (SBREFA), that create obligations for the agencies in establishing rulemaking and give the Congress on oversight role before major rules can go into effect I believe this is an appropriate role for the Congress to play, and I think that is one reason that we are having this debate today. However, I do not believe the Congress should try to inject false arguments into the debate when the Clean Air Act is very specific-- rules are to be promulgated following health based standards, which are to be reviewed at least every 5 years. In this case, the statute has been backed up by the courts regarding standards for particulate matter. The regulatory impact analysis prepared by the EPA attempts to quantify benefits that sometime cannot be quantified, yet the estimated benefits far outweigh the overall costs. The Federal Register notice on the proposed rule states clearly that the regulatory impact analysis for the rules ``will be available at the time the implementation strategy is proposed.'' I fully expect the analysis to be available and comprehensive when the final rule is issued. The EPA has focused on health and the primary standard. I have come to the realization that the secondary standard, welfare, might provide significant additional benefits if those were quantified. Regardless, efforts to meet the primary standard also will benefit the welfare of Americans. As you know, vegetation is harmed by ozone exposure. Unlike most susceptible human populations, it has few means of staying indoors. Agriculture and tourism continue to be the major economic indicators for many districts in this country represented by members of this committee. I am disappointed to see the agricultural community oppose the rule because increased incidences of high ozone exposure have reduced some crop outputs by more than 10 percent. Indeed, CASAC unanimously recommended that EPA adopt a secondary standard for ozone more stringent than the primary standard. In addition, forest ecosystems from the southern Appalachians to the northern Adirondacks are threatened by high levels of ozone. Many States promote their natural areas for tourism, yet these beautiful mountains so far removed from urban settings are threatened by the precursors of ozone and the resulting ``burn'' that occurs at higher elevations. The benefits of protecting agricultural production (including timber) and tourism economies will be well worth modifying emissions standards for all the communities that depend upon these natural resources to support their economies. These impacts and benefits must be considered in any discussion of costs. I also would like to submit for the record, with the chairman's approval, the recent findings of the Northeast States for Coordinated Air Use Management. These findings back up the need for more stringent ozone standards. In the case of standards for particulate matter, I believe the benefits will be substantial. I find it distasteful to try to quantify the value of a life, let alone trying to do it for 15,000 individuals. The premature death caused by particulate matter and the debate surrounding the impacts reminds me of the debate about cigarette smoke. Scientist after scientist testified that smoking did not cause lung cancer and that epidemiological tests could not show causality. Just as we reached a clear indication with cigarette smoke, the data now supports the link between particulate matter and respiratory illness. Since the 1970's industry has tried to analyze the costs of complying with environmental regulations. I don't believe it has ever made accurate estimates. Will there be some costs in implementing these regulations? Yes, and the EPA has made the best estimates available given the uncertainties of how the rules will be implemented at the local level. In establishing the health based standards, EPA should not consider costs. In considering implementation strategies, EPA should and has consulted affected parties to consider costs, even before they have issued a final rule. I will remind you of the excessive costs estimated by the utility and industrial sector during the 1990 Clean Air Act debates. We all know that those horrific scenarios did not and will not play out. Nor has the American economy gone down the tubes, if you will excuse the expression. On the contrary, technology has expanded to meet industrial demand, and States have found innovative and cooperative ways to meet attainment standards. We may not be able to reach 100 percent attainment compliance in the next 10 years, but the effort to achieve those standards will be of value to every man, woman, and child in this country. That is a significant benefit. In conclusion, Mr. Chairman, we have in place a regulatory system that is more scrutinized today than at any time in recent history. I believe that is a good thing. But I also believe that when agencies are following their mandates, they should be given the necessary support to implement the laws the Congress has passed. That concludes my testimony. Thank you again for the opportunity to participate, and I will be happy to answer any questions from members of the committee. [GRAPHIC] [TIFF OMITTED] T6586.325 [GRAPHIC] [TIFF OMITTED] T6586.326 [GRAPHIC] [TIFF OMITTED] T6586.327 [GRAPHIC] [TIFF OMITTED] T6586.328 [GRAPHIC] [TIFF OMITTED] T6586.329 [GRAPHIC] [TIFF OMITTED] T6586.330 Prepared Statement of John Selph, Tulsa County Commissioner, Oklahoma Mr. Chairman and Members of the Committee, my name is John Selph. I am a member of the Board of Directors of the National Association of Regional Councils (NARC) and I chair NARC's Air Quality Task Force. I am chairman-elect of the Indian Nations Council of Governments (INCOG), the Metropolitan Planning Organization for the Tulsa area, and I chair INCOG's Air Quality Committee. On behalf of NARC, I appreciate your invitation to testify before the Subcommittee regarding the U.S. Environmental Protection Agency's (EPA) proposed changes to the Clean Air Standards. The National Association of Regional Councils represents some 300+ councils of government consisting of cities, towns and counties in metropolitan and rural areas from throughout the United States. These regions run the gamut from areas in severe non-attainment to regions that have always been in attainment. My comments reflect the policy positions developed by NARC. My comments also draw from my experience as a County Commissioner in Tulsa, Oklahoma and my academic background, which includes a Masters Degree in Public Health with an emphasis in Environmental Sciences. Before I discuss EPA's proposed standards, let me tell you a little about Tulsa and our experience with air quality. Tulsa County was a non-attainment area until 1990. We worked very hard locally to achieve attainment status, and our county achieved attainment status prior to the signing of the Clean Air Act Amendments in November, 1990. It was very important for us to avoid the stigma associated with being on the EPA non-attainment list, especially for economic development purposes. Since that time, we have worked even harder to maintain our clean air status. While our efforts have been wide- ranging, perhaps most notable was the creation of the nationally recognized Ozone Alert! Program, the nation's first voluntary episodic emissions control program. This program reflects our philosophy of seeking voluntary, common sense measures that are most effective in improving air quality, rather than the command and control approach too often used by the State and Federal regulators. Let me also say that both NARC and I recognize the importance of improving air quality, and we support actions to maintain and improve the health of all citizens when such actions are based on sound scientific and economic principles. In light of this, we are especially concerned about the conflicting opinions of the scientific community regarding the scientific basis for establishing new Ozone and Particulate Matter standards. There appears to be no scientific consensus that changing the standards at this time will result in significant public health benefits. Indeed, the scientific testimony presented previously to this committee, and the recently revised EPA exposure and risk assessment fundings, underscore this lack of consensus. EPA has stated that the proposed changes are policy-based rather than science-based. EPA also has stated that it believes existing clean air law requires that its analysis of the impact of the changes be based solely on the health aspects, and that adverse economic consequences that may result from the changes may not be considered in setting the standard. In light of these concerns, we feel that considerable additional research, including additional epidemiological studies, are necessary before new ozone and particulate matter standards are promulgated. Specifically, future epidemiological studies should focus on the interaction between different pollutants and whether these effects are additive, synergistic or antagonistic. The Clean Air Act has clearly had a demonstrable impact on reducing pollutants, thus improving air quality for all Americans. If EPA imposes its proposed ozone standards, the number of non-attainment regions nationally will increase, by EPA's own estimates, from 68 areas currently to 185 areas--nearly a threefold increase. EPA's action of designating additional areas as non-attainment will do nothing to improve air quality in our most polluted regions. In fact, these existing non-attainment regions are having great difficulty in achieving the current standards, so forcing a mid-course change at this time will only delay and disrupt both public and private initiatives designed to achieve the objectives of the Clean Air Act. Furthermore, we are not convinced that the technology is in place, or even close at hand, to help us meet these proposed standards. With regard to the Proposed PM<INF>2.5</INF> standards, we believe that EPA lacks sufficient scientific evidence to justify revising the existing Particulate Matter standard. Although the scientific evidence does suggest some preliminary correlation of health effects, it is as of yet inconclusive. The current studies have not clearly defined public health effects from fine particles well below the existing standard. Additionally, the significant uncertainty and limited research regarding ambient concentrations of PM<INF>2.5</INF> due to the limited number of ambient air monitors in place support our concerns about the addition of this standard. We feel that in light of these concerns, which were substantiated at previous subcommittee hearings, considerable further study is necessary before an additional particulate matter standard is promulgated. To this end, we are pleased to note that EPA has requested $28.4 million for particulate matter research. Our experience in Tulsa has shown us that the goal of improving air quality is both worthy and attainable if approached in a common sense manner. In addition to our Ozone Alert! Program, Tulsa, by formal agreement with EPA and a host of other Federal, State and local partners, has become the nation's first Flexible Attainment Region (FAR). The FAR agreement enables us to implement a locally crafted strategy to reduce emissions, and gives us adequate time to evaluate results before having to implement more stringent measures to meet our goals. This avoids the ``one size fits all'' command and control approach which historically has been imposed by EPA. The FAR agreement came about because our local governments and private industry are committed to working together to improve air quality. The necessary ingredients to make this initiative work are flexibility and common sense. When we are allowed to develop our own program and local ``buy- in'' is assured, the willingness to commit the necessary financial and political capital to achieve results is more readily accepted. Recently, one of our refineries in Tulsa was the subject of an EPA enforcement action. The refinery, as part of its penalty, proposed to reduce the Reid Vapor Pressure (RVP) of its gasoline to 8.0 psi and pay a significant financial payment to EPA. Refineries and pipeline companies in the Tulsa area voluntarily reduce the RVP of their gasoline to 8.2 psi during the ozone season. The Federal mandated level is 9.0 psi. We are told that the initial reaction of EPA was to reject the proposal and to require the refinery to identify another project to undertake as a Supplemental Environmental Project. The net effect on the Tulsa area would have been a net reduction measured in pounds of emissions rather than the tons needed to maintain our attainment status. We expressed our concern to EPA and, thankfully, common sense prevailed. We understand that the agency has reversed its position, has accepted the 8.0 psi RVP, and has also directed that part of the fine go to the Tulsa area to finance free bus rides during the upcoming ozone season. We think this action by EPA will give us a significant boost in meeting our air quality goals. The action makes sense--a violation is enforced, and citizens--rather than just the U.S. Treasury will directly benefit. In essence, improving air quality can be achieved without severely disrupting the economy, and without increasing unfunded mandates. The imposition of standards, which even EPA states may be unachievable, will severely dampen the enthusiasm needed to maintain the momentum for improvement. Moreover, in the current ISTEA reauthorization debate there is discussion about eliminating the Congestion Mitigation and Air Quality Program. Without the CMAQ program, we would end up losing an important tool necessary to meet the long range goals of improved air quality. I would like to point out, however, that the current ISTEA legislation does not provide for areas that are in attainment, like Tulsa, to receive CMAQ funds to undertake air quality improvement programs. We would recommend that consideration be given to expanding the eligibility for receiving CMAQ funds to those areas that are in attainment that have a formal program in place designed to reduce emissions. An ounce of prevention is worth a pound of cure. In conclusion, Mr. Chairman, we believe that more thought and study must be accomplished before the standards are changed. The potential impact is great, and we must have more certainty and consensus before a major change, such as this, is initiated. Progress is being made in improving air quality and more will come if common sense and flexibility prevail. I appreciate being invited to participate in the Subcommittee's hearings. On behalf of NARC, we look forward to working with the committee in your important task. Thank you for the opportunity to testify today. I respectfully request that my full statement be made a part of the official hearing record; and I will be happy to answer any questions you may have. ______ Prepared Statement of Robert C. Junk, Jr., President, Pennsylvania Farmers Union Good morning, Mr. Chairman and members of the committee. My name is Robert Junk. I am president of the Pennsylvania Farmers Union. I am also a member of the board of directors of the National Farmers Union and appear here today on behalf of NFU. The National Farmers Union, a general agricultural organization representing 300,000 family farmers and ranchers, takes this opportunity to comment on the proposed changes to air-quality standards for ozone and particulate matter (PM). The National Farmers Union has a long history of supporting conservation programs, because the family farmers, as stewards of the land, are concerned about the environment. Significant levels of emissions are already controlled because farmers and ranchers are using good soil and water conservation practices and are keeping their equipment in good operating condition. It is simply in their best interest to do so because they seek to preserve the land to pass on to future generations. National Farmers Union is concerned that the proposed changes to the air-quality standards for fine PM and ozone will greatly increase the regulation of farm operations and increase costs to farmers both directly and indirectly. We are additionally concerned that there is currently no funding in place to offset these costs other than what the farmer will be required to pay. The costs of the proposed standards for ozone and fine particulate matter will fall heavily on individuals and State and local governments. Farmers, along with other other U.S. taxpayers, will pay for the new rules in many ways--through higher local and State taxes or through cuts in important State and local programs and services, including police and fire protection, education, help for the poor and homeless and other public programs. In a joint letter to the Environmental Protection Agency (EPA) Administrator Carol Browner, the National League of Cities, the Conference of Mayors, the National Governors' Association, the National League of Counties, the National Conference of State Legislators, and other State and local organizations said the ``proposed new standards would have an enormous impact . . . on the ability of State and local officials to meet other urgent priorities.'' The new rules will change the way people live. The changes will range from the serious and expensive (higher State and local taxes and cuts in programs and services) to the moderately expensive (higher costs for things like electricity, cars and gasoline) to the aggravating and inconvenient (driving restrictions, increased automobile inspection and maintenance programs and mandatory car pooling). State and local official are not the only ones criticizing EPA's proposals. Criticism of the proposals are widespread within the Clinton Administration--a fact which EPA did not disclose to the public. A number of Federal agencies, including the Treasury Department, the Office of Science and Technology, the Department of Commerce, the Department of Transportation, and the Small Business Administration, all said in documents just made public that the new standards are not justified. Another agency, the President's Council of Economic Advisors, said the EPA's estimates of the cost of the new rules--a combined $8.5 billion, according to the EPA--is considerably off the mark. According the council's estimates, the cost of the ozone standards alone will be $60 billion a year. How can we justify increased standards for air-quality in rural America when the Conservation Reserve Program is now facing significant funding reductions? To improve the quality of our air, we should increase funding for these conservation programs rather than impose more regulations on farmers. In order to meet new standards, according to a report of the State and Territory Air Pollution Program Administrators and the Association of Local Air Pollution Control Offices (STAPPA/ALAPCO), the agricultural sector may face tighter operational and processing controls to reduce particulate matter emission. STAPPA/ALAPCO's proposed particulate emission control options for agriculture include: <bullet> Wind breaks--and other residue management systems to reduce wind erosion. <bullet> Conservation tillage--use of special equipment to avoid mixing in residues. <bullet> Crop management--planting of legumes of grasses to build soils, grassed waterways. <bullet> Cover crops--planting alfalfa and winter wheat to protect vegetation. <bullet> Dust controls for storage areas--tarps, covers. <bullet> Grain elevators--cyclones, fabric filters, vents application of oils to grain to control dust. <bullet> Grain Transportation--covers on conveyer belts, bucket elevators, etc. <bullet> Feed mills--moisture control measures and cleaning The U.S. Department of Agriculture and the Small Business Administration questioned the EPA's proposed standards on PM and charged that the new standards ``are not based on adequate scientific evidence'' and would have a ``large economic impact'' on ``tens of thousands, if not hundreds of thousands of small businesses'' and farms. USDA further claimed that ``it is premature for the EPA to change the existing standard until scientific evidence is correctly obtained and interpreted.'' USDA also noted the concerns held by farm groups that the new standards ``may impose significant costs'' on farmers, particularly the 71 percent of U.S. farms with annual sales of less than $40,000. The documents also suggest that the proposed regulations may drive up farming costs such as fuel, fertilizers, pesticides, and necessary chemicals. When farmland regulations of this kind are determined, EPA and other government agencies should take into account the contribution of agricultural lands to improved air quality. Despite the fact that agriculture is not a major emitter of PM, the standards proposed by EPA would lead local and State governments to tighten regulation on farm operations. Because it is difficult to measure accurately the amount of fine particulate matter in the air, it is likely that under the new rules, arbitrary limits on what a farmer can till soil, harvest crops, or apply fertilizer could become an unfortunate reality. Although rural areas generally record low levels of pollution, these same areas could soon be in violation of the stricter standards if these proposed rules become law. Because the proposed standards would stiffen the regulations of particulate matter, the impact of the new regulations would be significant to farmers. Fuel and energy costs are the third largest non-agricultural input supply expense for American farmers, and under the proposed rules farmers will be required to pay even more for transportation costs. Furthermore, Federal, State or local regulators could decide that rural roads, including those on private lands, would need to be improved to meet the EPA's proposed standards, which could be very costly to farmers. Agricultural operations have been interpreted as being a ``significant source'' of emission for particulate matter. Various agricultural facilities are presently being regulated in non-attainment zones primarily in the Southwest and Far West. Under the proposed PM<INF>2.5</INF> standards, new non-attainment zones may be proposed across the United States, potentially affecting all agricultural operations and family farms. We urge EPA to work closely with USDA and others to ensure the availability of the best data pertaining to emissions from agricultural activities and the effects of control programs on agriculture and rural communities. National Farmers Union is concerned about the potential effects that implementing control programs, designed to help areas attain the new standard, could have on small farms. EPA defines small entities in the Regulatory Impact Analysis (RIA) as establishments with less than 100 employees. In many areas of the country, agriculture is characterized by owner-operator firms that typically employ few, if any, hired workers. USDA's most recent data show that 71 percent of U.S. farms have annual sales of less than $40,000, while fewer than 6 percent have annual sales greater than $250,000. In 1994 and 1995, farmers spent about $170 billion on farm inputs and services. Both direct and indirect energy inputs account for about 22 percent of the total expenditures for agricultural production, according to USDA. However, direct and indirect energy account for a considerable higher percentage of farmers and variable expenses. With energy constituting a high percentage of variable expenses for many major crops and for livestock, farmers are sensitive to changes in variable expenses because production decisions are based on the prices of variable inputs. Production and/or use of many of these inputs could be affected by emission control programs, including fuel that powers farm equipment, electricity, fertilizers, pesticides, and other agricultural chemicals. Because a large proportion of farms are small entities, increased costs for farm inputs would surely have a negative impact on their financial performance. We are also concerned that existing equipment on farms will be required to be altered to adhere to the new standard, resulting in significant expense to farmers during EPA review; we consider it to be an important time to define what equipment is considered ``old'' or ``new''. Until now, we have been unable to determine a clear definition of these terms for farm machinery. Examples of PM emissions from agriculture include dust from cultivation and harvesting, wind-blown dust from feedlots, grain elevators and grain mills, and diesel soot. Emission of PM also include PM precursors such as ammonia, which rises from feedlots and dairies, diesel emissions, nitrogen oxides and sulfur dioxides from industrial boilers, soot from fires and spray drift from crop protection products. National Farmers Union is concerned about the characterization of pollution in particular air sheds. Where does the pollution come from, and what activity caused it? What percentage of the total pollution inventory results from an activity? Are there cost-effective control strategies that reduce pollution while maintaining productivity? We believe a well coordinated research program with Federal, State and local participation is necessary in order to begin answering these questions. Without answers, controls could be costly and ineffective. In the spirit of cooperation, we believe it is imperative that USDA develop a specific Memorandum of Understanding (MOU) with EPA to transfer technical expertise and support for those air-quality issues derived by the Clean Air Act Scientific Advisory Committee which significantly involve or affect the agricultural industry. Agricultural scientists possess the knowledge to provide this expertise which will maintain USDA confidence and integrity among the agricultural industry producers. This must be a serious and outgoing commitment by USDA to provide this avenue of knowledge, research, development, and technology transfer. We found that many current, agricultural air-quality issues require additional understanding and knowledge well beyond that which exists today. Examples are the unknowns about particulars emitted by wind- blown dust, field operations and nonroad-engine emissions. We would recommend you consider a departmental air-quality research initiative to provide the level of understanding of the environmental impacts this issue demands, in the same way in which we addressed water quality issues in recent years that is cooperatively handled by several agencies. We believe agricultural producers will continue to implement many of the air-control measures to benefit our environment. It is imperative that farmers be provided the knowledge and flexibility to design and voluntarily apply air-quality controls locally. Each area of the country faces different air-quality challenges. We urge you to encourage increased cooperation with EPA scientists, USDA officials, agricultural producers and others to arrive at control strategies that work. For example, some EPA regulations require a reduction in agricultural burning. However, the conservation practice ``Prescribed Burning'' which has proven to be an effective tool for some selected production systems to control pest and diseases. This method does not applicable in every case; therefore it is critical to have locally led efforts to achieve conservation goals. In conclusion, before more research can be completed to determine exactly how much PM <INF>2.5</INF> is emitted on farm operations, we strongly urge that no changes are made to current standards. As the control measures required under the Clean Air Act continue to be met, further reductions in particulate and ozone emissions will continue to decrease, and air-quality will continue to improve. We support the conservation practices and other measures taken as part of the Clean Air Act, and we look forward to continuing to work with you on this important matter. excerpts from article v of national farmers union 1997 policy manual section O. Conservation We support the development of a one-stop conservation planning system for agriculture through the Natural Resources Conservation Service (NRCS). A single conservation plan jointly developed by the farm operator and the NRCS should be established to fulfill the requirements for the current maze of land and water regulations of various governmental agencies. Conservation programs should be good for the environment, reward stewardship of land and water resources, discourage speculative development of fragile land resources, strengthen family farming and enhance rural communities. The objective of the conservation plan must be to reduce and control wind and water erosion, prevent non-point pollution, and enhance the soil and water capacities of the land. The plan should designate which highly erodible soils should not be tilled and which may be tilled with approved conservation practices. It should clearly map and document both existing and drained wetlands, as well as any drains and channels. The plan should outline the conservation of wetlands, as well as the maintenance of drains and channels. It should also provide for meeting soil erosion goals and controlling non-point pollution. Such a conservation planning system should replace the existing sodbuster, swampbuster, Corps of Engineers flood-plain and other regulations which impact agricultural lands. The plan should be supervised and approved by the USDA committee process, with the technical assistance of the NRCS. Once the plan is filed with NRCS and implemented, a producer should be deemed to be in compliance with all Federal agencies. Producers should be allowed to remedy inadvertent or unavoidable failures to carry out conservation plan practices, and penalties should be based on the degree of the violation. Loss of full Federal farm program benefits should be imposed only in cases of purposeful destruction of conservation practices. Current conservation compliance requirements allow too few options to account for local involvement, climatic conditions, and geography, which are beyond producer control. 1. Government Programs Government conservation programs should be funded at levels that will ensure the continued protection of our nation's soil and water resources. Such financing should be on a long-term basis, providing Federal commitments for at least 5 years ahead and providing conservation assistance on a level designed to meet the needs as shown in the Federal land conservation inventory and the appraisals under the Resource Conservation and Recovery Act of 1976 and other Federal studies. The needs are so widespread and urgent that any ``targeted conservation'' program would, if it were motivated by something more than budget savings, have to call for a vast expansion of Federal conservation investment. We request that Federal financing to meet clean water and air standards of the Environmental Protection Agency (EPA) be available to farmers from funds appropriated by Congress for this purpose, and that such funds be administered through the farmer- elected committees. We urge continued improvement and acceleration of the small watershed programs. We support the continuation and expansion of the Environmental Quality Incentives Program which includes, the Agricultural Conservation Program (ACP), Water Quality Incentives Program, Great Plains Conservation Program, the Colorado River Basin Salinity Control Program, and other soil and water programs, and we urge full appropriation of funding directed to family farmers and ranchers. We urge that ACP be funded at not less than the $500-million level as originally authorized by the Soil Conservation and Domestic Allotment Act of 1937, and we strongly urge that the conservation cost- sharing delivery system for all rural Federal conservation cost-sharing funds be through the farmer-elected committee system. Farmers should be able to put strips into grass for soil conservation purposes and use these strips year after year for diverting and conserving without losing base. 2. Agricultural Resources Conservation Program We support the Environmental Conservation Acreage Reduction Program (ECARP). We urge full funding of the three branches of ECARP--the Conservation Reserve Program (CRP), the Wetlands Reserve Program, and the Water Quality Incentives Program--to ensure proper implementation. We also support greater emphasis on improved farm management techniques. Teaching farmers to be the best possible stewards of their resources is a better long-term approach to sustainability than simple land retirement. We recommend that the payments due to cooperating farmers in ECARP be in cash, rather than in certificates or CCC commodities. We support the 25-percent-per-county acreage limit for ECARP. The CRP program needs to be closely monitored by the Natural Resources Conservation Service (NRCS) and the Farm Service Agency (FSA) with enough funding to enforce contract requirements for adequate weed, insect, and fire control. Enrollees should be allowed to manage permanent vegetative cover to enhance wildlife habitat and ecosystem health. In extending the Conservation Reserve Program and CRP contracts, we recommend that the program be better focused to serve the needs of family farmers and ranchers and to protect highly erodible land (HEL) and other environmentally sensitive lands. CRP lands which can qualify for the Wetlands Reserve or Water Quality Incentive programs should be extended and transferred to those programs through voluntary participation. All CRP lands currently enrolled in the program should be re- evaluated for contract. The most environmentally sensitive land should be given first opportunity for contract. CRP lands diverted into long-term timber and forestry conservation projects should be given a high priority for contract re-enrollment. We recommend that planting property to shelterbelts or other conservation measures be encouraged through reduced property taxes on those acres. We recommend that producers who destroy shelterbelts or wooded areas establish the same number of acres of new trees for a minimum of 10 years. We favor CRP contracts and contract extensions for periods of not less than 10 years. We favor programs which maintain CRP lands in private ownership in the hands of resident family farm and ranch operators. Incentives to aid beginning farm and ranch families should be offered on land that was previously enrolled in CRP, but is not environmentally sensitive under the new rules and will not be re- enrolled. We urge that financial and technical assistance be provided to producers in preparing CRP acreages for sustainable agricultural systems that will meet established conservation standards. In addition, land managed with appropriate organic standards while enrolled in CRP should be eligible for organic certification upon leaving the program. In times of extended drought conditions or other weather disasters, haying or grazing on CRP acres should be allocated to all livestock producers based on need. The FSA farmer-elected county committees should be given authority to set the date of harvest, based on the nutritional value of hay. These regulations should be in place so the procedures are known in advance. The maximum landowner income from the haying and grazing should not exceed the annual CRP contract amount from that farm. 3. Sodbuster and Swampbuster Provisions We support provisions which give the secretary greater authority in handling sodbuster and swampbuster violations. The goal of soil conservation practices should be to reduce soil losses to tolerable levels, or ``T-levels.'' We recommend that alternative conservation systems be used only in cases of financial hardship, after recommendation of local conservation officials. We call upon Congress to designate the FSA as the single agency to regulate swampbuster provisions. 4. Wetlands Wetlands deserve protection in order to preserve harmony with the nation's land and its resources and natural systems on which all life depend. Requiring re-certification of wetlands at 5-year intervals creates a moving target for producers in their compliance efforts. While we support a single, coordinated approach to wetlands protection, we believe that producers must be provided full opportunity to participate in the development and review of such joint regulation. We reaffirm our support for making the NRCS and FSA the lead agencies in wetlands delineations on agricultural land. We support the joint efforts of these agencies to propose a single set of definitions and rules in the proposed revisions to the 1989 Federal Manual for Identifying and Delineating Jurisdictional Wetlands, which are pending release. However, the proposed manual's exemption of the prairie pothole region of the United States from its coverage leaves many farmers with no chance for an improvement in wetlands procedures. This critical error must be corrected in the final manual, since commodity production and farm survival are at stake. In addition, we recommend: (1) that any and all wetlands determinations throughout the United States rely on the presence of all three of the following mandatory wetland criteria simultaneously appearing on the same site year-round: (a) hydrology; (b) a predominance of hydric soil; and (c) a prevalence of hydrophilic vegetation; (2) that all existing wetland determinations be reevaluated under the proposed manual's uniform definitions and procedures with the elimination of buffer zones; (3) that the Federal Government consult with State and local governments to develop a unified, mutually agreeable management program to protect our nation's wetlands; (4) that a wetlands management program balance wetland values and the needs of the various States and their political subdivisions and individual property rights; (5) that any leaseholder, renter, or owner be compensated equitably for the taking of any lands through the classification of wetlands; (6) that for the protection and preservation of our natural resources as well as our human resources and our free-enterprise system and democratic way of life, the final interagency manual be revised with greater consideration for the food and fiber producers of the United States; (7) that regulations ought to be amended to allow farmers to mitigate wetlands in a given acreage, provided that there is no net loss of wetlands in that acreage; and (8) that Congress study the impact of current and any new wetlands proposals on agricultural producers, family timber operations, and rural communities and give careful consideration in identifying and separately regulating any artificially created wetlands. Induced wetlands should be exempt from wetland restrictions. 5. Predator and Rodent Control Since the 1931 Animal Damage Control Act (ADC) mandates that the Federal Government protect the livestock industry from predatory loss, we recommend that the original intent of the law be enforced. Judicious use of control practices must be continued on Federal, State, and private lands to control coyotes and other predators. To the extent that an adequate ADC program is not available to farmers, we recommend that a federally financed indemnity program be instituted to pay for livestock losses. ______ Prepared Statement of Bob Vice, President, California Farm Bureau Federation, on behalf of the American Farm Bureau Federation Thank you, Mr. Chairman, for the opportunity to provide testimony for this important hearing on air quality. I am Bob Vice. I own and operate a wholesale citrus and avocado nursery and farm avocados near Fallbrook, California. I am President of the California Farm Bureau Federation and today I am representing the American Farm Bureau Federation, the nation's largest general farm organization with more than 4.7 million member families. Our members grow every type of farm commodity found in America. I am pleased to have the opportunity to discuss with you today the impacts of new air standards on the agricultural community. My comments focus primarily on the Environmental Protection Agency's proposal to revise the National Ambient Air Quality Standard (NAAQS) for particulate matter. As a preface to my comments, I think that it would be appropriate to share with you a portion of Farm Bureau's policy on air quality that was adopted by delegates to our annual meeting. It clearly outlines the position of America's farmers and ranchers regarding the importance of clean air. It reads, in part: We support a healthy environment. We support government policies that: Are based on sound scientific evidence; provide incentives to industries seeking to become more energy efficient or to reduce emissions of identifiable atmospheric pollutants; seek cooperation of organizations and governments, foreign and domestic, to develop better understanding and research on the implications of atmospheric pollution and the means of preventing it. The evidence is quite strong that conservation has been a priority for farmers and ranchers for many years. There has been, and continues to be, a tremendous amount of conservation activity by farmers and ranchers across the country. These activities include such things as protecting wildlife habitat, creating wetlands, grassed waterways and field buffer strips. We also use conservation tillage techniques and cover crops, and plant trees and vegetation for windbreaks. All these activities reduce wind erosion of the soil, which in turn, provides cleaner air. The Conservation Reserve Program alone will idle up to 36.4 million acres across the country that provides vegetation that stabilizes soil and prevents windblown dust. Wind erosion on 84 percent of the nation's rangeland, 86 percent of the cropland, and virtually all of the pasture land is now less than the tolerable soil loss rate--meaning, the rate at which soil erosion can occur without surpassing the natural rate of soil regeneration (which is 2-12 tons per acre per year). And soil lost to wind erosion continues to decrease as farmers expand these extremely environmentally beneficial practices (Attachment I). Farmers are cleaning the air and should get credit for those activities. Make no mistake: we are all for clean air, and this debate today is about how to continue to achieve those goals. Agriculture is concerned because EPA estimates that 34.3 percent of fine particulate matter can be attributed to agriculture and forestry. Regarding this questionably large estimate, I quote Dr. Calvin Parnell, a professor of Agricultural Engineering at Texas A&M University and a member of the U.S. Department of Agriculture's Task Force on Air Quality. He says, and we agree, that: The data used to develop this inventory was based on erroneous emission factors published by EPA for cattle feed yards, feed mills, grain elevators and dust from farmers' field operations. Those comments were made last week in a hearing held by a subcommittee of the House Agriculture Committee. Furthermore, I quote the Honorable Larry Combest, Chairman of the House Agriculture Subcommittee on Forestry, Resource Conservation, and Research from that same hearing. He says, and we agree, that: The science employed in developing this rule is not up to par, and I'm concerned that farmers could bear the brunt of a bad policy based on equally bad science. We don't have the research yet to know whether we can actually attain these standards, how much it will cost the agriculture industry and the consuming public, and how much agriculture activity actually contributes to air pollution problems. (Attachment II). We share these same concerns. We also commend and extend the comments raised by the USDA, the USDA Task Force on Air Quality and the Small Business Administration in regards to economic impacts of this standard on farms and ranches (Attachment III). california situation Today, however, I want to focus on actual situations those of us involved in California agriculture already face in regard to the present PM<INF>10</INF> Non-Attainment Area for central and southern California, as determined by the 1990 Amendments to the Clean Air Act. Under this status, a major portion of California's agriculture has been faced with a number of challenges which, in many cases, are yet to be resolved. Agriculture in other areas of the country may face the same situation if a new PM standard is imposed. The money, time and resources we have spent attempting to meet the PM<INF>10</INF> ambient air quality standard have given us plenty of reasons to know that we cannot jump immediately into a new air quality standard of which we know so little about. It is an absolute necessity to allow science surrounding PM<INF>2.5</INF> to develop, so that intelligent, reasonable and justifiable decisions can be made. Let me expand on one of our air district's experiences in dealing with the present PM<INF>10</INF> standard. These are examples of situations agriculture has faced in the San Joaquin Valley Unified Air Pollution Control District. Example 1 The emission inventory for agricultural tillage operations was the focus of the initial discussions with the air district. There are two major problems identified in this inventory. First, the actual number of passes the equipment makes per acre, and second, the PM<INF>10</INF> emission produced from each type of operation such as disking, ripping or furrowing. This problem was due to the fact that information, published by the EPA, indicated that alfalfa was disked eight times per year, rice 13 times per year and rangeland twice per year. This greatly overestimated the emissions and made agriculture the prime target. First, farmers disc and seed alfalfa maybe only once every three or more years, not eight per year, and farmers don't even disc rice or rangeland at all, much less 13 and two times per year, respectively. Some of the control measures suggested for agriculture operations included: sprinkler irrigation on fields prior to planting; water tanks mounted on tractors and water sprays on the back of disking equipment (without taking into account that water is of a premium in California); and the use of shaking equipment to shake trucks and farm implements prior to exiting a field or unpaved road onto a paved road (this would supposedly eliminate the carry-out of mud or dirt, which would later be entrained into the atmosphere by cars or trucks on paved roads). These irrational and impractical controls would have done little if nothing to clean the air and would have been extremely costly for California agriculture, had they not been corrected. Just by updating the inventory with current acreage information for each crop and correcting the number of passes per acre for tillage equipment, the agricultural PM<INF>10</INF> emission inventory for tillage operations was reduced 30 percent. Example 2 At one point it was discussed that farms should be permitted by their local air districts. In the San Joaquin Valley alone, it was speculated that over 31,000 permits would need to be written for farms. Each silage pile, unpaved road and equipment storage yard, to name a few, would have been permitted. The District estimated that it would need 70 additional permitting engineers to process air quality permits just for farms. Example 3 As I indicated, information used by the air districts identifies agriculture as a primary source of PM<INF>10</INF> emissions. For the past 5 years, California's agriculture community has fought to address the deficiencies in those inventories. One example is windblown dust emissions from agricultural lands. In the original inventory, it was assumed that all farming in California was ``dryland'' farmed. It assumed that the land was not irrigated, and that there was no vegetation cover, or cover canopy, from the crops. Once irrigation and vegetation cover was put into the wind erosion equations, the wind erosion PM<INF>10</INF> emission inventory was reduced an incredible 80 percent from 410 tons per day of PM<INF>10</INF>, to 58 tons per day of PM<INF>10</INF>. Example 4 Probably the most blatant example of an inaccurate inventory,which would have cost the agricultural industry thousands of dollars, was the initial emission inventory for combustion engines used to drive irrigation pumps. The original inventory estimated nitrogen oxide (NOX) emissions (a precursor of PM) at 626 tons per day from all the pumps in the San Joaquin Valley. This would be the highest emissions category for NOX emissions in the San Joaquin Valley exceeding all the mobile sources including all cars and trucks, which together only emit 353 tons per day. Driven by agricultural inquiries, a new study was commissioned that was based on actual interviews with 360 farmers. The new study determined that the NOX emission for these pumps is only 32 tons per day. We have only begun to address agriculture's concerns with PM<INF>10</INF> estimates, many of which are still unaddressed and uncorrected. Furthermore, other PM<INF>10</INF> issues are still arising. For example, EPA is also looking at NOX and ammonia (NH3) from soils as contributors to ambient levels of PM<INF>10</INF>. This could mean farmers will also have to address the application of fertilizers and pesticides as an air quality concern, not to mention livestock. Yet, recent studies performed in the Valley indicate that there are very little NOX or NH3 emissions from the soil. Questions about how much particulate matter is released into the air through natural occurrences, such as high wind or volcanoes, also remain to be addressed (Attachment Ill). Considering all these discrepancies, it is unbelievable that we are now again faced with the same problems, only this time with smaller particulate matter. Based on the 1994 Emissions Inventory for the National Particulate Matter Study, fugitive dust emissions from agriculture have been listed as the third largest source of PM<INF>2.5</INF> nationwide, falling behind paved and unpaved roads. This is hard to believe, since there has never been any actual PM<INF>2.5</INF> emission data taken on agricultural tillage equipment using EPA approved PM<INF>2.5</INF> samplers. All of these examples only emphasize the necessity to fully study PM<INF>2.5</INF> before deadlines are set and rules are developed. california study In attempting to resolve some of the previously mentioned issues, it became necessary to conduct a multi-year, multi-faceted air quality study. Such a study was developed and is now underway in California. This study, known as the California Regional Particulate Matter Air Quality Study (CRPMAQS), will address all areas of PM<INF>10</INF> and PM<INF>2.5</INF> issues. This includes emissions determinations and quantifications, data analyses, demonstration studies, ambient air quality measurements and model development. USDA is playing a major role in this study by helping to fund emissions studies for agricultural activities and operations. Once completed, it will be the source by which decisions on particulate matter will be made in California, and will serve to aid other areas in the Nation and the world in their particulate matter decisionmaking process. This comprehensive study, however, will not be completed for roughly 5 years. I want to emphasize that this study is the first comprehensive study that actually measures, instead of estimating, agriculture's PM<INF>2.5</INF> emissions. In order to avoid the mistakes made for PM<INF>10</INF>, this study and others like it must be completed before costly implementation activities, attainment deadlines and regulations are set in place for yet a new PM standard. conclusion In conclusion, I want to reiterate that much work is yet to be done in the agriculture industry before a new standard is set for particulate matter. We must develop an accurate measurement method for PM<INF>2.5</INF> in order to determine and quantify the significant sources of PM<INF>2.5</INF> and we must complete the necessary research to understand the true nature and formation of PM<INF>2.5</INF>, so as not to make the same mistakes that we are making with agricultural PM<INF>10</INF> emissions. A shotgun approach will only serve to put American agriculture out of competition with other countries and put agricultural producers out of work. Because U.S. agricultural commodity prices are tied to world prices, a farmer cannot simply ``pass on'' the cost of doing business to the consumer. In other words, ``we are ``price takers'' and not price makers.'' Therefore, any increase in operational costs of farming becomes significant and must be based on accurate information that justifies the expenditures. We also want to be careful in not tipping the balance of regulation in this country to far as to force our grocers to fill market orders with food purchased from other countries that do not always meet the same safeguards and health standards as U.S.-produced commodities. The agriculture community enjoys breathing clean air as much as anybody, but it doesn't want to waste money on control measures that have little or no effect on cleaning up the air of this Nation. Finally, the USDA must maintain a strong presence as discussions continue on these new standards. The USDA, the Small Business Administration and the USDA Agricultural Air Quality Task Force must continue to demand that the concerns of America's farmers and ranchers are addressed by the EPA in order to ensure a continued safe, abundant, healthy and affordable U.S. food supply. I end on a note of caution as expressed by Paul Johnson, Chief of the USDA's Natural Resources Conservation Service, as he remarked in last week's hearing that: When local air quality administrators make decisions about which pollution control programs to implement, they will consider factors such as the percentage of total pollution in the airshed that is caused by a specific activity or source, and costs and benefits of implementing a set of controls on these activities. Agriculture is practiced throughout the country using many different technologies on a variety of soils and in a variety of climates. Conditions, technology and practices, along with a number of other factors determine emissions. Agricultural emissions are highly variable within and across airsheds and must be evaluated carefully. Thank you. 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I appreciate having the opportunity to talk with you today about the Environmental Protection Agency's proposal for new national air quality standards for ozone and fine particulate matter, commonly referred to as PM<INF>2.5</INF>. Protection of our nation's air quality is a part of the Izaak Walton League's mission and an issue of vital importance to League members, many of whom live in the nation's agricultural communities. We have worked on clean air issues since the first Federal Air Pollution Act, which was passed during the Eisenhower Administration. With the adoption of new air quality standards just months away, the League is concerned that the health, environmental and economic benefits that new standards would provide be understood, recognized and considered as you review this critical decision. Today, I want to touch on a few of the benefits this new standard would realize for the health of our people and our natural environment, but I especially want to implore you to consider the findings of the U.S. Department of Agriculture's National Crop Loss Assessment Network, which was released during the Reagan Administration. We were involved in the NCLAN study, and cosponsored a symposium in 1982, with the Boyce Thompson Institute at Cornell University, at which many of the findings were released and discussed. I personally conducted a literature review of the effects of air pollution on crops in 1990, a summary of which is available here today for your consideration. You know that the new air quality standards would protect public health by preventing approximately 15,000 premature deaths and 250,000 to 400,000 illnesses each year. The proposed ozone standard of .08 ppm would provide much needed health protection to anyone who spends time outdoors working, exercising or relaxing. This includes, of course, farm owners, operators and employees. The particulate matter standard for PM<INF>2.5</INF> would protect, among others, anyone with heart or lung disease. Most importantly, both standards would improve protections for our children's health. You also know that new limits on ozone and fine particulate matter pollution would further reduce emissions of air pollutants that deposit on our rivers, lakes and streams and degrade water quality necessary for wildlife, fisheries, and water-based recreation. As you know, ozone and particulate matter pollution are secondary, not primary pollutants. This means that they are not emitted directly but instead are created from a mixture of primary pollutants including nitrogen oxides and sulfur dioxides. By reducing emissions of these primary pollutants, the new standards would help to prevent the acidification of our rivers, lakes, streams, and other special aquatic ecosystems such as the Chesapeake Bay. Most critical to the responsibilities of this Committee, the new ozone standard would provide millions of dollars in agricultural benefits each year. At air pollution levels well below those that exist in our air today, ozone can reduce the productivity of commodity crops such as corn and soybeans by 10 percent. This means that dirty air costs our country approximately one billion bushels of corn and more than two hundred million bushels of soybeans each year--at today's prices almost three billion dollars in revenues. It is well-established in the literature that the effects of ozone on crops is very insidious, and, in most cases, invisible. With soybeans, for example, there are no fewer beans, but lighter beans. A 10-percent reduction, which can be common at ozone levels found throughout much of the soybean growing region, while highly significant in terms of yield, would be effectively invisible--even to the trained eye. In the last 2 years, three groups of experts on ozone's vegetative impacts have reconfirmed the seriousness of ozone's impacts on commodity crops, forests, and other vegetation, which were first measured by the National Crop Loss Assessment Network in 1982. A workshop sponsored by the Southern Oxidants Study in 1995 convened agricultural, forest, and ecological scientists with extensive experience studying the effects of ozone on ecosystems to discuss the need for a new ozone standard. The Workshop recommended that EPA adopt a seasonal secondary standard that would provide vegetation with additional protection during the growing season. More recently, the Department of the Interior recommended that EPA adopt a more protective secondary standard because the proposed primary standard of .08 ppm was not adequate to protect natural and cultural resources. Finally, the Clean Air Scientific Advisory Committee (CASAC) that reviewed the research behind the proposed standards advised EPA that a secondary standard, more stringent than the primary, was needed to protect vegetation from ozone. I know that concern has been expressed regarding the cost of implementing a new PM<INF>2.5</INF> standard, particularly in agricultural areas, and 1 would like to close by addressing that issue. First, it is essential that our air quality standards be set at levels that are protective of human health, not at levels that regulated industries and others consider cost-effective. Second, the new particulate matter standard applies to PM<INF>2.5</INF>, not PM<INF>10</INF>. EPA has not recommended any tightening of levels of PM<INF>10</INF> pollution. The distinction is important because almost all PM<INF>2.5</INF> is a product of combustion and almost all PM<INF>10</INF> is created by earth moving activities such as construction, mining, and agricultural practices like tilling. Third, on most farms, the primary source of combustion is diesel fueled farm equipment. This equipment is responsible for a very small amount of the primary pollutants that create PM<INF>2.5</INF>. The amounts of these primary pollutants created by farm equipment are so small they are insignificant when compared to emissions from other PM<INF>2.5</INF> sources. Farm equipment creates about 1 percent of national nitrogen oxide emissions and almost no sulfur dioxide emissions. Finally, the history of pollution controls strongly suggests that even if controls on diesel fueled vehicles become necessary, these controls will cost far less than predicted. Reductions in sulfur dioxide emissions, for example, which cost less than $100 per ton today were predicted to cost as much as $1,500 per ton. Reduced crop yields are much more likely than tighter pollution controls to negatively impact a farmer's bottom line. In closing I would like to again thank you for the opportunity to address the proposed new standards' agricultural impacts and to shed light on one of the hidden victims of our nation's polluted air, the American farmer. new standards will impose few burdens on the farmer The Izaak Walton League believes the impact that these standards will have on our nation's agriculture industry have been mis- characterized by some. Industry opponents to the new PM<INF>2.5</INF> standard, for example, claim the new standard will create a horrible regulatory burden for farmers. These opponents are assuming that EPA will target the same farming activities for PM<INF>2.5</INF> as it did in developing strategies for controlling PM<INF>10</INF>. However, this assumption is mistaken. EPA's principle interest in implementing the new air quality standards is to bring areas of non-attainment into attainment. Most projected non-attainment areas are urban areas where fine particulate matter pollution is a product of combustion. Therefore, the major targets of regulatory focus are very likely to be sources of combustion in urban areas: electric utilities, buses, and large commercial boilers, for example. The changes EPA is proposing to the PM<INF>10</INF> program--which do not include a tightening of PM<INF>10</INF> pollution limits-- actually result in fewer regulatory burdens on agricultural activities. For example, by proposing a switch to a ``98th percentile'' form for measuring compliance with the PM<INF>10</INF> standard, EPA is proposing to allow more than six exceedances every year to be ``excused'' instead of just one. In comments critical of this element of EPA's proposal, the California Air Resources Board calculated that in the Great Basin Valley peak PM<INF>10</INF> levels 68 percent above the standard would be legal under the new proposal. Finally, there has been testimony in the U.S. House of Representatives that the new PM<INF>2.5</INF> standard will also affect farmers who use nitrogen-based fertilizers and, because of the volatilizations of ammonia, dairies with manure lagoons. In reality, combustion sources such as factory boilers and electric utilities emit many times the level of PM<INF>2.5</INF> particles than do manure lagoons. They are not likely to be regulated under the State Implementation Plans developed to implement these standards. ______ Prepared Statement of Kevin Fennelly, MD, Staff Physician, Division of Environmental and Occupational Health Sciences, National Jewish Medical and Research Center Mr. Chairman and Members of the Subcommittee: Thank you for the opportunity to speak with you today regarding the particulate matter standard proposed by the Environmental Protection Agency (EPA). My name is Kevin Fennelly; I am an academic physician at the National Jewish Medical and Research Center in Denver, Colorado. I am board-certified in pulmonary medicine and in occupational-environ- mental medicine, and my time is evenly divided between patient care and clinical-epidemiological research. Most of the patients I see have asthma or chronic obstructive pulmonary disease (COPD), although I care for patients with a wide spectrum of more unusual respiratory diseases. My research interests include the epidemiology of the health effects of particulate air pollution, so I am familiar with the scientific literature in this area. I am testifying today as a concerned physician, scientist, and citizen. I support the EPA proposal, although a more stringent standard would provide additional public health benefits. I wish to emphasize three points. (I) Particulate air pollution causes human suffering, not just statistics. (II) There is biological plausibility to support the epidemiological findings of adverse health effects associated with particulate air pollution. (III) The risk of adverse health effects due to particulate air pollution is comparable to other risks which our society has not found acceptable. i. particulate air pollution causes human suffering, not just statistics In discussing these issues with our local and State leaders, I realized that we physicians and scientists have not done an ideal job of communicating the meaning of recent scientific studies on particulate air pollution. The data have often been expressed in very abstract terms which are difficult to understand. My primary goal today is to try to bridge the gap between the scientific data and the clinical effects. I hope to prevent you from being numbed by all the numbers which you have undoubtedly seen, and to recall that behind all those statistics are people suffering from very real diseases. As a physician specializing in lung diseases, I have seen patients who report worsening of their asthma symptoms on days of visible air pollution in Denver, Phoenix, Los Angeles, and the San Francisco Bay Area. These patients have told me of this association after a nonspecific inquiry about the triggers of their asthma symptoms, and they have not been aware of my research interest in air pollution. Colleagues have reported similar encounters. In Denver, our air pollution is predominated by particulate matter, so at least for our local patients, particulate air pollution is likely to contain the offending agent(s). Asthma is a common disease characterized by symptoms to multiple triggers, including respiratory infections, cold air, exercise, and other factors, including air pollution. Because of this, it is impossible in any one patient to quantify how much air pollution contributes to the disease. This speaks to the need for epidemiological studies of groups of individuals to assess the relative contribution of factors such as air pollution. Aside from asthmatics, another group susceptible to the effects of particulate air pollution are the elderly with heart or lung disease. Again, since these diseases are so common, it is impossible for any one physician on any 1 day to notice changes in the pattern of illness or death which might be attributable to particulate air pollution. Even with the hundreds of deaths which occurred during the air pollution disaster in London in 1952, doctors did not appreciate the full magnitude of that public health disaster until the epidemiologic data were available. I have been disturbed by comments in the lay literature which have trivialized the occurrence of respiratory symptoms associated with air pollution. Breathing is our most basic notion Without breath there is no life, and it should be understandable that shortness of breath can be a distressing symptom. Allow me to suggest a simple exercise for those of you who may be fortunate enough to have escaped experiencing shortness of breath yourself or to have observed it in a family member. Simply take a drinking straw and breathe through it for several minutes, or better yet, try to walk about and climb some stairs. Then imagine feeling that way for hours or days. It is not a trivial discomfort. The other disturbing suggestion I have heard is that patients with lung diseases should simply medicate themselves more to cope with air pollution. This is illogical and violates good medical practice. As an occupational pulmonologist, I engage considerable resources removing patients from exposures which may be causing or aggravating their asthma. In the case of urban air pollution, it is obviously impossible for patients to avoid breathing the air in their community. Although inhaled bronchodilator medicines may be able to relieve symptoms temporarily, ongoing inhalation exposure will continue to aggravate the inflammation in the bronchial tubes which characterizes asthma and COPD. With more severe exacerbations, patients may have to use corticosteroid tablets or injections, which can have serious adverse effects if used repeatedly. ii. there is biological plausibility to support the epidemiological findings of adverse health effects associated with particulate air pollution I will defer to Dr. Carl Shy's expertise in epidemiology to review the large numbers of studies which have found adverse health effects associated with particulate air pollution, but I wish to offer a few observations. Critics of these studies have suggested that they are inconclusive or that they have been done by a small group of biased researchers from Harvard. In fact, there are now a large number of studies of various designs which have been done in various cities, countries, and climates, and by various investigators studying multiple outcomes: death rates, hospitalizations, emergency department visits, pulmonary function changes, asthma medication use, and symptoms. There has been a striking consistency in the findings of these studies. There have been a few studies which have not found similar results, but these have typically suffered from designs and methods which resulted in a lack of statistical power or the lack of a biologically plausible hypothesis. Some critics of the EPA proposal have suggested that epidemiological studies are not valid science or use some sort of statistical sleight-of-hand. Advances in computing power and in statistical methods have improved the science of modern epidemiology considerably, which is similar to the advances due to improved technology in other fields. It is true that there have been epidemiologic studies of various suspected hazards which have resulted in associations which were later found to be spurious. In those cases the cause and effect relationship was readily dismissed after additional epidemiological and toxicological studies did not support the findings. However, this surely cannot be an indictment against the field of epidemiology; similar processes occur in every scientific field. In summary, it is highly unlikely that the epidemiological findings are due to chance or some other aberrations. A common criticism expressed in the lay press has been the small magnitude of the effects of the epidemiological studies. There have been references to the opinions of some scientists who only ``accept'' relative risks over 2 or 3 (or some other arbitrary number) in order to consider an association ``significant''. In fact, there is no consensus or ``gold standard'' in the scientific community for any criteria in this regard. Such criteria might be useful as a screen in assessing the value of one or even a few studies on a given subject. However, when there is a large body of literature which has demonstrated consistent results, as is the case regarding the health effects of particulate air pollution, we must accept the data as they are. The magnitude of the effects are indeed small at current levels of particulate air pollution, but they are consistent with the effects which occurred during severe air pollution episodes, such as in London, 1952. Indeed, this point satisfies another criteria for establishing a cause-and- effect relationship: a reasonable exposure-response relationship. The impact on the public health is determined not only by the magnitude of the effect, but also by how many people are exposed and how frequently they are exposed. Highly toxic environmental hazards easily gain the attention of the media and the public. Conversely, exposure to urban air pollution is such a common experience that most people perceive very little risk. However, it can be as serious a public health risk, albeit much more insidious, since there are large numbers of susceptible people frequently exposed to low concentrations of pollutants. Most of us were shocked at the accidental release of methyl isocyanate in Bhopal, India in 1984. There were at least 2000 deaths from that disaster [1], but the number of individuals dying from particulate air pollution each year clearly exceeds that number. A common criticism of the EPA proposal for the particulate matter standard is that the epidemiological studies are not supported by biological plausibility. Although we still have much to learn, this is not true. In the air pollution disaster in Donora, PA of 1948, there were symptoms in 88 percent of those with asthma, 77 percent of those with heart disease, and 79 percent of those with chronic bronchitis[2]. There were 12 deaths in the Donora Borough during that week, which was six times the expected rate. Autopsies were performed on three of these patients. All three had evidence of capillary dilatation, edema, and hemorrhage in the lung with purulent bronchitis and bronchiolitis, which are inflammatory changes in the medium-to-large and small airways, respectively. All three of these patients had evidence of chronic cardiovascular disease. Similarly, in the killer fog of London in 1952, approximately 300 (60 percent) of over 500 autopsies demonstrated both heart and lung disease[3]. Thus, the pathological data were consistent with the concurrent and more recent epidemiological findings of increased deaths due to heart and lung diseases. Godleski and colleagues[4] recently presented preliminary findings of an inhalation toxicology study which was coherent with these pathological findings. They exposed rats with experimentally induced chronic bronchitis to concentrated urban air particulates. Those animals had a higher death rate (37 percent) than the controls (0 percent) as well as airway inflammation and marked constriction of the bronchial tubes. Other animal studies have demonstrated lung inflammation and injury due to particulate matter, especially with very small particles described as ``ultrafine''[5]. There are a growing number of reports of investigations of the basic biological mechanisms responsible for this inflammatory response, including free radical activity[6], prostaglandins[7], and endotoxin-induced activation of genes for cytokines, or chemical messengers[8]. Another recent study[9] found that there is a marked increase in particle deposition in subjects with chronic obstructive lung disease, which may help explain the increased susceptibility of these individuals to the effects of particulate air pollution. Although much more research is needed to elucidate the biological mechanisms causing the effects of particulate air pollutants, these early studies are already producing exciting results supporting the biological plausibility of the epidemiological findings. Some critics of the EPA proposal have called for more scientific certainty before taking action. As a pulmonologist, these arguments seem to echo the history of the science and public policy regarding cigarette smoking. Early epidemiological studies identified cigarette smoking as a risk factor for lung cancer and cardiovascular disease, but the strategy of the tobacco industry for years has been to repeatedly demand that more research is needed to confirm the hazards of cigarette smoking. Although we have learned a tremendous amount about the adverse health effects of cigarette smoking, we still do not know with absolute certainty exactly how smoking induces cancer and cardiovascular disease. However, few reasonable people now question the deleterious effects of cigarette smoking. Absolute certainty can be achieved only with complete convergence and consistency of all studies in all disciplines, including epidemiology, inhalation toxicology, dosimetry, and others. This has never happened, and it is highly unlikely that it will ever happen due to the nature of science as a human endeavor. iii. the risk of adverse health effects due to particulate air pollution is comparable to other risks which our society has not found acceptable Just as ``absolute certainty'' is impossible, there is no such thing as ``zero risk.'' From a regulatory perspective, I can appreciate that this scientific literature is disturbing since there is no suggestion of a threshold concentration associated with these health effects. Therefore, the critical question becomes one of ``acceptable risk'' and of our societal values. Just as there is no gold standard for what constitutes a ``significant'' relative risk, there is no consensus as to what is an ``acceptable risk'' in our society. However, there are precedents suggesting at least a reasonable range. In the history of regulatory action in the U.S., the EPA and other agencies have often regulated hazards if the cancer risk were greater than 1 per 100,000[10]. The Clean Air Act Amendments of 1990 mandated that the EPA regulate hazardous air pollutant emissions to reduce the lifetime cancer risk if it finds such risk to be higher than one in one million (See Sec. 112(f)(2)). In 1978, the Supreme Court suggested that an occupational risk of cancer due to benzene exposure of 100 per 100,000 warranted regulatory consideration[11]. Thus, there is a range of lifetime risks for cancer from 100 per 100,000 to 1 per 1,000,000 which history suggests is not ``acceptable'' to our society. These data refer to risks for cancer, but it seems that an increased risk of death from heart or lung disease should be considered the same as an increased risk of death from cancer. I would like to suggest an approach to help understand and communicate this issue: the use of incidence rates. EPA has typically performed risk assessments of carcinogenic hazards and expressed the risk in terms of deaths per 100,000 population. A similar metric is used frequently in describing infectious disease risks, but I have not seen it used to describe risks from exposures to air pollution. For example, to estimate the number of deaths attributable to PM<INF>10</INF> in Denver, I assumed (1) a threshold effect of 30 mcg/m3 and (2) a 3.4 percent increase in respiratory deaths and a 1.4 percent increase in cardiac deaths for each 10 mcg/m3 increase in PM<INF>10</INF> (average estimates suggested by Dockery and Pope[12]). Using the daily count of deaths and the daily PM<INF>10</INF> concentrations for the city of Denver from 1990-92, I thus calculated 57 deaths, or an average of 19 cardiopulmonary deaths per year attributable to particulate air pollution. Since the population of the city of Denver in 1990 was 467,652, the annual crude cardiopulmonary mortality rate attributable to PM<INF>10</INF> is 19/467,652, or 4 per 100,000. Since there were 1,745 cardiopulmonary deaths from 1990-92, 3.3 percent (57/1745) were attributable to PM<INF>10</INF>. This conservative estimate is consistent with Lipfert's recent estimate that air pollution may account for 3-5 percent of deaths in affected urban areas; his esti- mate included lung cancer deaths as well.[13] If the annual risk of death due to particulate air pollution is thus conservatively estimated at 4 per 100,000, then the cumulative risk over only 10 years of residence in this mildly polluted urban area would be 40 per 100,000. I also calculated similar risks for Philadelphia or Los Angeles using data provided in the EPA Staff Paper.[14] (See tables 1 and 2.) These estimates are substantantially larger, at 23 and 25 per 100,000 population per year respectively, or 230 to 250 per 100,000 population over 10 years. Thus, the risk of acute cardiopulmonary death associated with particulate air pollution over a decade is greater than the ``unacceptable'' lifetime risk of cancer discussed above. These risk estimates obviously do not include the many other nonfatal health effects of particulate air pollution, some of which are listed in tables 1 and 2. Although much emphasis has been placed on the studies of increased deaths associated with particulate air pollution, we know that mortality is only the ``tip of the iceberg'', i.e., that there are probably many more less serious adverse health effects if an exposure is able to produce death[15]. (See figure 1.) Unfortunately, there is not one composite measure which sums the many fatal and nonfatal health effects of an exposure such as particulate air pollution. Such a discussion of quantitative risk estimates also does not include the qualitative aspects of risks associated with air pollution which the public has not found acceptable, such as these exposures being involuntary, uncontrollable, and affecting children[16]. iv. summary These issues are extremely complex, and in our struggles to be objective by providing quantitative data, it is easy to become numbed by the numbers. When I see patients who have increased respiratory symptoms on days of high air pollution, they sometimes ask me why nobody is doing anything to improve Denver's ``Brown Cloud''. I try to reassure them that great improvements in air quality have been achieved over the last two decades. However, I think that we need to heed the medical maxim: ``Listen to the patient.'' Behind the statistics are real people suffering with real symptoms. I congratulate the EPA in its review of the recent scientific literature and in recognizing the importance of PM<INF>2.5</INF>. There are adequate data to support more stringent regulation of particulate air pollution, and the lack of ``certainty'' should not be an excuse for inaction. We could improve the public health by implementing even more protective standards, such as those proposed by the American Lung Association. At minimum, I urge you to support the proposed changes in the particulate air pollution standard as proposed by the Environmental Protection Agency. Thank you for this opportunity to share my concerns. references 1. Melius J.M. The Bhopal Disaster. In: Rom W., ed. Environmental and Occupational Medicine. Boston: Little, Brown, and Company, 1992:921-926 2. Shrenk H.H. Public Health Service. Bulletin Number 36. 1949 3. Ministry of Health. Mortality and morbidity during the London fog of December 1952. Reports on Public Health and Medical Subjects, Number 95. 1954 4. Godleski J., Sioutas C., Katler M., Koutrakis P. Death from inhalation of concentrated ambient air particles in animal models of pulmonary disease (Abstract). In: Second Colloquium on Particulate Air Pollution and Health. Park City, UT, 1996 5. Oberdorster G., Gelein R.M., Ferin J., Weiss B. Association of particulate air pollution and acute mortality: involvement of ultrafine particles? Inhalation Toxicology 1995;7:111-124 6. Li X.Y., Gilmour P.S., Donaldson K., MacNee W. Free radical activity and pro-inflammatory effects of particulate air pollution (PM<INF>10</INF>) in vivo and in vitro. Thorax 1996;51:1216-1222 7. Samet J.M., Reed W., Ghio A.J., Devlin R.B., Carter J.D., Dailey L.A., Bromberg P.A., Madden M.C. Induction of prostaglandin H synthase 2 in human airway epithelial cells exposed to residual oil fly ash. Toxicology and Applied Pharmacology 1996; 141:159-168 8. Dong W., Lewtas J., Luster M.I. Role of endotoxin in tumor necrosis factor alpha expression from alveolar macrophages treated with urban air particles. Experimental Lung Research 1996;22:577-592 9. Kim C.S., Kang T.C. Comparative measurement of lung deposition of inhaled fine particles in normal subjects and patients with obstructive lung disease. American Journal of Respiratory Critical Care Medicine, 1997;155:899.-905 10. Nicholson W.J. Quantitative risk assessment for carcinogens. In: Rom W., ed. Environmental and Occupational Medicine. Second ed. Boston: Little, Brown and Company, 1992:1386 11. Karstadt M. Quantitative risk assessment: qualms and questions. Teratogen Carcinogen Mutagen 1988;8:137-152 12. Dockery D.W., Pope C.Ad. Acute respiratory effects of particulate air pollution. Annual Review of Public Health 1994;15:107- 132 13. Lipfert F.W., Wyzga R.E. Air pollution and mortality: issues and uncertainties. Journal of the Air and Waste Management Association 1995;45:949-966 14. Review of the National Ambient Air Quality Standards for Particulate Matter: Policy Assessment of Scientific and Technical Information: Office of Air Quality Planning and Standards Staff Paper. Research Triangle Park, NC: United States Environmental Protection Agency, 1996 15. American Thoracic Society, Guidelines as to what constitutes an adverse respiratory health effect, with special reference to epidemiologic studies of air pollution. American Review of Respiratory Diseases 1985;13 1:666-668 16. Slovic P. Perception of risk. Science 1987;236:280-285 [GRAPHIC] [TIFF OMITTED] T6586.441 [GRAPHIC] [TIFF OMITTED] T6586.442 [GRAPHIC] [TIFF OMITTED] T6586.443 Prepared Statement of Dr. Christopher Grande, Executive Director, International Trauma Anesthesiology and Critical Care Society Good morning. My name is Dr. Christopher Grande. I am a practicing physician from Baltimore, Maryland. I am a board-certified anesthesiologist and intensive care specialist in trauma injury. I have authored and edited numerous medical books and have had about 30 articles published in professional journals. I am also Executive Director of the International Trauma Anesthesiology and Critical Care Society or ``ITACCS'' for short. ITACCS is a 10-year old professional association of more than 1,000 trauma specialists and emergency room physicians, nurses, and related professionals. I also hold a masters degree in public health from the Johns Hopkins University School of Public Health. I'd like to thank the committee and Chairman Inhofe for inviting me to provide ITACCS' views on the proposed ozone and particulate matter standards. Before I specifically address the standards, though, I'd first like to give the committee some important background information. Everyday I'm in the hospital emergency room , I see patients and problems vying for critical resources. From acute asthma patients to traumatic injuries. These are all competing public health priorities. All competing for limited available public health resources. The focus of ITACCS is traumatic injury, often accidental in nature such as that caused by motor vehicle, on-the-job, or household accidents. Injury is the leading caused of death for those under the age of 45.\1\ And it is the fourth leading cause of death overall in the United States. About 150,000 deaths every year.\2\ Trauma cuts across all of society. The injured person is not someone else. The injured patient is you, your child, your spouse, your parent. The average age of injury victims is 20. Death from injury is the leading cause of years-of-life-lost in the U.S.--more than twice the number of years of life lost as the next leading cause, cancer, and three times that of heart disease. According to 1990 statistics from the Centers for Disease Control and Prevention, traumatic injury was responsible for approximately 3.7 million years of potential life lost.\3\ In contrast, cancer was responsible for 1.8 million years of potential life lost. Heart disease was responsible for 1.3 million years of potential life lost. What does this tell us? The National Academy of Sciences concluded in 1985 that trauma was the ``No. 1'' public health problem in the U.S.\4\ This situation remains unchanged today. How is this relevant to the debate over the ozone and particulate matter standards? It can be simply put in three words, ``public health priorities.'' The fact is that society has limited resources that it can spend on public health. As such, responsible public policy dictates that such resources be spent so as to achieve the ``biggest bang for the buck.'' ITACCS is not convinced, and neither should the public be, that the proposed ozone and particulate matter standards are a smart way to spend our limited resources. But I want to make it clear that we are not singling out only the proposed ozone and particulate matter air quality standards. The proposed standards are merely the latest example in what we see as a disturbing trend of the last two decades where scarce public health resources are diverted from more clearly demonstrated beneficial uses. The unintended consequence of this diversion might be a decrease in the overall effectiveness and efficiency of public health care delivery. As the makers of our laws and the ultimate allocators of our public health resources, Congress should take the lead in rationally allocating our limited resources. But how would Congress know what is a priority and what is not? The process behind the proposed ozone and particulate matter air quality standards has not been helpful. First, the proposed rules do not provide a ranking or comparison between the estimated health effects attributed to ozone and PM and those of other public health needs. One of the health endpoints associated with the proposed rules is asthma. No doubt asthma is a serious issue and public health resources should be directed at asthma. But a recent study \5\ published in the February 1997 American Journal of Respiratory and Critical Care Medicine a journal of the American Lung Association helps place air pollution-induced asthma in perspective. In this study, which employs a study design that has been characterized \6\ as the most reliable on the potential health effects of ambient ozone--i.e., the study model of children attending asthma camp--air pollution was associated with a 40 percent increase in asthma exacerbation in children. It sounds bad, but what does this really mean? Assuming for sake of argument that the authors' conclusion is reasonable, this increase in asthma exacerbation equates to one extra use of an inhaler among one in seven severe asthmatics on the worst pollution day. However, close scrutiny of this study reveals that many confounding risk factors for asthma exacerbation were not considered by the study authors. These risk factors include changes in temperature, atmospheric pressure, anxiety, physical exertion, allergens, dust, and fumes. Moreover, this study is inconsistent with the general observation that while asthma has increased over the last 15 or so years, air pollution has decreased. There appears to be no generally accepted explanation for this phenomenon. Therefore, this study does not satisfactorily link ambient ozone with asthma exacerbation. Before we commit our scarce resources wouldn't it be useful to know exactly where this very uncertain health effect ranks among other real public health priorities? If asthma qualifies as a public health concern, appropriate levels of funding should be targeted at programs that have been proven to be effective, but not fully implemented. Such programs include appropriate research, public and patient education, increased compliance with asthma medication schedules, intelligent avoidance of triggering factors, etc. Just last week, President Clinton issued an Executive order requiring Federal agencies to pay more attention to environmental health and safety risks that disproportionately affect children. While it is easy to agree with the intent of the Executive order, it is not clear that air pollution disproportionately affects children. What is clear is that traumatic injury disproportionately affects children, and it has been clearly identified as the leading cause of death in children.\7\ Second, the proposed rules do not provide an accurate estimate of what their associated opportunity costs are. For example, if a community is forced to spend its resources implementing the ozone and particulate matter air quality standards, what other public health needs will the community sacrifice? A new trauma center? Training for its paramedics? A new ambulance? Filling these other public health needs can produce results that cut across many public health problems. For example, ambulances and trauma centers benefit everyone from asthmatics to heart attack and trauma victims. It would seem to be good public policy to develop and rely on an analysis of opportunity costs. Third, the true uncertainties associated with the proposed ozone and particulate matter air quality standards have not been fully presented. For example, it has been estimated and widely reported that chronic exposure to fine particulate matter causes 20,000 deaths per year. In fact this estimate appears to be based on very uncertain epidemiology. It was acknowledged recently by EPA \8\ and reported in major newspapers such as The Washington Post \9\ that the simple error of using an arithmetic ``mean'' instead of an arithmetic ``median'' reduced the estimated mortality from fine particulate matter by 5,000 deaths. It could very well be that chronic exposure to fine particulate matter, in fact, causes no deaths. On this point, it is greatly troubling that the data underlying this estimate has yet to be made publicly available.\10\ Given that major confounding factors for mortality appear to be omitted from the analyses--factors like lack of exercise, poor diet, and prior health history--weak epidemiologic associations could easily vanish with more thorough analysis.\11\ In stark contrast to what has been hypothesized about particulate matter and mortality, we know that about 150,000 people die every year from injury. These are real deaths, not those calculated through debatable assumptions and statistics. One year ago the television show Dateline NBC featured the story of Robert Meier.\12\ In April 1995, Mr. Meier was driving through rural Oklahoma heading home for Easter. Just before 4 o'clock that Saturday afternoon, Meier's van careened off the highway, slamming through a guardrail. His van rolled over five times before plummeting into a ravine. Within a few minutes rescue personnel were at the scene. The ambulance took Mr. Meier to Shawnee Regional Hospital. But the doctor on duty determined that Mr. Meier had serious internal injuries and needed to be transferred to another hospital better equipped to treat them. But as Mr. Meier bled profusely from a ruptured aorta, no hospital in the area would accept him because critical resources were not available. It was not until half past midnight, 8 hours after his accident, that a surgeon was found to operate on Mr. Meier. This delay cost Mr. Meier his life. Mr. Meier was fully covered by health insurance. He had done his part. But because of a lack of crucial resources, the system failed. Stories like this one are common. But they should not be, nor do they have to be. Proven solutions are possible now, but must compete for attention and funding. More than 25 studies indicate that between 20,000 and 25,000 Americans who die each year from injury could be saved if regional trauma systems were in place across the Nation ensuring prompt access to a qualified trauma center. In 1973, Congress enacted the Emergency Medical Services System Act to help States improve their trauma systems. But lack of Federal support made this an unfunded mandate that States could not afford to implement on their own. And as a result, significant deficiencies exist in trauma systems across the country like the one that resulted in Mr. Meier's death. But how would Congress know this when currently there is no mechanism to identify, compare, and prioritize public health needs. The ozone and particulate matter proposals in their present formats are prime examples of this defect in how we do public health in America. I understand that a bill was introduced in the last Congress which would have required the comparative ranking of health risks. This would be helpful for prioritizing our public health needs. I urge that Congress continue along this track. Stimulated by this latest raid on our scarce public health resources, ITACCS is establishing a new forum to facilitate public debate on the allocation of public health resources. The mission of the National Forum for Public Health Priorities will be to provide policymakers with information necessary to prioritize public health needs. Those who wish to commit the public's limited resources should be required to justify such proposed commitments against all other competing needs. And, as a major allocator of public health resources, Congress must ensure that the public health is not short-changed by unproductive expenditures. Thank you for your attention. I will be happy to answer any questions you may have. notes 1. Journal of the American Medical Association. 1994;27:495. 2. National Safety Council. 1993. Accident Facts. 3. Centers for Disease Control and Prevention: Years of potential life lost before ages 65 and 85--United States, 1989-1990. MMWR 41:313, 1992. 4. National Research Council. 1985. Injury in America: A Continuing Public Health Problem. 5. Am J Crit Care Med 1997;155:654-660. 6. See EPA Criteria Document for Ozone. 7. National Safety Council, Accident Facts (1996 ed.). 8. EPA Press Release, April 2, 1997. 9. The Washington Post (April 3, 1997). 10. The Wall Street Journal (April 7, 1997). 11. See, e.g., American Journal of Respiratory and Critical Care 1995; 151:669-674 (the ``Pope'' study). 12. Dateline NBC (March 17, 1996). ______ Prepared Statement of Harry C. Alford, President and CEO, National Black Chamber of Commerce My name is Harry C. Alford, President and CEO, National Black Chamber of Commerce. The NBCC is made up of 155 affiliated chapters located in 43 States. We have three (3) divisions--Eastern, Central, Western; nine (9) regions and 43 district offices. Through direct membership and via our affiliated chapters, the NBCC directly speaks on behalf of 60,000 Black-owned businesses and represents the total populace of Black-owned firms which, according to the U.S. Census Bureau of Statistics, is over 620,000. The NBCC is opposed to the two proposals presented by the EPA that would set a more stringent ozone standard and establish a new PM (particulate matter) standard for emissions at or below 2.5. The Clean Air Act of 1990 has made much progress in improving our environment. We sincerely feel that the continuance of this process will further improve the environment. To put more stringent demands on our businesses will have an extreme adverse impact on business in general with even higher stakes to lose for small businesses per se. If big business gets a ``cold'', small business gets the ``flu'' and Black- owned business suffers ``pneumonia''. An example of the above can be found in our campaign to develop business partnerships with the automobile industry. We have approached and are working with principals within the management of Ford, Chrysler and General Motors. One success story is that at the time of preliminary discussions with Chrysler, we had no Black-owned architect, civil engineer or construction company performing work of over $1 million. Today, after just 1 year of interaction we have businesses in such disciplines actively working on or negotiating over $100 million worth of Chrysler expansion. That is just one example, these three auto makers have expansion plans set for the cities of Arlington, TX, Oklahoma City, Kansas City, Fairfax, MO, Shreveport, LA, Janesville and Kenosha, WI, Belvedere and Chicago, IL, St. Louis, Ft. Wayne, Kokomo and Indianapolis, IN, Flint, Lansing and Detroit, MI, Toledo, Twinsburg, Lima, Dayton, Cincinnati, Cleveland and Warren, OH, Louisville and Bowling Green, KY, Springhill, TN, Athens, MS, Atlanta, Eastern, NY, Linden and Edison, NJ, Wilmington and Newark, DE, Baltimore, and Norfolk, VA. This is an expansion investment of $37.9 billion which is the equivalent of total sales for all Black-owned businesses combined! Just competing for this business and winning 10 percent would increase the total national output of America's Black-owned businesses by over 10 percent. It's a goal worth going after. However, it may not exist for the Black segment of this economy if the new standards go into effect. This is just the auto industry. We are busy creating alliances with the oil industry, electrical utilities, telecommunication companies, etc. The potential for economic parity and true capitalism in Black communities--THE MISSING LINK--is before us! Viable employment through an economic infrastructure in currently distressed neighborhoods is going to be the answer to improved health care, education, family values and the decrease in hopelessness, crime, welfare and violence. There just is no other way to do it. We have heard coming out of EPA terms such as Environmental Justice and Environmental Racism. Such terms are not accurate in their description. They imply that the ``evils of big business'' conspire in back rooms to wreak havoc on minority communities via dumping of toxic/hazardous materials, etc. The coincidence of environmental hazards in minority communities is a matter of economics. Property values and shifts in desirable business properties are the main reasons. Minority populations just happen to live (after a cycle of geographical shifts) in these communities. However, if there was ever a policy or a proposed regulation that could be considered directly adversarial to a particular segment of our population we may now have it. The proposed standards are going to hit urban communities the hardest. Of the 620,000 Black-owned businesses at least 98 percent of them are located in urban areas (U.S. Census). Hispanic and Asian businesses probably can claim the same. As mentioned above, Black-owned businesses are presently at the end of the business ``food chain''. If business suffers, Black businesses will suffer the most. The main vehicle for Black community development is business startup and growth. The proposed standards will become predatory to Black-owned businesses and all Black communities and we must vehemently protest them. The NBCC has been quite successful since its conception in 1993. We have Black church organizations, educators, political leaders and traditional civil rights organizations talking about economics--the lack thereof--like never before. Corporate America has been waiting on Black communities to focus on the principles of capitalism which is the bloodline for our future and security. The time is before us and I foresee a rapid change in economic empowerment for communities that have suffered for too long. The EPA's attitude and it's proposals are counter to this trend and, thus, pose the biggest threat. The increased costs that will pain the Fortune 500 and maim small businesses will obliterate minority businesses, especially Black owned businesses. The end result is lost jobs and lack of capital infusion. I personally lived in Detroit and Chicago during economic downturns. What was experienced by dwellers of these urban communities and others was not a pretty sight at all. Shame on us if we allow this to happen once again because we quickly move to make the Earth ``pristine'' in a fashion that will surely hurt our economic infrastructure. Let us work in harmony toward making the environment as safe as possible without making those who have the least resources pay the most. The National Black Chamber of Commerce pleads with Congress to strongly consider the ills of the proposed standards and encourage EPA to be more thoughtful and universal in its approach. ______ Prepared Statement of Frank Herhold, Executive Director, Marine Industries Association of South Florida Mr. Chairman and subcommittee members, good afternoon my name is Frank Herhold. I am the Executive Director for the Marine Industries Association of South Florida, which represents over 640 marine businesses. I am also here today on behalf of the National Marine Manufacturers Association (NMMA), which is the national trade association representing over 1500 boat builders, marine engine and marine accessory manufacturers. I am here today to explain why the EPA's proposed revision to the National Ambient Air Quality Standards (NAAQS) will be bad for recreational boating. What is bad for recreational boating is bad for the State of Florida and the Nation. There are currently 750,000 registered boats in the State of Florida and the latest annual marine retail sales figures topped $11 billion in Florida. To put this into perspective, in Broward County alone, the marine industry represents a total economic output of $4.3 billion employing 88,390 people, with an average growth rate of 6.5 percent. Boating brings dollars and jobs to the State of Florida. The Clean Air Act Amendments of 1990 have placed a significant technical and economic challenge on the recreational boating industry. The new marine engine emission regulation which was finalized in July 1996 will require that all new marine engines reduce hydrocarbon emissions by 75 percent. Economic impact estimates have this regulation costing the industry over $350 million, increasing the cost per boat engine by as much as 15 percent. The Clean Air Act will also regulate air emissions from boat manufacturing plants with a MACT (Maximum Achievable Control Technology) standard scheduled to be promulgated in the year 2000. This regulation will also be costly raising the price of boats, thus directly reducing the number of people who can afford to enjoy boating. Needless to say, the proposed revised NAAQS will have a devastating effect on the recreational marine industry. Without drastically reengineering American society, States will be forced to press emission sources for further reductions, many of which like the recreational boating industry, have reached the point of diminishing returns. Several years ago, when the NAAQS for ozone was initially set at .12 ppm, some State regulators in non-attainment areas considered bans on recreational boating as a method to meet the requirements of their State Implementation Plans. The Washington DC Council of Governments (COG) actually proposed a ban on recreational boating in 1993. This proposal raised immediate opposition from boaters, marinas, waterfront restaurants, and other effected groups. COG eventually reversed its decision after the affected parties spent considerable resources to educate COG as to the proposal's adverse effects. This EPA proposed revised standard will again force States to reconsider episodic bans and this time States may be pushed to implement episodic restrictions on recreational boating throughout the Nation. I am appealing to you to stop EPA's attempts to revise the standards at this time. It is my understanding that the scientific studies that EPA is using to defend this proposal do not take into account either the specific constituents in air pollution or other mitigating factors that effect human health. I feel that EPA would be premature to impose such a burdensome standard without first identifying the specific benefit and real cost of the proposal. Even if we fail to convince EPA that it is making a terrible mistake, at a minimum, let's somehow prevent States from using episodic bans as a means to attain compliance. Episodic bans will negatively effect a person's decision to purchase a boat, knowing that on the hottest days of the summer the government can take away his or her freedom to operate it. Not since Congress passed the luxury tax have boaters faced a more serious threat. If this standard is finalized in its current proposed form, consider the burden it will place on States, industry and its workers, and the million of people who just want to spend a summer afternoon on the water with their family. In conclusion, everyone needs to realize that America's air is cleaner and will continue to improve, as the benefits from recently and soon to be initiated Clean Air Act regulations are realized. What we do not need now is more regulation. What we need now is the time and resources to implement those regulations that are already on the books. Boaters want clean air and clean water and the recreational marine industry is ready to assist both Congress and the EPA in this rulemaking process. Thank you for the opportunity to testify. ______ Prepared Statement of Jeffrey Smith, Executive Director, Institute of Clean Air Companies, Inc. Good afternoon. My name is Jeffrey C. Smith and I am the Executive Director of the Institute of Clean Air Companies, Inc. (``the Institute'' or ``ICAC''). The Institute is pleased to participate in today's hearing, and applauds the Subcommittee for providing this opportunity to share different ideas and views on the important matter of EPA's proposed revisions to the particulate matter and ozone ambient standards (NAAQS). By way of introduction, ICAC is the national association of companies that supply air pollution control and monitoring technology for emissions of air pollutants, including emissions of sulfur oxides (SO<INF>x</INF>), nitrogen oxides (NO<INF>x</INF>), volatile organic compounds (VOCs), and particulate matter (PM), which contribute either directly or as precursors to fine particulate matter and ozone in the atmosphere. ICAC businesses compete with each other, offer the full spectrum of technologies available, and serve all stationary source emitters that would be affected by the revised standards. This afternoon I will briefly address, qualitatively, the impact of the proposed standards on the U.S. air pollution control technology industry and the overall cost of the proposal. The U.S. air pollution control industry supports EPA' proposal to revise the ozone and particulate matter ambient standards. Suppliers of control technology for the pollutants that would be affected by the EPA proposal employ tens of thousands of people, and these firms in general have suffered disappointing earnings which have necessitated severe downsizing in many cases. The EPA proposal would benefit these businesses at an important time. I should note also that nearly all suppliers of technology to control the emissions that are precursors of ozone and fine particulate matter are small businesses. Indeed, for the control of volatile organic compounds, a leading precursor of ozone, I estimate that over 95 percent of the 100+ control suppliers are ``small businesses'', i.e., have fewer than 500 employees. In the great majority of cases, these companies have far fewer than 500 employees. Thus, resolving the admittedly tough clean air issues we face in a way that protects public health and the environment has an important side-benefit: it would also promote the air pollution control industry, which creates jobs as compliance dollars are recycled in the economy. This industry is currently generating a modest trade surplus to help offset the billions this Nation hemorrhages each month on international trade, and is providing technological leadership that can continue to be deployed in the fast-growing overseas markets for U.S. air pollution control technology. With regard to the overall cost of the EPA proposal, I note first the Institute's support for the two-step process of setting ambient air quality standards, and then addressing implementation and cost issues. This process has received bipartisan support and worked well for over two decades. By clearly separating health science and cost/implementation issues, the process actually allows the public, as well as Federal and State government authorities to rationally parse out an then balance all policy issues. In short, no emitting source will have to comply with the new standards before costs are thoroughly examined. No one of course knows what the exact cost of the proposal will be. To be sure, there will be an implementation cost, but it is well to remember several important lessons of the past 27 years in implementing the Clean Air Act. One of these is illustrated by my experience nearly a decade ago when I sat before various House and Senate Committees and presented detailed implementation cost estimates for the acid rain provisions of what became the Clean Air Act Amendments of 1990. Regulated industry claimed the removal costs of SO<INF>2</INF>, the leading precursor to acid rain as well as a precursor to fine particulate matter, would reach thousands of dollars a ton, while EPA claimed a more modest sum of $1,500 to $2,000 a ton was about what we could expect. I disagreed, arguing that market and technical data supported a dollar-per-ton- removed cost of about $500. But I overestimated the cost, too, since today, in 1997's inflated dollars, a ton of SO<INF>2</INF> is removed for only $110 a ton. The preeminent lesson of our Nation's 27-year history under the Clean Air Act is that actual compliance costs turn out to be much lower than the costs predicted at the outset of a regulatory action because the regulated community, markets, and control technology suppliers are smarter and more efficient at reducing costs than forecasters predict. This is even more true in light of today's emphasis on flexibility in compliance and authorized use of and credit for market-based approaches and pollution prevention. Those who predict gargantuan cost impacts ignore this important lesson, and also underestimate the wisdom of State and local officials who will be implementing these standards. Everyone has an interest in rational and prudent clean air policy, and the cost effectiveness of various compliance options will be considered during implementation. And there is no reason not to believe that, as has always been the case, all of us--regulated industry, government officials, and technology suppliers--will discover ever more cost-effective compliance solutions, especially since nearly a decade exists between now and when the impact of new standards would be felt. For our part, members of the Institute continue to invest in research and development to improve removal efficiencies while lowering costs and simplifying operation. We have to. The air pollution control technology industry is innovative and highly competitive. And improvements in cost-effectiveness are what give one business or technology a competitive advantage over another. It is no exaggeration to say that the clean air policy choices we make in 1997 will determine the amount of air pollution that affects the health and environment of ourselves and our children over the next decade and beyond. Ten years is a long time, nearly a life-time for childhood. We must, therefore, choose correctly, informed both by lessons learned from our nearly three decades of Clean Air Act experience, and by a vision for the future which reflects, as does every opinion poll, the American public's demand for a clean and healthy environment. In closing, the Institute again expresses its appreciation to the Subcommittee for providing a forum for dialog on this important issue. In our view, EPA has taken the proper course by its efforts to establish ozone and particulate matter standards that protect public health. If those health-based standards are revised, the U.S. air pollution control industry is ready to do its part to help our Nation achieve its clean air goals cost-effectively. Based on historical precedent, the current pace of control technology innovation, the use of market-based incentives, the years between now and compliance deadlines, and competition within the air pollution control technology industry and among technologies, we are confident that the actual cost of compliance will be less than most of us today imagine. ______ Prepared Statement of Glenn Heilman, Vice President, Heilman Pavement Specialties, Inc. Good Morning. My name is Glenn Heilman. I am the Vice President of Heilman Pavement Specialties, Inc., a small family owned business that has been in operation for 41 years. We are located in Freeport, Pennsylvania which is just above Pittsburgh. Thank you for giving me the opportunity to testify on behalf of the National Federation of Independent Business regarding the recently proposed national air quality standards for ozone and particulate matter. NFIB is the nation's largest small business advocacy group representing 600,000 small businesses in all fifty States. NFIB's membership reflects the general business profile by having the same representation of retail, service, manufacturing and construction businesses that make up the nation's business community. In addition to being a small business owner, I also volunteer and serve as Chairman of Pennsylvania's Small Business Compliance Advisory Panel. This panel is mandated by Section 507 of the Clean Air Act Amendments to help small business as part of the Small Business Stationary Technical and Environmental Compliance Assistance Program. This program has been enormously successful despite underfunding and has become a model for small business programs in other environmental legislation. Our small business program conducts seminars, offers a toll-free confidential hotline, low interest loans and many other outreach efforts for small businesses. Every State has such a program in varying degrees of effectiveness. These programs are valuable tools to improve our air quality and are overseen by the Environmental Protection Agency. In my position as Chairman, I am keenly aware of the progress we are making in cleaning our air. What appears to be ignored is that air quality has improved significantly since passage of the Clean Air Act, and the 1990 amendments have not even been fully implemented. It is therefore imperative that only requirements that are essential be mandated. What I suggest is that we move toward more complete compliance with existing standards before revising them. As a small business owner, the economic impact and burdensome regulations of the proposed standards would significantly affect and threaten the livelihood of my business. As a manufacturer of road pavement, my business operates asphalt plants and hauls stone as a raw material. The moving of equipment and materials creates minor particulate matter. I also have air emissions from my heavy truck and off- road equipment. Some of this equipment is old, but works well. I simply cannot afford to buy new equipment to comply with the proposed regulations. As a small business owner, I am active and involved because I have to be. Careless regulations will put me out of business. Not only will small business owners lose life savings and investment, but our employees lose their jobs and our communities will suffer economically. For that reason, I am shocked and disappointed that the EPA has declined to consider the effects of this proposed rule on small business. Last year, Congress passed and the President signed a law that requires the EPA to assess the impact of regulations on small business. To date, the EPA has refused to do this on the ozone and particulate matter standard. Because this regulation is likely to have a great impact on a variety of small businesses, I hope that the EPA will carefully consider the consequences before they impose this new standard. Rather than implementing new regulations for clean air, I recommend utilizing and encouraging the use of present means to achieve air quality improvements. There are technologies presently available to help clean our air. In our company we voluntarily look for ways to improve the environment. In 1980 my father developed a new, ozone- friendly technology for asphalt roads. This technology is exemplified in a material called HEI-WAY General Purpose Material or HGP. A 2-year university study documents that HGP emits seven times less Volatile Organic Compounds (VOC)--in the form of low molecular weight normal and branched alkane hydrocarbons--than the present technology used to pave roads. Additionally, this technology also eliminates a significant water pollution threat to rural streams and wetlands. Under standard technology, present road paving methods allow more than 1000 gallons (or three tons) of gasoline-type VOC to evaporate into our troposphere for every mile paved. HGP reduces this VOC air pollution by 85 percent. On a nationwide basis, of the nearly 4 million miles of roads in the country, this technology is applicable to over 60 percent of them. In Pennsylvania alone, if just 1 percent of the roads were paved each year with HGP instead of the standard technology, over 3000 tons of VOC air pollution would be eliminated. The HGP technology could be more widely used to lower VOC air emissions as soon as EPA allows for Discrete Emissions Reduction Credits (DER) under the New Source Review. In closing, it is important to keep in mind the unique nature of a small business owner when examining our reaction to environmental legislation and regulations. Small business owners wear many hats. Two of the most important are being both a business owner and a citizen of a community. We drink the water, breathe the air, and fish in the lakes. We want a healthy environment for ourselves and our children. However, we also expect the government to be fair and responsible. New regulations as proposed by EPA for ozone and particulate matter are unnecessary, will result in an enormous regulatory burden and threaten a business that my family has spent 41 years to build. A viable framework is in place. It consists of new, environmentally friendly technologies, such as HGP, and couples these initiatives with existing programs. The system is working. Let's use what we have. ______ Statement of Associated Builders and Contractors Associated Builders and Contractors (ABC) thanks the Senate Clean Air, Wetlands, Private Property and Nuclear Safety Subcommittee for the opportunity to submit a statement on the Environmental Protection Agency's (EPA) proposed rules on ozone and particulate matter in the atmosphere. ABC believes that the EPA is proposing new Federal air quality regulations for ozone smog and fine particles that could have crippling effects on hundreds of thousands of American construction workers and cost consumers and businesses billions of dollars, with little or no health benefit. ABC is a national trade association representing over 19,000 contractors, subcontractors, material suppliers, and related firms from across the country and from all specialties in the construction industry. ABC's diverse membership is bound by a shared commitment to the merit shop philosophy of awarding construction contracts to the lowest responsible bidder through open and competitive bidding. This practice assures taxpayers and consumers the most value for their construction dollar. With 80 percent of the construction performed today by open shop contractors, ABC is proud to be their voice. After careful review of the technical and health information and analyses in the Criteria Document and the Staff Paper prepared by EPA for this rulemaking, the Clean Air Scientific Advisory Committee (CASAC), the agency's expert review panel established by the Clean Air Act and appointed by the Administrator, concluded there were significant uncertainties and unanswered questions that had to be ad- dressed before EPA proceeds with the Particulate Matter (PM) rulemaking. Additionally, the same panel concluded there was no health basis to establish new National Ambient Air Quality Standards (NAAQS) for ozone. ABC concurs with CASAC's opinion and strongly advises EPA to reaffirm the current standards for PM and ozone while initiating a targeted research program to resolve the questions and uncertainties identified during the just-completed review process. The proposed tightening of the ozone and PM NAAQS, in conjunction with the highway funding sanction authorities and Metropolitan Planning Organizations (MPOs) approval requirements of the Clean Air Act Amendments (CAAA) and 1991 Intermodal Surface Transportation Efficiency Act (ISTEA), pose enormous restrictions to the transportation construction industry throughout the United States. The combination of these new regulatory requirements endanger tens of thousands of jobs and create major new constraints to mobility. Additionally, ABC is concerned that the EPA has not adequately taken into account the affect these costly new requirements will undoubtedly have on the American worker and average motorists. If the EPA succeeds in changing the standard such limitations as mandatory employee carpooling, centralized state-run emissions inspections, and the use of more expensive reformulated gasoline are only a few of the policies that will adversely affect small business. Other transit initiatives could be higher vehicle taxes and higher tolls in peak driving times. Non-vehicle remedies could place restrictions on the use of power tools, lawn mowers, and snow blowers as well as other equipment. ABC shares with all Americans an interest in efforts to preserve, protect and enhance the natural environment. Pollution prevention is in our nation's interest; however, efforts to reduce emissions must be balanced with considerations for the safety of those operating the equipment, as well as the cost and technological feasibility of achieving any prescribed reductions. Many construction industry workers rely upon non-road engines in their daily efforts to safely build construction projects on time and on budget. The performance and reliability of these engines directly impact a contractor's ability to successfully execute their contracted responsibilities on the construction job site. The EPA initially claimed the new PM/ozone standard will extend the lives of as many as 20,000 people a year (recently revised down to 15,000 people). Clearly, the extent of this health risk is of concern. However, exactly which components in urban air are causing the health problems is not yet well understood. The EPA's preference for regulating every fine particle in the air before understanding the real causes and quantifiable health benefits is not a prudent strategy. ABC is concerned that: (1) The EPA has failed to properly characterize PM concentrations across the United States. Key technical analyses have not been completed. For example, the EPA has not determined the chemical composition or size of the particulate matter that is linked to the supposed increases in mortality and morbidity. The EPA has also failed to identify the biological mechanism that would explain the link between PM<INF>2.5</INF> and increases in mortality. The use of a nationwide PM<INF>2.5</INF>/PM<INF>10</INF> ratio to estimate PM<INF>2.5</INF> concentrations is insupportable from the limited PM<INF>2.5</INF> data available. (2) The EPA has failed to accurately analyze the impact of the new standard. The EPA has stated its refusal to conduct a small business analysis for these rules. The Regulatory Impact Analyses (RIAs) are incomplete; no analysis was conducted on the proposed secondary ozone standard, no analysis was conducted on impacts to small businesses, the unfunded mandates act was not addressed, and the analyses do not estimate the full cost of attaining the proposed standards throughout the country (there are ``residual nonattainment areas''). The RIA for ozone rulemaking does not use the proposed standards in the Notice of Proposed Rulemaking as the basis for its costs and benefits projections. (3) The EPA has used questionable health impact studies to justify their actions. There is virtually no PM<INF>2.5</INF> exposure data on either the general population or on susceptible populations. The use of community-based epidemiological studies are not appropriate because individual personal exposures do not correspond to these community- based studies. Due to the predominance of small businesses within the construction industry. ABC remains concerned that compliance with the Clean Air Act Amendments could have significant adverse effects. We continue to encourage the Congress to give serious consideration to the impact these new requirements would have on small businesses. Associated Builders and Contractors strongly urges that there be no change in the ozone or particulate matter standards at this time until more comprehensive scientific studies can be performed. Again, ABC appreciates this opportunity to submit a statement for the record. 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Hon. John Chafee, Chairman, Senate Environment and Public Works Committee, U.S. Senate, Washington, DC. Dear Chairman Chafee: The Food Industry Environmental Council (FIEC) is pleased to submit these comments for the record for the Senate Environment and Public Works Committee's recent hearing addressing the Environmental Protection Agency's (EPA) proposed revisions to the National Ambient Air Quality Standards (NAAQS) for ozone and particulate matter. As you may know, FIEC is a coalition of food processors and food trade associations representing over 15,000 facilities employing approximately 1.5 million people in the United States. FIEC members operate facilities and distribute finished food products worldwide. If EPA were to revise the NAAQS for ozone and particulate matter as proposed, the processing and distribution of food in the United States would be impacted significantly. The proposed revisions to the ozone standard would replace the current primary NAAQS with a standard using an 8-hour averaging interval and would replace the current secondary NAAQS with a standard based on a SUM06 formulation. The proposal for fine particulate would expand the current PM<INF>10</INF> NAAQS with two standards using PM<INF>2.5</INF> as the pollutant indicator. One of the new standards would be based on a 24-hour averaging interval; the second new standard would be based on an annual averaging interval. Under the proposed more stringent NAAQS, it would appear that State governments would have no option but to seek to achieve emissions reductions from many small sources which have not been subject to regulation in the past, which could have a particularly broad impact on the agriculture and food processing sector. This revised regulatory approach would multiply significantly the range of potential control options, creating a pyramiding impact on each segment of the food supply chain. These impacts, without question, would create particularly significant regulatory burdens for large and small food processors, including many facilities and growers that rely on part-time and seasonal labor. Indeed, FIEC questions whether EPA has evaluated appropriately and thoroughly the potential impact of its proposals. While FIEC members fully support the goals of the Clean Air Act, the coalition questions the scientific basis that has been cited by the agency for proposing more stringent NAAQS for ozone and PM at a time when current regulatory programs are resulting in documented air quality improvements. Because the proposed new NAAQS would impact each segment of the food production supply chain without any reliable indication of benefit to the public health, FIEC urges EPA to reaffirm the current PM standards and initiate a targeted research program to resolve the serious and pertinent questions raised in the Clean Air Scientific Advisory Committee's (CASAC) review of the scientific basis relied on by the agency to support the proposed rule. FIEC urges the agency to withdraw the proposed rule for ozone and to continue instead to build on the documented progress that has been gained through reliance on the current NAAQS. air quality is improving under current standards The National Air Quality and Emissions Trends Report, 1995 issued recently by EPA shows that over the past 25 years, emissions and ambient concentrations of the six major air pollutants have decreased nationally by almost 30 percent. Furthermore, the significant reduction in the number of nationwide ``non-attainment'' areas for ozone from 98 areas in 1990 to 66 areas at the present time, abatement from existing State Implementation Plans (SIPs), and EPA's own forecast of continuing reductions in ozone precursor emissions under current and prospective Clean Air Act programs (such as the Title IV, acid rain program, and the Title III, hazardous air pollutants program) provide clear indications that the current standards are promoting improved air quality. impact on ``farm to table'' food production and delivery The United States boasts the finest ``farm to table'' food distribution system in the world. Unlike other countries, in which up to 50 percent of foodstuffs may be lost between the farm and the table, the United States loses less than 10 percent of foodstuffs through production and distribution channels. Likewise, U.S. consumers spend far less of their gross disposable income on food than consumers in any other industrialized nation. In large part, efficiencies in growing, processing and distributing food keeps costs to American consumers down. There is broad consensus that the proposed new NAAQS would create new ``non-attainment'' areas for ozone and particulate matter. More specifically, it has been estimated that the proposed new standards would swell to roughly 335 the number of counties and areas that would qualify for ``non-attainment'' status for ozone, and 167 counties that would be considered ``non attainment'' for particulate matter. FIEC is concerned that ``non-attainment'' may spill over to rural areas which currently do not monitor ozone levels. Significantly, these largely rural areas are the core of production agriculture and food processing. Farm mechanization, farming practices, distribution to and from processing facilities, process details and post processing distribution are likely to be affected by the proposal, thereby compromising the ability of the agriculture and food processing sectors to continue to provide an abundant, economical food supply to consumers. At the start of the food production chain, the new standards implicate tighter emission and use controls for farm equipment, and restrictions on fertilization and crop protection application, among other potential control options, which could have a broad impact on crop yield and quality. New mobile source controls, including tighter emission controls for vehicles used to transport commodities to processing plants, would impact directly the quality and timely delivery of raw ingredients used in post harvest production. State governments, which already have placed controls on numerous areas, likely would be pressed to target food processing plants, which are negligible sources of emissions, as new control sources in order to comply with the proposed more stringent NAAQS. Finally, the expedient and economical distribution of finished foods, a critical link in assuring foods from the farm reach consumers' tables, would be impacted by control strategies such as reformulated fuel requirements, engine emission standards, alternative fuel programs, inspection requirements, retrofitting and rebuilding of existing engines, and operational restrictions. These control options would jeopardize the efficient system which keeps an abundant and economical supply of fresh and wholesome foods on American consumers' tables. impact on small businesses Many growers and food processing facilities rely on part-time and seasonal labor and therefore fall under the Small Business Administration's (SBA's) definition of ``small business.'' FIEC is concerned EPA has failed to consider the national impact of the proposed standards on small businesses, which have made such a vital contribution to the recent strength of the U.S. economy. Importantly, FIEC questions whether EPA's proposal is in direct violation of the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. Sec. Sec. 601 et. seq.) better known as ``SBREFA,'' which was passed last year by Congress with overwhelming bipartisan support. Under SBREFA, EPA is required before publishing a proposed rulemaking to issue an initial Regulatory Flexibility Analysis and to convene an advocacy review panel to collect small business input and make findings on the determinations reached in EPA's initial ``regulatory flexibility'' submission. Rather than taking these steps, the agency issued a certification that the proposed rule, if promulgated, would not have a significant economic impact on a substantial number of small entities. This certification was clearly inappropriate in this instance, given the significance of the likely impact of the proposal on small businesses. limitations and shortcomings with the health data relied upon by epa CASAC, the agency's expert review panel established by the Clean Air Act, reviewed the technical and health information and analyses in the Criteria Document (CD) and the Staff Paper (SP) prepared by EPA for this rulemaking and concluded there were significant uncertainties and unanswered questions that had to be addressed. FIEC is concerned the proposed decision to set a PM<INF>2.5</INF> (fine particle) and a more stringent NAAQS for ozone does not reflect adequately the considerable uncertainty reflected in CASAC's analysis, and recommends EPA reaffirm the current standards and initiate a targeted research program to resolve the questions raised during the recently completed review process. Particulate Matter Court ordered deadlines have hindered the standards development process, as evidenced by the fact that the effect of exposure to ambient fine particle concentrations was not analyzed adequately by EPA. CASAC stated in its June 13, 1996, letter that the court ``deadlines did not allow adequate time to analyze, integrate, interpret, and debate the available data on this very complex issue.'' Importantly, a number of comments provided to the agency identify many areas in which there is a critical need for additional analytical work or data collection. CASAC stated that, ``The agency must immediately implement a targeted research program to address these unanswered questions and uncertainties.'' FIEC agrees with CASAC and others that data and analytical shortcomings and research gaps are serious problems which should be addressed before a revised standard is adopted. EPA's proposed decision to establish a fine particle standard is flawed because it fails to address numerous sources of uncertainty. In its June 13, 1996, closure letter CASAC stated that there are ``many unanswered questions and uncertainties associated with establishing causality of the association between PM<INF>2.5</INF> and mortality.'' EPA's decision to regulate PM<INF>2.5</INF> in the face of these uncertainties, cannot be justified. The agency has ignored a number of pertinent scientific issues in its overall approach to the review and risk assessment process. These include: <bullet> contradictory results of other investigators (such as Drs. Moolgavkar, Roth, Stryer and Davis) as compared with those of the researchers emphasized in the SP; <bullet> the paucity of PM<INF>2.5</INF> data and EPA's reliance on a single nationwide PM<INF>2.5</INF>/PM<INF>10</INF> ratio; <bullet> no access to PM<INF>2.5</INF> monitoring data for outside review and analysis; <bullet> a lack of supporting toxicological and human clinical data; <bullet> little correlation between central monitors and personal exposure; <bullet> substantial measurement error associated with monitoring of ambient particulate matter; <bullet> insufficient link between the epidemiological results and a specific component of air pollution (size or chemical composition); <bullet> the confounding influence of meteorological conditions such as temperature and humidity, and other environmental irritants, allergens and agents; and <bullet> no identified biological mechanism--that is, the lack of an identified physical cause for the alleged adverse health effects. EPA has greatly oversimplified its approach to assessing the risk associated with exposure to fine particles. EPA's approach: <bullet> generates misleadingly precise estimates of risk; <bullet> greatly understates the degree of uncertainty associated with those risk estimates by not considering uncertainty about PM- health endpoint causation, nor does it consider, if PM is causal, uncertainty about the identity of the causative agent(s); and <bullet> produces inflated risk estimates by ignoring the confounding effects of copollutants and meteorological variables, as well as background levels of particulate matter. The most fundamental concern about the PM risk assessment and EPA's reliance on it for its proposed decision is the agency's failure to consider, or even to acknowledge sufficiently, the important uncertainties noted above. Instead, the risk assessment simply assumes that PM causes excess mortality and morbidity and that all PM species within a particular size range contribute equally to that risk, solely in proportion to their mass. Such assumptions substantially underestimate health risk uncertainty, implying a greater degree of certainty than actually exists. EPA's proposed decision also does not account adequately for confounding bias in the epidemiological studies. The influence of confounders, such as stressful meteorological conditions and copollutants, has not been considered adequately by the agency. Much of the quantitative analysis in the SP which EPA relies on in its proposed rule is based inappropriately on studies which do not consider adequately these confounders. The final CD (page 13-92, 93) states, ``. . . confident assignment of specific fractions of variation in health endpoints to specific air pollutants may still require additional study.'' Similarly, the SP states ``. . . a more comprehensive synthesis of the available evidence is needed to evaluate fully the likelihood of PM causing effects at levels below the current NAAQS,'' and ``[a]s noted above, it is too difficult to resolve the question of confounding using these results from any single city because of the correlations among all pollutants'' (page V-54). EPA dismisses the recent reanalyses of PM<INF>10</INF> and total suspended particulate (TSP) epidemiological studies presented by the Health Effects Institute (HEI) and others which conclude a single causative agent cannot be identified among components of air pollution. EPA also ignores inconsistent and contradictory findings which resulted when different investigators analyzed data from the same location, e.g., Philadelphia, Steubenville, Utah, Birmingham and London. Another major problem with the agency's proposal is that almost all the epidemiological studies upon which it relies uses PM<INF>10</INF> or even TSP as the metric. EPA's Federal Register notice notes that of 38 daily mortality analyses listed in Table 12-2 of the Criteria Document ``most found statistically significant associations'' between PM and mortality. EPA fails to note that only two of those studies used PM<INF>2.5</INF> as the metric. Moreover, the two studies that used PM<INF>2.5</INF> do not support EPA's proposed decision to establish fine particle standards. Importantly, neither study analyzed copollutants, and the results do not indicate that fine particles are the causative agent. The agency proposal relies on studies that were conducted with data sets that have not been included in the docket for analysis by other investigators, as required by law. One key data set which falls into this category is the Harvard School of Public Health data consisting of particulate matter data for the ``Six Cities'' study. As noted by EPA in the SP and at other forums, the results of this study played a leading role in the development of the proposed rulemaking. FIEC urges EPA to comply with the Clean air Act and make these data sets available in the rulemaking docket for assessment by other investigators. Further, FIEC recommends EPA reaffirm existing PM standards at least until such time as these assessments are complete, and conflicting conclusions are resolved. It should be noted that as early as May, 1994, in a letter to EPA Administrator Browner from CASAC, the agency was asked to ``take steps to assure that crucial steps linking exposure to particulate matter and health responses are available for analysis by multiple analytical teams. . .'' The CASAC letter also requested that ``the EPA should take the lead in requesting that investigators make available the primary data sets being analyzed so that others can validate the analyses.'' The agency has noted that a biological mechanism by which PM<INF>2.5</INF> could cause health effects has not been identified. Existing animal and chamber studies do not support a causal link between PM<INF>2.5</INF> and mortality or morbidity. FIEC agrees with the conclusion reached in a January 5, 1996, letter by many members of CASAC that ``the case for a PM<INF>2.5</INF> standard is not compelling.'' This was reiterated numerous times at the May 16-17, 1996, CASAC meeting. The revised CD itself concludes, ``A number of studies using multiple air pollutants as predictors of health effects have not completely resolved the role of PM as an independent causal factor'' (page 13-92). Since EPA has not established that fine particles are causing health effects, the proposed decision to establish new fine particle standards is not justified, and control programs designed to attain them would waste billions of dollars in unnecessary emission control costs. If, on the other hand, PM-health endpoint associations later prove to be causative and the causative agent(s) have not been controlled sufficiently (or at all), billions of dollars spent on the wrong emission control measures will have been wasted, with no public health improvement. Ozone According to CASAC, EPA's own analysis shows that none of the ozone standards under consideration by the agency--including one about as stringent as the current standard--is ``significantly more protective of the public health.'' The significant uncertainties surrounding the agency's scientific basis for the new standard, considered together with the agency's acknowledgement that the costs of implementing the proposed new NAAQS for ozone could far exceed any benefit to be gained from the new standard, undermine any public policy justification for moving forward with the proposal. The agency simply has not made the case that the new standard is a necessary or appropriate regulatory response to a significant public health risk. Chamber Studies The chamber studies, on which EPA relies to support its proposal, are not representative of actual ozone exposure patterns recorded at monitoring stations or experienced by individuals. The activity patterns under which these lab studies were performed clearly do not represent daily patterns of sensitive populations targeted by the standards, and the concentration and exposure patterns do not represent actual patterns recorded at monitoring stations or experienced by individuals. Serious artifacts were introduced through experimental methods used in these studies, including the methods by which the ozone was produced and the composition of the air that was breathed by participating individuals. These studies clearly do not provide consistent, unambiguous results on which to base the proposed new standards. Camp Studies EPA also relies on a series of camp studies to support the proposed standards. The principal limitation of these studies is the inability to separate the influence of a single constituent, in this case ozone, from other potential environmental irritants. These irritants could include weather factors such as high temperatures, and naturally- occurring irritants such as pollen and organic compounds. None of the camp studies is capable of identifying the contributing influence of a single constituent within the air mixture. Risk Assessments for Outdoor Children and New York City Hospital Admissions These data do not support the need for more stringent standards. After carefully reviewing the EPA Staff Paper, CASAC in its November 30, 1995, closure letter stated: [B]ased on the results [of the two risk assessments], the Panel concluded that there is no 'bright line' which distinguishes any of the proposed standards (either the level or the number of allowable exceedances) as being significantly more protective of public health. For example, the differences in the [estimated] percent of outdoor children responding between the present standard and the most stringent proposal (8-hour, one exceedance, 0.07 ppm) are small and their ranges overlap for all health endpoints. [The initial results presented in the Staff Paper for risk assessment for hospital admissions, suggest considerable differences between the several options. However, when ozone-aggravated asthma admissions are compared to total asthma admissions, the differences between the various options are small]. A closer examination of the hospital admissions risk assessment shows that greater improvements in public health would be realized through attainment of the existing ozone NAAQS (from the ``As Is'' case to the ``Existing Standard'' option) than reliance on any of the alternative standards under consideration by EPA. CASAC could not link any improvement in public health to the adoption of any of the alternative options considered by EPA and ultimately concluded that ``the selection of a specific level and number of allowable exceedances is a policy judgment.'' conclusion Because the proposed new NAAQS for fine particulate mater and ozone would impact each segment of the food production supply chain without any reliable indication of benefit to public health, FIEC urges EPA to reaffirm the current standards and initiate a targeted research program to resolve the serious and pertinent questions raised in CASAC's review of the scientific basis relied on by the agency to support the proposed rule. FIEC appreciates the opportunity to comment on this rulemaking. Sincerely, American Bakers Association, American Frozen Food Institute, American Meat Institute, Biscuit & Cracker Manufacturers Association, Chocolate Manufacturers Association, Grocery Manufacturers of America, Independent Bakers Association, Institute of Shortening & Edible Oils, International Dairy Foods Association, Midwest Food Processors Association, National Agricultural Aviation Association, National Cattleman's Beef Association, National Confectioners Association, National Food Processors Association, National Oilseed Processors Association, National Pasta Association, Northwest Food Processors Association, Snack Food Association, Tortilla Industry Association. ______ National Caucus of Environmental Legislators, Washington, DC, April 28, 1997. President William J. Clinton, The White House, Washington, DC. Dear President Clinton: This month the Nation celebrates the 27th anniversary of Earth Day. At the time of this observance, one of our most important public health issues and environmental concerns, is the Clean Air health standards proposed by the United States Environmental Protection Agency (EPA) to update the National Ambient Air Quality Standards (NAAQS) for ozone and particulate matter. The National Caucus of Environmental Legislators (NCEL) was established by like-minded State legislators who share the bipartisan goal of States' involvement in protecting the environment. For these reasons, and to counter the campaign of misinformation of those opposed to strengthening public health standards, we urge your Administration to adopt air quality standards which protect the health of all our citizens. State governments, acting in partnership with the Federal Government, play an indispensable role in the effort to protect natural resources and combat environmental degradation and pollution. State implementation of Federal law is the cornerstone of our current system of environmental protection. States are particularly dependent upon the State-Federal partnership and Federal pollution control laws when dealing with the interstate migration and affects of pollutants. Federal, uniform standards of air pollution are essential; State lawmakers universally recognize that air pollution does not respect State boundaries. For this reason, we applaud EPA's efforts to address ozone and particulate matter ambient air pollution at the Federal level. We support the concept that health standards for air pollutants should be based on peer reviewed science and designed to better protect human health. According to that scientific data, the current standards for ozone and particulate matter, in place since 1979 and 1987, respectively, are inadequate to protect our children, the elderly and the one-third of the American population who suffer from some form of respiratory ailment. As State legislators, we have a responsibility to ensure that all of our constituents are able to breathe clean air, giving special attention to sensitive populations such as children, the elderly and individuals with pre-existing respiratory diseases. We expect EPA to set clean air standards which will achieve this objective. To implement these standards we expect EPA to provide sufficient funding to monitor and to characterize these pollutants so that States have the resources necessary to determine when, where and how often the new standards are exceeded. According to EPA's estimates, the new particulate matter standards would save at least 15,000 lives each year, and the new ozone standard would result in up to 400,000 fewer incidents of aggravated coughing or painful breathing and 1.5 to 2 million fewer incidents of decreased lung functions. Furthermore, the updated standards would benefit millions of Americans by decreasing incidences of breathing problems, asthma attacks, bronchitis, and heart and lung disease. These new standards are supported by 19 of 21 members of the Clean Air Scientific Advisory Committee. In addition, a recent EPA study of the costs and benefits of the Clean Air Act from 1970 through 1990 found that every dollar spent on clean air regulation compliance resulted in $45 in benefits to public health and the environment. With respect to the air quality standard for ozone, EPA determined that the current standard is inadequate to protect human health, and EPA's Clean Air Scientific Advisory Committee unanimously recommended that the standard should be based on an 8-hour exposure to ozone. Over 180 scientific studies on the effects of ozone found that serious health problems occur at exposure levels lower than the current standards, and that longer exposures may have more significant consequences. We understand that these new standards will challenge State and local government to develop better air pollution control programs. The costs these standards impose are appropriately considered in the implementation process; the standards themselves should reflect solely the best scientific information on the effects of air pollutants on public health. In conclusion, based on the near unanimous findings of the EPA's Clean Air Scientific Advisory Committee, we support efforts to assure Federal clean air standards for ozone and particulate matter protect the health of all Americans, especially our children. Respectfully, Senator Richard L. Russman, New Hampshire. Delegate Leon G. Billings, Maryland. Senator Byron Sher, California. Senator Rebecca I. White, West Virginia. Representative Andy Nichols, Arizona. Representative Deborah F. Merritt, New Hampshire. Assemblyman Richard Brodsky, New York. Delegate James Hubbard, Maryland. Representative Jay Kaufman, Massachusetts. Assemblywoman Loretta Weinberg, New Jersey. Representative David Levdansky, Pennsylvania. Representative Ralph Ayres, Indiana. Representative Mary M. Sullivan, Vermont. Representative John R. Bender, Ph.D, Ohio. Representative Brian Frosh, Maryland. Senator Pat Pascoe, Colorado. Representative Joe Hackney, North Carolina. Representative Mary Ellen Martin, New Hampshire. ______ Northeast States for Coordinated Air Use Management, March 24, 1997, Senator James Inhofe, Russell Senate Office Building, Washington, DC. Dear Senator Inhofe: On behalf of the Northeast States for Coordinated Air Use Management (NESCAUM), a regional association of the eight States of Connecticut, Massachusetts, Maine, New Hampshire, New Jersey, New York, Rhode Island, and Vermont, I appreciate this opportunity to express our support for the Environmental Protection Agency's recently proposed revisions to the ozone and particulate matter National Ambient Air Quality Standards (NAAQS). Since 1967, NESCAUM has provided a forum for its member States to exchange information on air quality issues including those related to public health and welfare, and promote regional cooperation on pollution control strategies. Over the past several months, technical and policy staff from the environmental agencies in the eight northeast States have carefully examined EPA's proposed revisions to the NAAQS. Attached are detailed comments that we have submitted collectively, as well as comments supporting the proposed standards submitted independently by Massachusetts, New York, and Vermont. The NESCAUM States support EPA's proposals to revise the ambient air standards for ozone and particulate matter and support the process by which EPA has developed the proposed revisions. By relying on input received from independent national experts from academia, industry, and other organizations, EPA has rightly concluded that the primary ozone and particulate standards must be tightened in order to protect public health. We commend EPA on effectively utilizing the Clean Air Science Advisory Committee peer review process. The primary mission of the environmental agencies in the Northeast is to protect public health and welfare. We firmly believe that the standards for ozone and particulate matter must be based solely on the best scientific assessment of the need to protect the public health and welfare. Some have commented that EPA should apply cost-benefit analysis in setting the standards. To put it simply, setting public health standards based on cost is bad science, bad policy, and just plain wrong. The public has a right to know when its health is at risk, particularly when individuals can take cautionary actions to diminish their exposure to harmful air pollutants. Cost considerations are now and shall remain paramount as we move to adopt and implement pollution control strategies necessary to achieve health-based standards. As any environmental regulator can attest, it is virtually impossible to impose an air quality control requirement that cannot be justified on economic grounds. The question is not whether we factor cost into our analysis, but when. The appropriate answer is in implementing programs, not when determining the levels of pollutant concentrations that are needed to protect public health. ozone standard The NESCAUM States support the level and form of the primary ozone standard proposed by EPA (8-hour, 80 parts per billion). Although there is no exposure threshold that guarantees absolute protection for the entire population, we believe that the level of the 8-hour standard as proposed (80 parts per billion) is clearly more effective at protecting public health than the current standard. The 8-hour averaging time more realistically reflects the true regional nature of the ozone problem and will encourage more rational control strategies. Moreover, the form of the proposed ozone standard correctly targets areas with chronically elevated pollution levels. Under the proposed regime, States will be far less vulnerable to bouncing between attainment and nonattainment status on the basis of changes in summertime weather. Having standards that reflect current scientific understanding of ozone formation will lead to more effective control programs. The existing standards reflect the outdated belief that ozone is a local, urban problem. In 1991, a National Research Council committee, synthesizing the best available information on ozone formation and transport in the eastern United States, observed that: High ozone episodes last from 3-4 days on average, occur as many as 7-10 times a year, and are of large spatial scale: >600,000 km\2\. Maximum values of non-urban ozone commonly exceed 90 ppb during these episodes, compared with average daily maximum values of 60 ppb in summer. An urban area need contribute an increment of only 30 ppb over the regional background during a high ozone episode to cause a violation of the National Ambient Air Quality Standard (NAAQS) [120 ppb] in a downwind area. . . . Given the regional nature of the ozone problem in the eastern United States, a regional model is needed to develop control strategies for individual urban areas. (National Research Council. 1991. Rethinking the ozone problem in urban and regional air pollution. National Academy Press. Washington, DC. pp. 105-106). In recognition of the need for regional controls, the NESCAUM States have urged EPA to develop and implement national control programs such as those currently proposed to address ozone precursor emissions from heavy duty diesel engines, consumer and commercial products (e.g., Architectural and Industrial Manufacturing Rules), standards on locomotive engines, rules affecting heavy duty highway and off-road vehicles, and controls including utility controls which may arise out of conclusions from the work of the Ozone Transport Assessment Group (OTAG). Our efforts to adopt effective reduction strategies will be greatly enhanced by having a standards regime that correctly reflects the physical reality of ozone formation. For a fuller discussion of the regional nature of our ozone problem see the attached report entitled ``The Long-Range Transport of Ozone and Its Precursors in the Eastern United States.'' particulate matter standard The NESCAUM States also believe that the regional nature of fine particulate matter will be effectively addressed by the proposed annual fine particulate matter standard. Based on our review of the available science, the levels proposed by EPA should motivate substantial reductions in regional levels of PM<INF>2.5</INF> and provide protection against high pollution concentrations that may occur on a day to day basis. The epidemiological evidence is extremely compelling and indicates that the existing particulate matter standard (PM<INF>10</INF>) is not sufficient to protect people from a range of serious health effects associated with fine particulate matter. Cumulative long-term exposures to high pollution concentrations are of great concern, and the proposed annual PM<INF>2.5</INF> standard will provide protection against these high levels. This annual standard is likely to be especially important in the NESCAUM region since there appears to be a significant regional problem in which long-range pollution transport, particularly of sulfates, nitrates, and organic aerosols, and soot plays a major role. It should be noted that the Northeast States recommended a tighter daily standard in previous testimony (in Philadelphia, PA, July 25, 1996), and we have asked EPA to closely examine the daily standard to ensure that it adequately protects against exposure to local ``hotspots''. conclusion We believe that implementation of revised standards can result in more rational, equitable, and effective emission reduction strategies. Moreover, by integrating the implementation of the ozone and particulate matter standards, we believe that EPA and the States will achieve important public health improvements using the most cost- effective and flexible means available. Thank you, again, for this opportunity to present the Northeast States' support of EPA's proposed ozone and PM standards. [GRAPHIC] [TIFF OMITTED] T6586.471 [GRAPHIC] [TIFF OMITTED] T6586.472 [GRAPHIC] [TIFF OMITTED] T6586.473 [GRAPHIC] [TIFF OMITTED] T6586.474 [GRAPHIC] [TIFF OMITTED] T6586.475 [GRAPHIC] [TIFF OMITTED] T6586.476 [GRAPHIC] [TIFF OMITTED] T6586.477 [GRAPHIC] [TIFF OMITTED] T6586.478 [GRAPHIC] [TIFF OMITTED] T6586.479 [GRAPHIC] [TIFF OMITTED] T6586.480 [GRAPHIC] [TIFF OMITTED] T6586.481 [GRAPHIC] [TIFF OMITTED] T6586.482 [GRAPHIC] [TIFF OMITTED] T6586.483 [GRAPHIC] [TIFF OMITTED] T6586.484 [GRAPHIC] [TIFF OMITTED] T6586.485 Statement of the United Steelworkers of America, AFL-CIO.CLC The United Steelworkers of America represents 540,000 workers in the United States. Our ranks also include 281,000 retired American members. Most of our members work in the steel, rubber, chemical, mining, nonferrous metals, and general manufacturing industries which are major contributors to particulate and ozone pollution. They live in the urban and industrial areas most affected by particulates and ozone. Their families have much to gain from properly considered regulations which reduce the risk of dirty air--and much to lose should poorly crafted ones cause serious economic dislocation in our major extractive and manufacturing industries. We take a keen interest in this rulemaking. 1. the proposed standards The USWA supports EPA's proposals for PM<INF>2.5</INF> and ozone. Under the Clean Air Act, the primary air quality standards must be based on health considerations alone. The evidence currently in the record is more than sufficient to establish the need for strengthening the NAAQS for ozone, for adding a new standard for fine particulates, and for modifying the averaging methods for determining compliance. In developing the proposals, the EPA staff considered more than 5,000 scientific studies and medical reports. This review was the most extensive EPA has ever conducted for public health standards. The two largest studies--the Harvard six-city study and the American Cancer Society study--found increased mortality at particulate levels well below the current standards. Other, smaller studies were consistent with these findings. EPA estimates that the particulate standard alone will prevent 20,000 premature deaths per year; the Natural Resources Defense Council estimates 64,000 deaths per year from fine particulate pollution. The evidence suggests that the excess mortality primarily is due to fine particulates, less than 2.5 micrometers in diameter. The studies also show a strong link between ground-level ozone and decreased lung function, increased asthma, and more severe respiratory infections. Fine particulates and ozone disproportionately affect children and the elderly. Taken as a whole, the studies are compelling. We believe that EPA has clearly demonstrated that the new PM<INF>2.5</INF> standard and the revised ozone standard are necessary to protect public health. EPA has also proposed a change in the averaging method for the current PM<INF>10</INF> standard, to one based on the 98th percentile of the distribution of monitored concentrations at the highest monitor. It has been charged that this method is less stringent than the current method based on one allowed exceedance per year. However, the proposed statistical method gives a much fuller picture of the actual situation, and will result in a more realistic determination of the need for additional controls. We support the change. 2. additional research EPA's proposals are well supported by the current evidence. However, additional research is essential. We do not yet know the ambient levels of PM<INF>2.5</INF> in most parts of the country. We do not have a clear picture of how the sources and the components of PM<INF>2.5</INF> vary by region. We do not have a sufficient understanding of how existing programs aimed at PM<INF>10</INF> affect ambient concentrations of PM<INF>2.5</INF>. These issues are critical to the intelligent design of control strategies. Direct, government- funded research into process-specific control technology would also help industry meet the new standards. Further research might also help us refine the standards themselves. It is possible that PM<INF>2.5</INF> is not the best particulate fraction on which to concentrate. It has also been suggested that most of the health risk is caused by particular species within PM<INF>2.5</INF>, such as acid aerosols or reactive metals. For these reasons, EPA, in cooperation with the National Institute for Environmental Health Sciences, should commit to an aggressive program of research. The program should not be used to delay implementation of the revised standards; however EPA should be willing to modify those standards should the research so indicate. 3. implementation The USWA is grateful for EPA's willingness to add us to the Subcommittee for the Development of Ozone, Particulate Matter and Regional Haze Implementation Programs. Although the Subcommittee is already very large, we hope it will be open to other labor organizations who may wish to join. Plant workers, acting through their unions, have much to contribute to a discussion of effective controls. National ambient air quality standards are based on health considerations alone. This puts a special burden on those who must devise strategies for meeting the standards. Public health will not be protected by implementation strategies which clean the air only at the cost of massive economic dislocation. Economics becomes important in the next phase of this effort, as we explore different control options. Unfortunately, EPA's economic analysis usually focuses on the overall cost of a regulation to the affected industries or to the economy as a whole. We believe that employment is a much more important consideration. Employment and income are strongly correlated to health. Other economic variables are not. EPA should work toward compliance methods which protect, and if possible increase, the level and quality of employment. While the current phase of rulemaking is concerned only with health risks, much of the public debate has centered around a supposed conflict between jobs and environment. Our experience teaches a different lesson. Improving the environment usually creates jobs. Some of our members make pollution control equipment. Others make the steel, aluminum, rubber, plastic and glass that goes into it. Others design, install, operate and maintain the equipment. An increasing number of jobs in our union, and in the workforce generally, depend on environmental protection. Of course, it is possible to devise control strategies that really do destroy jobs, but that need not happen. Protecting the environment while protecting jobs will take careful planning, and the cooperative efforts of industry, labor, government at all levels, and the environmental community--but it is possible, and it is essential. EPA should do all it can to facilitate the process. CLEAN AIR ACT: OZONE AND PARTICULATE MATTER STANDARDS ---------- THURSDAY, JULY 24, 1997 U.S. Senate, Committee on Environment and Public Works, Subcommittee on Clean Air, Wetlands, Private Property, and Nuclear Safety, Washington, DC. IMPLEMENTATION STRATEGY The subcommittee met, pursuant to notice, at 10:56 a.m. in room 406, Dirksen Senate Office Building, Hon. James Inhofe (chairman of the subcommittee) presiding. Present: Senators Inhofe, Thomas, Hutchinson, Graham, Allard, and Sessions. OPENING STATEMENT OF HON. JAMES M. INHOFE, U.S. SENATOR FROM THE STATE OF OKLAHOMA Senator Inhofe. The subcommittee will come to order. The purpose of today's hearing is to examine the EPA's implementation plan for the new ambient air quality standards for ozone and particulate matter, and I want to emphasize the word ``plan'' because what the EPA is planning today is not necessarily what will happen tomorrow. I don't think their plan is based on reality and, therefore, will not happen. First, from what I read the EPA is rewriting the Clean Air Act and their plan is outside of congressional authority. Congress has not given authority to the EPA to do the following: a cap and trade program for utility emissions. I understand that, of course, we do have the cap and trade program in other areas, such as acid rain. But it is my position that we do not have it in this case. Second, to maintain two different ozone standards at the same time. This is somewhat controversial. But it's my understanding that they will be attempting to maintain the ozone standards at .12 in some areas, and at the same time .08 in other areas. Third, a transitional reclassification system. It's my feeling and my interpretation that the authority is only there for attainment or nonattainment. These are just some examples of areas where I believe the EPA is trying to exceed their legal and congressional authority. Because they lack authority, they open themselves up to numerous possible lawsuits by States and regulated community and private citizens' suits. They have already been sued under SBREFA, the Small Business Regulatory Enforcement Act. The result of these suits will be a court implementation plan which ignores the flexibility in safeguards the EPA is promising, and which makes those flexibility promises meaningless. To understand this one only has to look at the past history of the Agency. As Senator Santorum said in Tuesday's Ag hearing, the EPA talks about flexibility, but never delivers. You only have to look at recent EPA threats in Pennsylvania and Virginia to see that ``flexibility'' to their mind means ``EPA mandates.'' Furthermore, whenever EPA talks about flexibility implementation, or stretching out requirements, they are quickly sued by radical environmental groups, and then the Agency is quick to roll over and enter into binding consent agreements. It is important to note that this frustration is felt not only in Congress, but more so in the States and communities. I received a letter this week from the heads of 13 State environmental agencies calling for congressional intervention to stop these standards because of scientific uncertainties, lack of clear benefits, and questions surrounding the implementation. I would like to enter this letter into the record, and point out to my colleagues on this subcommittee that the States which signed these letters include Oklahoma, Idaho, Alabama, Virginia, and Montana, with all of these States being represented on this committee. The only witness at today's hearing is Mary Nichols, the Assistant Administrator for Clean Air at the EPA. I understand that Ms. Nichols will be leaving the EPA in Washington, DC shortly to return to California. Because of this I thought it would be important to hear how Ms. Nichols believes this will be implemented since all of the planning has occurred under her watch. If and when this is ever fully implemented it is important that a record be built which codifies the EPA's promises. Ms. Nichols, I will say to you that while we have had differences in the past, and we continue to have differences, I think when you get out to California you will have some different views on some of these things, and we'd be more in agreement, and I've always enjoyed working with you. I'll look forward to hearing now from Ms. Nichols. [The prepared statement of Senator Inhofe follows:] Prepared Statement of James Inhofe, U.S. Senator from the State of Oklahoma The hearing will now come to order. The purpose of today's hearing is to examine the EPA's implementation plan for the new National Ambient Air Quality Standards for ozone and particulate matter. I want to emphasize the word plan, because what the EPA is planning today is not necessarily what will happen tomorrow. I do not think their plan is based on reality and therefore will not happen. First, from what I read, the EPA is rewriting the Clean Air Act and their plan is outside of Congressional authority. Congress has not given authority to the EPA for the following: <bullet> A Cap and Trade program for utility emissions. <bullet> To maintain two different ozone standards at the same time. <bullet> A transitional classification system. These are just a few examples of areas where I believe EPA is trying to exceed their legal and Congressional authority. Because they lack authority, they open themselves up to numerous possible lawsuits by States, the regulated community, and private citizen suits. They have already been sued under SBREFA. The result of these suits will be a court directed implementation plan which ignores the ``flexibility'' and safeguards the EPA is promising and which makes those flexibility promises meaningless. To understand this one only has to look at the past history of the Agency. As Senator Santorum pointed out in Tuesday's Agriculture hearing, the EPA talks about flexibility but never delivers. You only have to look at recent EPA threats in Pennsylvania and Virginia to see that flexibility to their mind means EPA mandates. Furthermore, whenever EPA talks about flexible implementation or stretching out requirements they are quickly sued by radical environmental groups and the Agency is quick to roll over and enter into binding consent agreements. It is important to note that this frustration is felt not only in Congress, but more so in the States and communities. I received a letter this week from the heads of thirteen State environmental agencies calling for Congressional intervention to stop these standards because of the scientific uncertainties, lack of clear benefits, and questions surrounding the implementation. I would like to enter this letter into the record and point out to my colleagues on the Committee that the States which signed included Oklahoma, Idaho, Alabama, Virginia, and Montana, with all of these States being represented on this Committee. The only witness at today's hearing is Mary Nichols, the Assistant Administrator for Air at the EPA. I understand that Ms. Nichols will be leaving the EPA and Washington, DC. shortly to return to California. Because of this I thought it was important to hear how Ms. Nichols believes this will be implemented since all of the planning has occurred under her watch. If and when this is ever fully implemented it is important that a record be built which codifies the EPA's promises. I look forward to hearing how Ms. Nichols believes this will be implemented and I wish her luck in her future endeavors. Senator Inhofe. I see that the ranking minority is here, Senator Graham. First of all, I think you want to get on record voting on the nomination, the Clark nomination. Senator Graham. Yes, Mr. Chairman. Thank you, and I have done so with our committee staff. I might have an opening statement to file. I thank you for convening this hearing and look forward to receiving the testimony of the witnesses. Senator Inhofe. Thank you, Senator Graham. I've been informed by the staff that you probably should be on record with your vote on S. 399, the McCain bill, and then S. 1000 and S. 1043. These are naming bills you are familiar with. Senator Graham. I would like to be recorded aye on all those. Senator Inhofe. Thank you, sir. Senator Thomas. OPENING STATEMENT OF HON. CRAIG THOMAS, U.S. SENATOR FROM THE STATE OF WYOMING Senator Thomas. Thank you, Mr. Chairman. Thank you for holding this hearing, to discuss ozone and particulate matters, standards promulgated by EPA. Since EPA released the proposed regulations in November, this committee has held numerous hearings regarding this matter, and heard concerns of many of the Nation's Governors, State, county and local officials and the business community. Furthermore, we've heard from the scientists on EPA's own Clean Air Scientific Advisory Committee, heard them testify there's no bright line, and that they need more time to conduct additional research into PM and ozone. Unfortunately EPA and the Administration have refused to listen. President Clinton endorsed EPA's standards in spite of public opposition from more than 250 Members of Congress, 27 Governors, labor unions and many small businesses throughout the country. These standards could end up being the most expensive in history, and severely limiting economic growth. With so many areas of the country having problems meeting current environmental standards, these regulations could throw new counties into nonattainment. Additionally, these counties currently in nonattainment will probably never reach compliance. It's my understanding that Administrator Browner has been meeting with Members of Congress and various industries, telling them not to worry about the new rules because they won't affect their interests. Most recently she informed the agricultural community of that when she testified before the Ag Committee earlier this week, Mr. Chairman. It seems that EPA's really doing some soft-pedaling on the impacts of the new air quality rules and, in fact, perhaps distorting the facts. I'm interested in Ms. Nichols telling us how EPA can guarantee these promises when they don't even know what the 50 States will end up regulating. I've always had strong reservations about EPA's regulations and do not believe that Congress will back them. The chairman of this subcommittee has done an outstanding job on this issue, and I intend to help him in any way I can. I do support additional research and was pleased the Senate passed the EPA- HUD and the Independent Agencies appropriation, which included funding for PM<INF>2.5</INF> research. It's my intention to work with the Appropriations Committee in guiding that on through. So, Mr. Chairman, I'm anxious also to hear what Ms. Nichols has to say about the real implementation strategy. It may change tomorrow, but it is our duty to exercise oversight and determine if the EPA has legal authority to do the things it claims it will do, and I appreciate your having the hearing. Thank you. Senator Inhofe. Thank you, Senator Thomas. Senator Hutchinson. OPENING STATEMENT OF HON. TIM HUTCHINSON, U.S. SENATOR FROM THE STATE OF ARKANSAS Senator Hutchinson. Thank you, Mr. Chairman. Ms. Nichols, I also want to join in the chorus wishing you the best in California, and your new endeavors out there. Thank you for coming today, and Mr. Chairman, thank you for taking such an active role on these proposed air standards, and the hearings that we've now had. As I've said repeatedly, it seems out of those hearings that one thing was clear--there's an awful lot that is unclear; there's a lot of difference among scientists. That is why I have the position that it is far better for us to seek more data, have more time before we implement standards that are going to have such a dramatic impact. Arkansas is a rural, primarily agricultural State. It is growing, but it currently has a relatively small amount of heavy industry and a relatively small population, two and a half million. Now, that is exactly the type of State that one would think was going to be minimally impacted by EPA standards on ozone and particulates. Unfortunately, that's just not the case. It is already anticipated that several counties in eastern Arkansas are going to be out of attainment under these new standards. One county, Crittenden County, is already out of attainment for ozone and, as the Mayor of west Memphis, AR said, would be out of attainment even if the entire city was plowed up and used for farmland. With Memphis so close, right across the river, there's just very little that west Memphis can do to achieve air quality under the guidelines of the EPA. Other counties, such as Arkansas County and Ashley County, are almost exclusively agricultural in nature. Ms. Browner testified before the Agriculture Committee on Tuesday, and has repeatedly asserted, that agriculture would not be affected by these new standards. And she would assure through Secretary Glickman that that would not be the case. The reductions could be achieved and attainment realized by going after big power plants. Well, that's fine, except that in Arkansas and Ashley Counties they don't have any power plants. It's all agricultural. One county that does have a power plant is Jefferson County, where Pine Bluff is, just to the west of Arkansas County, but according to EPA's own documents they will ``not'' be out of attainment. But to me that creates an interesting paradox, how you get two counties that are agricultural that are out of attainment with no power plant. You have Jefferson County, with a power plant, that's going to be in attainment. If you go after the power plant you are not going to solve the problem of the two agricultural counties. So I think agriculture is going to take a beating in the United States over the next few years between what the EPA wants to do with ozone and particulates, and what the Administration is saying they want to do in relation to global climate and the effects on an agricultural State like Arkansas. Those effects will be overwhelming. But really what we are seeing with PM and ozone is really step one, with the conference in December possibly leading us to step two, which will be equally devastating. So I appreciate the hearing today. I look forward to the testimony. Mr. Chairman, there's been much said about children, and I think about the tremendous costs of these new standards, and if we would take just some of those resources and put that into children's health care, put that into asthma research. The evidence seems clear to me that changing the ozone standards is not going to--the big question is, how many lives does that save? How much impact does that have on asthma? If we really care about children, the enormous costs associated with these new standards, we could take that, put that in children's health care, and do far more to benefit the children of this country. But I look forward to the testimony and I thank you for calling the hearing. Senator Inhofe. Thank you, Senator Hutchinson. We have plenty of time for the remainder of the opening statements. Senator Allard. OPENING STATEMENT OF HON. WAYNE ALLARD, U.S. SENATOR FROM THE STATE OF COLORADO Senator Allard. Thank you, Mr. Chairman. Again I'd like to thank you. I think you are doing a great job of pursuing this particular issue. We do need to have a number of hearings in order to get a thorough understanding of what these regulations do and don't do, and understand the science that's behind them. I come from a State that's rather unique. It's one of the fastest growing areas in the whole country. Because of our high altitude we have some particular problems related to the high altitude is- sues, and I think that's an issue that we have to deal with in our States that other States probably don't have to deal with, and obviously what science we do in relation to that, I'd be very interested in. I have a newspaper clipping here in front of me that talks about how these rules and regulations in effect are going to increase the particulate matter in Denver, and it's an article in the--and if you have time to address that, I may not be here to ask that question because I do have a bill up in another committee. If I get back I'll probably bring that question back for you to answer. But even if you don't get a chance to answer it here in the committee, I'll try and submit a question to you. You can come back to us in writing. Also, Carol Browner had made a number of comments in front of the Ag Committee here on the Senate side, and I have some questions in regard to that. I'm not sure the rules and regulations allow, on the Clean Air provision, any agency to set out a certain group to be treated differently from anybody else, and when you keep that in mind, she says it's not going to have any impact on agriculture. I have a hard time understanding how it's not going to have an impact without a provision in there that would allow her to set out a certain group as exempt from provisions. I just don't think those are there, but maybe I need some education in that regard. So I think the bottom line is that these new rules and regulations that are being proposed are going to affect everybody in this country. I think people have to understand fully how it's going to affect them, how much it's going to cost, and best we can to educate the science behind it, and for that reason I commend the Chairman and commend those that are going to testify today for your input on this most important issue. Thank you very much. Senator Inhofe. Thank you, Mr. Allard. Senator Allard--I would also observe agriculture isn't the only area that she said would be exempt. The Conference of Mayors is going to be exempt and small business and others, so we'll need to find out how they are going to do that. Senator Sessions. OPENING STATEMENT OF HON. JEFF SESSIONS, U.S. SENATOR FROM THE STATE OF ALABAMA Senator Sessions. Thank you, Mr. Chairman. I really do believe this is an important subject for our Nation to deal with, and it must be confronted honestly and directly. The air does appear to be getting cleaner in America, because we took some tough stands and we've made progress and we're continuing to make progress. But as we accelerate the demands to reach an even more naturally pure level of air, it adds costs to our Nation. It seems to me that costs can get so high that it does, in fact, make us noncompetitive in the world marketplace. There is a limit to which we can burden ourselves. It seems to me, Mr. Chairman, there's no difference between a tax and a regulation. There's no difference in telling the Tennessee Valley Authority that they've got to spend $2 billion, and that's what the Director testified here, that he thought these regulations would cost them on their clean air requirements, to spend $2 billion on improving the air, which they are passing on to the ratepayers in that regard or imposing a tax of $2 billion, and so there the power industry serves America. It serves people. To burden them extraordinarily is a burden on the average rate payer. It's a tax on the rate payer, and we ought to ask ourselves if we're going to have the TVA rate payers pay $2 billion in extra regulative fees, or tax fees? Would it be better, as Senator Hutchinson says, to spend that money on asthma research, or emphysema research, or heart research, or AIDS research? This is an appropriation of the resources of our Nation. It just cannot be done without being oblivious to the impact it has on the Nation's wealth, and how it ought to be allocated for the overall good of America, and since we do have the reports of the CASAC committee, EPA's own committee, questioning the benefits from it, I just think that I don't want to be involved. I don't want to have to question these issues. I know you don't, Mr. Chairman. We do not want to be here. But we've got to be here because we're charged with setting public policy for America, and I hope that we can ask the questions honestly, and not be intimidated by political maneuverings, and try to do what's right for the country. That's what I want to do, and I am interested in proceeding, and thank you for your leadership. Senator Inhofe. Thank you, Senator Sessions. If it's all right Ms. Nichols, we'll recess for just a few minutes, go vote twice, and be right back. [Recess.] Senator Inhofe. We'll reconvene our meeting, and I would acknowledge that Mr. Jonathan Cannon, General Counsel for the EPA, has joined Ms. Nichols at the table, and we welcome you also, and while we normally have opening statements confined to 5 minutes, we won't confine you to 5 minutes, Ms. Nichols, because you are the only witness today. So we recognize you now for opening statements. I would observe that several others are up behind me and will be here shortly. STATEMENT OF MARY D. NICHOLS, ASSISTANT ADMINISTRATOR FOR AIR AND RADIATION, ENVIRONMENTAL PROTECTION AGENCY; ACCOMPANIED BY JON CANNON, GENERAL COUNSEL Ms. Nichols. Thank you, Mr. Chairman. I do have a rather lengthy written statement which I know has been submitted for the record. I will try to keep my opening brief because you raised a number of important questions and I believe other members have questions as well. I do appreciate your interest and your continuing oversight of our---- Senator Inhofe. You might move the microphone closer, if you would please. Ms. Nichols. Yes. The ozone and particulate matter standards, which were announced by the President last month and published last week, are the most significant step we've taken in a generation to protect the American people, and especially our children, from the hazards of air pollution. Together they will protect 125 million Americans, including 35 million children, from the adverse health effects of breathing polluted air. They will prevent approximately 15,000 pre- mature deaths, about 350,000 cases of aggravated asthma, and nearly a million cases of significantly decreased lung functions in children. Clearly the best available science shows that the previous standards were not adequately protecting Americans from the hazards of breathing polluted air. Revising these standards will bring enormous health benefits to the Nation. That is why we took action on clean air. Mr. Chairman, you asked me to come before the committee today to discuss how EPA intends to implement these new air quality standards. In brief, we intend to work closely with the States to take advantage of the recent progress we've made in understanding the regional nature of air pollution, and the most cost-effective ways to reduce it, using the power of the marketplace. We also intend to assure that States making good progress toward attaining the current, or the old standards, will continue that progress, uninterrupted, with a minimum of additional burden. Perhaps the most innovative aspect of this implementation strategy is that it allows the States to use a market trading system to address pollution on a regional scale. The heart of this system is a voluntary trading plan for emissions from utilities, one designed collectively by the 37 States that participated in the Ozone Transport Assessment Group, which we call OTAG, that will address violations far downwind and will provide the most cost-effective pollution reductions by achieving the bulk of reductions from major sources rather than small businesses or farmers. Based on OTAG's recommendations, in September 1997, EPA will propose a rule requiring States in the OTAG region that are significantly contributing to nonattainment or interfering with maintenance of attainment in downwind States to submit State implementation plans to reduce their interstate pollution and describing the trading plan which the States can adopt if they so choose. Based on EPA's review of the latest modeling, a regional approach, coupled with the implementation of other already existing State and Federal Clean Air Act requirements, will allow the vast majority of areas which currently meet the 1-hour ozone standard to meet the 8-hour standard without additional local controls. In addition to this regional approach, EPA will also encourage the States to design strategies for attaining the particulate and ozone standards that focus on getting low-cost reductions first. Such strategies will include the use of concepts such as a Clean Air Investment Fund, which would allow sources facing control costs higher than $10,000 per ton for any of these pollutants, some of which they may exceed by about a factor of four under any controls which are currently required. Anybody who had a cost of over $10,000 per ton would be allowed to pay a set annual amount/ton to fund cost- effective emissions reductions from nontraditional or smaller sources. Compliance strategies like this will likely lower the cost of attaining the standards through more efficient allocation, minimizing the regulatory burden for small and large pollution sources, and serving to stimulate technology innovation as well. To insure that the final details of the implementation strategy are practical, incorporate common sense, and provide for appro- priate steps toward cleaning the air, input is needed from many stakeholders, including representatives of State and local governments, industry, environmental organizations, and Federal agencies. EPA will continue seeking advice from a range of stakeholders, and, after evaluating their input, will propose the necessary guidance to make these approaches work. In particular, EPA plans to continue working with the Subcommittee on Implementation of Ozone, Particulate Matter, and Regional Haze Rules, which EPA established, to develop innovative, flexible, and cost-effective implementation strategies. EPA plans to issue all guidance and rules necessary for this implementation strategy by the end of 1998. EPA will continue to work with the Small Business Administration because small businesses are particularly concerned about the potential impact resulting from future control measures to meet the revised PM and ozone standards. In partnership with the SBA, EPA will work with States to include in their SIPs flexible regulatory alternatives, which minimize the economic impact and paperwork burden on small businesses to the greatest degree possible, consistent with public health protection. In summary, Mr. Chairman, EPA believes that the new ozone and particulate matter standards will provide important new health protection and will improve the lives of Americans in coming years. Our implementation strategy will insure that these new standards are implemented in a cost-effective and flexible manner. We hope to work closely with State and local governments, other Federal agencies, and other interested parties in order to accomplish this goal. Mr. Chairman, that includes my prepared statement, and I look forward to answering your questions. Senator Inhofe. Well, thank you, Ms. Nichols. This is a very obvious question that I've wondered about, Ms. Nichols. Given the EPA implementation schedule of at least 6 years for ozone and, I think, 9 years for PM, and taking into account the new standards issued on--were issued on July 16, and ignoring existing programs, how many lives would be saved in the next 5 years? Ms. Nichols. Mr. Chairman, you're asking about the impact of the new standards on top of the old standards? Senator Inhofe. I'm talking about with those things that were not in the--not going to go on in the absence of the adoption of these standards. Just these standards, which we all agree are not going to go into effect for 6 or 9 years. How many lives in the next 5 years would be saved? Ms. Nichols. I understand the question. Let me answer it this way, if I may. We have not estimated lives saved prior to the time when the standards are expected to be, at least, partially implemented in 2010. What we have said is that we want to layer the new standards on top of the existing standards because we recognize, based on the history of the Clean Air Act in the past, that from the time a standard is set until the time that the actual pollution reductions are being achieved, until you know, when industry has had time to design the technologies, when the regulations have come into effect, does take a period of years, in some cases a decade or more, and so setting the standard just begins that process, and we acknowledge that the setting of the standard, in and of itself, does not cause the health benefits to be achieved. Senator Inhofe. So it's safe to say that zero lives will be saved in the next 5 years? Ms. Nichols. It would be safe to say that the lives that will be saved in the next 5 years are attributable primarily to today's standards, however it would be important, I think, to note that---- Senator Inhofe. The change in standards that would not be in effect for the period of time that we're talking about, 6 years or 9 years, they won't be in effect? Ms. Nichols. Mr. Chairman, this is, I think, where we are having a semantic difference. The standards will be in effect, assuming that Congress doesn't overturn them, the issue is what will people be doing during that period of time, and what we believe people will be doing during that period of time is continuing work on the current, or the old standards, and also beginning the planning for that work that they will be doing on the new standards. So it's correct to say that there will not be new regulations in place, implementing those new standards, but there will be a lot of planning work, and in some cases, I think there will be industries that will choose when they're making decisions about which technologies to purchase or what investments to make, that will be looking toward the new standards. So we will see some actual impact of the standards in terms of---- Senator Inhofe. Will there be one life saved in the next 5 years? Ms. Nichols. The lives that will be saved in the next 5 years, and I don't have a number for those although we could get that for you, will be lives that are attributable to today's standards, I believe, primarily. Although again---- Senator Inhofe. That's today's standards. I'm talking about with the new standards will there be a life saved in the next 5 years? Ms. Nichols. I think it's difficult to quantify whether there would be, based on the choices that people will make in looking toward the new standards, but I think there is a down payment on those new standards that will have an impact, and we'll just have to try to get back to you to see if we can add some additional quantification to that. Senator Inhofe. Well, let's assume then that there won't be any new--any lives saved in the next 5 years. I mean, I still-- I haven't heard anything that you've said that would imply to me or that would persuade me to the notion that any lives are going to be saved in the next 5 years. Ms. Nichols. Let me say it this way, and I---- Senator Inhofe. And then I would have to say, what will we do about what CASAC, and the scientific community would suggest postponing these until such time as science determines whether or not they're--since we're not going to be changing--making the changes anyway? Ms. Nichols. Mr. Chairman, I don't believe that CASAC told us to defer making a decision on the standards. I believe CASAC asked us, by a vote of 19-2, to set a standard for fine particles. There was some dispute, which you have gone into in previous hearings, as to whether the 24-hour or the annual standard should be controlling, what the precise level should be, but there was not a question about whether to set a standard, and the reason for that is that CASAC recognized that the planning work that needs to be done by States and by industries in order to achieve a standard, takes many years to accomplish, and so the setting of the standard only begins that process. You are correct to point out that it won't all be completed within that 5-year period. Senator Inhofe. You can set, but not implement, and you are saying by setting and not implementing there are--there are going to be--there could be some lives saved because this somehow changes behavioral patterns? Ms. Nichols. No, Mr. Chairman. What I am saying is that implementation includes a great deal of planning work, and in the course of doing that planning there will be actual decisions made, actions taken, that will have an effect, but we haven't tried to quantify that. Senator Inhofe. Were you at the Ag hearing on Tuesday? Ms. Nichols. Yes, I was. Senator Inhofe. Carol Browner said, and this is a quote, ``We will have the next 5-year review before anyone reduces pollution.'' Now what parts of this would you implement that would save lives now? I guess that's what I am asking. Ms. Nichols. Mr. Chairman, as the Administrator said, and I agree with this, there are not regulations that will be in effect requiring people to reduce more pollution than is required to be reduced for the old standards prior to the next 5-year review. But because the standards are in effect, there will be people taking actions, and I do believe that some of those actions will, in fact, be beneficial toward attainment of the new, as well as the old, standards. Senator Inhofe. But that Ag hearing on Tuesday, Administrator Browner cited the OTAG program as a way for Eastern States to meet the new ozone standards painlessly. In response to Senator Landrieu's question she identified Louisiana as an example, saying they currently have four parishes in nonattainment and three more new parishes expected. She said that OTAG would provide cleaner air in all seven parishes without requiring new controls in these seven parishes. Does that accurately--do you recall her making that statement? Ms. Nichols. In general that's consistent with what I heard, sir. Senator Inhofe. Well, how will these parishes get cleaner air if they don't have--without any new controls? Ms. Nichols. Ah, the---- Senator Inhofe. Where would the controls be placed to result in cleaner air in Louisiana? Ms. Nichols. The key here is the controls on large generators of electric power and other very large generators who---- Senator Inhofe. Where? Ms. Nichols [continuing]. Who will be located throughout the OTAG region. I'm not aware, sir, of whether there are any power plants located in the parishes that you identified. So I can't respond to that particular part of your question. In general, the power plants are located around the country. In many States they are frequently located in areas or counties that are actually designated as attainment areas today, because the immediate area around that facility may be meeting the standards, but that plant is contributing, because of the problem of long-range transport of pollution, that plant is causing or contributing to a problem---- Senator Inhofe. Where is that plant located that you are referring to? Ms. Nichols. There are many of them. I was saying a plant-- -- Senator Inhofe. Would you say to the west of Louisiana? Ms. Nichols. There are plants probably within Louisiana that are subject to this type of a control program. Senator Inhofe. I was quoting the Administrator when she said that OTAG would provide cleaner air in all seven parishes without requiring any new controls in those seven parishes. Would you conclude that there are no--none of these plants as you'd describe them in those seven parishes? Ms. Nichols. I would have to go back and consult a map of the OTAG region and where the power plants are. What the Administrator was referring to in her testimony is the modeling work that was done by OTAG, in which the States that participated in OTAG did various modeling runs looking at control strategies, and the conclusion was that with a cap on the utility emissions of nitrogen oxides in that region, that includes Louisiana, that every county or parish which would not meet, based on today's data, the new ozone standard would come into attainment. So its based on that modeling work. Senator Inhofe. But she said no new controls would take place in any of the seven parishes. Ms. Nichols. As I said, sir---- Senator Inhofe. There has to be--if this is somehow going to end up in favorably affecting our environment, somewhere there have to be controls, and I think in the opening statements that were heard on this side of the aisle--one of the things that is a little frustrating is that each group that appears--they say, ``Oh, no, don't worry about it. You're not going to be affected. This is just going to be the other people,'' or whatever is stated is, ``Well, you're not going to be affected. It's someone to the west of you.'' But sooner or later someone is going to have to be affected, and new controls are going to have to go in, and my question to you is you know you can't build support for a program that has no basis in science by continuing to say that no one's going to be affected. It's going to be the guy--somebody else. Somewhere in this case, somewhere there's going to have to be controls to bring the results that it--were described in the seven parishes in Louisiana. Ms. Nichols. Yes, Mr. Chairman, what we are referring to by the OTAG strategy is a system of controls on power plants around the 37 State region, which was modeled as part of the OTAG work. I can't at this moment tell you precisely which power plants in Louisiana, whether they are in those seven parishes or not, are the ones that would need to be participating in a control program. Clearly someone---- Senator Inhofe. But, wait a minute, wait a minute. None of them are in there. None of them would be there in the seven parishes, because that's what the Administrator said. Ms. Nichols. As I said, I would have to check the location of where the power plants are. I think what the Administrator was referring to was the issue of whether there would be a need for additional controls on local businesses above and beyond the OTAG control program. We've assumed the OTAG control program going into effect. We're not denying, in fact we're encouraging people to understand what the implications---- Senator Inhofe. But that's not what she said. She said that the--she said the OTAG would provide cleaner air in all seven parishes without requiring new controls in these seven parishes. That doesn't mean new controls on some businesses or some industries or some farms or---- Ms. Nichols. Yes. Senator Inhofe. So you're saying there would be no controls in these--you're going to have cleaner air without any new controls in the seven parishes. You agree with the Administrator? Ms. Nichols. I agree that beyond OTAG there would not be a need for further, any further, local controls in those seven parishes for the new ozone standard. We're just talking ozone. Senator Inhofe. So OTAG then, that's regional so somebody else is going to have to have new standards so that they'll be able to clean up their air in Louisiana, but it won't be in Louisiana. So where's it going to be? Ms. Nichols. It may be elsewhere in Louisiana. That's why I mentioned the fact that I'm not certain where the power plants that were modeled are located, sir. Senator Inhofe. Senator Hutchinson. Senator Hutchinson. Thank you, Mr. Chairman, and I certainly--I agree with your comments that it seems to be that EPA is giving assurances to all these various sectors that, ``Don't worry. It's not going to be that bad, and that you're not going to be negatively impacted,'' and--would you just kind of reiterate for me, as a Senator from an agricultural State, what those reassurances are? I mean, what do I tell the farmers in the delta? Ms. Nichols. Well, Senator Hutchinson, if I could just step back a second. I think the point we're trying to get across with this implementation strategy is that we want these new health standards to come into effect in a way that's orderly, that doesn't disrupt the work that many communities are already doing, that many industries are already doing, and that provides an ample amount of time, in the case of the fine particles standard, to develop the most cost-effective possible control strategies. With respect to the particulate standard, we are taking advantage of the provisions of the Clean Air Act that allow for a period of time during which areas are designated as unclassifiable, and in which further monitoring can be done, as well as an additional review of the research in order to develop the most cost-effective possible control strategies. With respect to the conversations with agriculture, during the inter-agency review process that we engaged in within the Administration, as well as in response to the public process, the public comments and so forth, we heard a lot about the concerns of agriculture. I, myself, serve as a member of an Air Quality Advisory Committee that the Department of Agriculture has set up under the Farm bill that was passed in the last Congress, and we worked with the Department of Agriculture on a memorandum of agreement--the memorandum itself is in process, but it's reflected in a letter that Carol Browner sent to Secretary Glickman on a couple of specific issues. Because we wanted to make sure that States were focusing on the most cost-effective methods first in order to start thinking about the new fine particle standard. We believe, based on the work that's been done to date, that agricultural practices in general shouldn't be the focus of people's activities when they are thinking about how to meet a new fine particle standard, and that's not based on just a policy choice that we've made. It's based on our science review on the information that we have available about where the particles are coming from, and so we have sought to have conversations both with the department and with groups that represent the agricultural interest in order to explain to them why this is so and why we would like to work with them and others to make sure they are not the focus of attention when it comes to planning for attainment. Senator Hutchinson. OK, that was a lengthy answer. If I could distill that. What I got was that you're having conversations with the Department of Agriculture, that you're working on a memorandum, and that you don't want agriculture to be the focus. Ms. Nichols. It's not just that we don't want them to be the focus, it's that based on the information that we know about fine particles today, we don't believe that they will be the focus because their particular particles are not what we're worried about. Senator Hutchinson. So you don't believe it's going to be the focus. Now what if a State, when they come up with their implementation plan to cite, they're going to make it the focus, and they're going to--really going to come in with some very strong regulations regarding all the things, all the concerns that have been expressed by the farming community. Is there any--when you talk about your conversations with the Department of Agriculture, is there any assurances that the States won't do that? Ms. Nichols. I think there are several kinds of assurances. First of all, there's the time period. No State is going to be submitting a plan for attainment of the new fine particles standard until 2005-2008. During that period of time we will be working with the States in developing both guidance and regulations for the States, to tell the States what they should put into their State implementation plans. One---- Senator Hutchinson. Will you tell them what to put in? Ms. Nichols. We tell the States a number of specific things about what needs to be in an implementation plan. One of the things that we do tell States is what types of monitoring information we're going to require, what types of assurances they need to submit to show that the PM<INF>2.5</INF> standard is going to be achieved. The reason why we don't think that States would be pursuing PM<INF>2.5</INF> strategies, such as the kinds of things you may be alluding to that farmers would fear, is that those practices are not going to be able to--they won't show that those things are actually going to achieve the PM<INF>2.5</INF> standard because they are not aimed at PM<INF>2.5</INF>. Senator Hutchinson. Well, first of all let me just say that I think farmers--that the impact upon agriculture goes far beyond whether or not they're going to be able to go out a plow up their fields, and whether that's going to--that increase--if you go after power plants, you increase energy costs, that dramatically impacts the farming community. But, it was interesting to me, she talked about these implementation plans that you actually dictate to the States, at least some of what they have to put in based upon your own decision as to whether or not it will put them in attainment. And it--my understanding of what the EPA's argument is on why they are not subject to, and required to abide by, the Small Business Regulatory Fairness Act, it is because you're not actually implementing the standards, the States are, and yet you have just told me that when the State plans, you're going to come in and specifically, in some areas, dictate. So that seemed to me that that undercuts your entire legal argument that you're not subject to the Small Business Regulatory Fairness Act. Senator Inhofe. Senator Hutchinson, I might observe that even though he was not on the schedule to be here, we do have Jonathan Cannon, who is the General Counsel. We're glad he is here, and he might want to respond to that. Ms. Nichols. Well, could I just--before I turn to Mr. Cannon for legal advice--just respond to the point that Senator Hutchinson was making about how we work with the States on developing implementation plans, because that is a matter of practice, and if I may say, having run a State environmental agency before I came to this job, it is a dynamic process. But the way it works is EPA sets an air quality standard. That's the goal. The State has to come up with a program to achieve it. EPA has to approve those plans. Our basis for approving or disapproving those plans is whether they demonstrate that a State is able to attain the standard. That's our only role. The State has a choice about which measures it puts into the plan, but we would look at those measures to see whether the measures were going to be getting PM<INF>2.5</INF>---- Senator Hutchinson. Well, Ms. Nichols, I was only taking what you said in your original answer, and that was that you tell the States in certain areas what they've got to put in the plan and that, to me, seems to totally undermine your argument that this is a State decision, and therefore, you are not subject to the Small Business Regulatory---- Ms. Nichols. If I may just finish. There are some elements of what goes into a plan that are mandatory, for example air quality data. We mandate to the State they have to give us the air quality data. If they don't give us the air quality data, their SIP isn't approved. That is a mandatory element of a SIP. However, the choice of the control strategies, if they add up to the amount of reductions that are needed to meet the standards, is the State's. That's all I was trying to---- Senator Hutchinson. What I'm trying to say is that I don't think you can have it both ways, and I guess the courts will ultimately decide that, and I know Mr. Cannon will respond to that, but I think what you have just told me in your answer really undercuts your argument, and the assurances you are giving the agricultural sector flies in the face of your legal arguments that you're not subject to the Small Business---- Ms. Nichols. Mr. Hutchinson, the controls that we're talking about, the reason why I'm focusing on agriculture here, I'll just try put it in a different way. The emissions that agriculture, itself, is causing whether it's their tilling practices, or dust blowing from fields, applications of fertilizers, etc. As we have looked at those emissions, in most instances it's not PM<INF>2.5</INF> that they are emitting. Addressing those practices is not going to be approvable because it isn't going to be solving the problem. That's the only reason I'm suggesting that we have some degree of assurance that those measures won't be in the plan. It's not because we're going to be dictating to the States that they shouldn't use them. Senator Hutchinson. But you did say that there are areas that you do dictate. That there are mandates on the States on what they have to have in the implementation plans, and that if they don't have them you come in and tell them you must have that by law. Ms. Nichols. But those are the procedural, or basic framework, elements of the plan. They are not the choices of the control measures, except to the extent that the Clean Air Act may specifically dictate some measures be included. Mr. Cannon. I'd like---- Senator Inhofe. Would you pull the microphone a little closer so that we could hear you, Mr. Cannon? Mr. Cannon. I think Ms. Nichols has summarized the law accurately. There are within the requirements of the statute applicable to State implementation plans, specific requirements as to the form of those plans and some of the particular requirements. But generally the States have at their discretion to determine the means and measures by which they are to achieve attainment of the standard, and EPA is required to approve the plan once submitted. If the State's plan demonstrates it's going to---- Senator Hutchinson. I wonder if you---- Mr. Cannon. I think Ms. Nichols' point is for agricultural enterprises, to the extent that they are not the source of the problem---- Senator Hutchinson. But what if a State decided they were to write a plan and they came in with some very stringent requirements and regulations on agricultural sector tilling and whatever else, but they had enough other measures that would bring the State into attainment? They weren't solely dependent upon the agricultural changes? In that case they would be in compliance with your requirements, correct? I mean you couldn't say, ``Take that out because it's unnecessary, because that's a focus that's not really essential''? Ms. Nichols. Actually, Senator, in my past experience, this isn't an issue that we faced in the particular way you're describing. But there are many States that have measures on the books which are over and above what's called for by the Clean Air Act, over and above what's mandatory, and EPA does not make those measures federally enforceable. So, in other words, there may be on the books some State regulations that are part of the State program that they choose to do for whatever reasons, but we do not include those---- Senator Hutchinson. So the reassurances to the farming sector are really dependent upon the goodwill and good faith of the States, and the implementation plans that they might design. Ms. Nichols. I think that the reassurance to the States are that EPA is not No. 1 either advising or encouraging States to do things that would not be effective with respect to looking at agriculture and second, that we will give guidance to the States as to what they should be looking at based on our technical knowledge in this area, and that, again, that's not agriculture. Senator Hutchinson. So you--I take it you do that now, that you give guidance to the States and yet we find many States that have standards that exceed the standards of EPA. Some---- Ms. Nichols. Under the framework of the act, any State is always free to set more stringent air standards, and there are a number of States in this country that have air quality standards that are stricter than EPA's standards. What we do try to do is set a floor, the basic level that we believe is what the act told us to do for a national air quality standard. Senator Hutchinson. Well, I know I have taken a long time. It seems to me though, that it's a very tenuous legal position to say we're not subject to SBREA, but--because we're leaving that to the States, and then to say we give them guidance. We tell them the data they've got to have. We give the floor. That's, I think, a very tenuous position. Administrator Browner in her comments last Thursday to the Center for National Policy stated that reducing utility emissions was, in her words, the first small step in addressing the Nation's air quality problems. What percentage of the emissions are you attempting to regulate with these new standards, or what percentage of the emissions will come from power plants, and what other steps does your agency intend to take after reducing utility emissions if those reductions do not achieve the first--the desired results? If she's saying this is the first step, what do you see is going to come from that first step and after the first step, what else has to be done? Ms. Nichols. The reductions in utility emissions of Nitrogen Oxides that we refer to as the OTAG program, or the Cap and Trade program, will reduce the percentage of emissions by different amounts in different States. But overall, it will reduce the contributions that any States are making to the interference with attaining or maintaining the standards in their downwind States. To a sufficient degree that the new areas that won't achieve the ozone standard will be brought into attainment, old areas that have not yet achieved the standard we believe are capable of reaching attainment with what they're already doing to achieve the 1-hour standard that's on the books, plus what they'll get from OTAG, from the utilities strategies, except for a couple of major urban areas which will continue to have serious attainment problems. Based on the modeling that we've done to date, New York, Chicago, Atlanta, Houston, and Los Angeles are the areas that don't come into attainment just as a result of the controls that are already on the books or in the process of being implemented, including all of the national measures that EPA is responsible for, such as cleaner engines for trucks, locomotives, buses, etc. Senator Hutchinson. So what do they do? Ms. Nichols. Those areas will need additional local controls, and at this point the kinds of controls that they would be looking at would be controls on emissions of volatile organic compounds and some additional reductions on Nitrogen Oxides emissions. There are a number of technologies---- Senator Hutchinson. Can you put that in practical terms as to what they might have to do? Ms. Nichols. Sure. We have listed a number of technologies that are coming into play over the next few years. We have not specifically put out emissions estimates for these technologies because we are talking about a period after the year, 2010, and frankly, at this point, we have technologies which have been invented, which have been demonstrated, but which have not been put into production at a level where we can quantify the exact reductions. Senator Hutchinson. The year, 2010, sounds very reassuring, but my understanding is that the modeling that was conducted during the OTAG process showed that even with 85 percent reductions in utility emissions in the Eastern United States there would be numerous areas still that could not achieve attainment under the old ozone standards. So it seems that the 2010 date is not very reassuring when they can't even comply with the existing--with the ozone standards--the old ozone standards. Thank you, Mr. Chairman. Senator Inhofe. Thank you, Senator Hutchinson. Senator Sessions, let me just bring you up to date with a couple of things that we've been covering. I--I was trying to establish from Ms. Nichols, yet admittedly they're not going to be implemented until, in the case of ozone, 6 years; in the case of particulate matter, 9 years; how she can say that it will save lives by doing it today, even though it won't be implemented--and I--she has answered me, but I didn't understand her answer. The other area that we pursued was a statement that was made to Senator Landrieu in the Ag Committee meeting, I think that's where it was, where they said there are seven parishes that would be out of attainment, but that they would be able to come back into attainment without any--requiring new controls, and this gets into the OTAG thing where you can always plainly say well, we are going to control someone to the west of you or something like this. Then, of course, Senator Hutchinson pursued the issue, since he is from an ag State as you and I are, how ag can be for all practical purposes exempt, and so that's where we are right now. Senator Hutchinson. Senator Sessions. Sessions. Senator Inhofe. Sessions, yes. Senator Sessions. Mr. Chairman, it is a--and I am very sorry I was not promptly able to return. It does appear, would you not agree, Ms. Nichols, that there is a focus on the electric power generating industry. They are going to take some additional pressures in this regard? Ms. Nichols. Yes, Senator. We've identified this particular sector as the result of the work we did with the States on OTAG as the one which has the most available reductions in the sense that, in may instances, they have done less to control their emissions than many other sectors, and where there are cost- effective reductions that could be put in place that would make a big difference in achieving the--both the old standards and the new standards. Senator Sessions. But I think there's some concern that they're targeting that industry. It has the ability to pass on its increased costs directly almost to its customers. They're for the most part, until we achieve deregulation, they are State controlled monopolies. As Attorney General, we had a minor role to play with the Public Service Commission in reviewing the rate proposals of the power companies. I've just received word, I think the last week that, or earlier this week, that TVA plans to increase its rates 5 percent, the first increase in 10 years. According to numbers we have from them, they spent, let's see, they'll be spending now $4 billion on, really I guess the acid rain controls and other previous controls, and they're estimating, contrary to what I said earlier, $2 billion or another $3 billion to meet these standards if they go into effect. Have you--and of course those will be paid by rural utilities--Tennessee Valley Authority members in Tennessee and Alabama, Mississippi, Georgia, wherever. Are you sure you're not asking too much of the utility industry, because it will be passed straight to the customers? Ms. Nichols. Senator, you've raised a very good issue about what's going on with the utility industry, and, of course, it does differ State by State. Many States are proceeding with restructuring of their utilities even before there's a Federal mandate to do so. But, in any event, as the industry does restructure and as competition becomes more prevalent in the industry, there's a great opportunity to both reduce the cost of electricity to the consumers and also to deal with the pollution problems that this industry does create at the same time. Clearly there is a cost, as I indicated earlier. The reason why we are in favor of a cap and trade system, which would be implemented across State lines and throughout the region, is that we believe that you can achieve the greatest possible reductions at the lowest cost if you follow the model that was used in the acid rain program, because while any individual utility may face higher costs if they have to install equipment, such as a scrubber, when the entire group of companies in a region is participating in a cap and trade system, then it's possible for the higher cost utility to purchase excess emissions allowances from another utility and, in effect, reap the savings for their customers, and when you are dealing with a regional pollutant, such as nitrogen oxides, we believe that this is a very appropriate way to go about reducing the pollution rather than making any one source responsible for just what's in their area. Senator Sessions. Well, I've got to say that I really can't agree with that in the sense that competition may drive down costs, which we would hope it would, and that would benefit everybody, but if we're going to not benefit from that because of pollution controls that are more severe than necessary, then we have taken money and allocated resources of this Nation in areas that are not a benefit. According to TVA, the proposed standards could lead to increased energy costs in the TVA region of 11 percent, resulting in 40-50,000 fewer jobs, is what I have in a report from them. Have you--does that cause you any concern? Ms. Nichols. I'm always concerned about cost numbers and job figures of that sort, Senator. TVA did actively participate, along with many other utilities, in the OTAG process, and, as you know, the Department of Energy, which has some authority over the TVA, also was very active in the inter- Agency review process on the standards and on the implementation strategy. They have endorsed this cap and trade program while recognizing that there's a need to fine tune both the allotments and the methodology as we move forward with the program. So, it may be that there may be some differences in terms of the amounts that different States would have to contribute based on their location and their impact on other States. But in terms of the general principle that there is a need to cap and to allow for cross-border trading, I believe that there is general support of that as a method. The issue that you raise, of course, is, it needed to clear up the air, and I think that on that front we have pretty good evidence, based on a ranking of other types of control measures, that the utility NO<INF>X</INF> emissions are at this point the single largest factor in terms of creating the cross- border ozone transport problems. Senator Sessions. Well, the concern is that to me--I'll just tell you what my concern is. I think that's a way that hides the cost. If you said that people had to change their automobiles directly, and they're no longer going to have diesel engines, they're no longer--this innate--they feel that. But if you take--whack the utilities and they pass it along in increased rates, nobody really knows what's happened, and I know I may be talking about a subject people don't want to talk about anymore, but there are two nuclear reactors in the TVA system sitting idle today, one of them 80 percent complete, that would have polluted--provided no air pollution, and EPA regulations or the international energy--nuclear energy regulations have really stopped that, and that's been a real burden on the whole power industry in the Tennessee valley. So, I wanted to raise that point. Did you discuss the fact that in the implementation standards that you've issued, or made public, are the vast majority of areas that do not currently meet the new ozone standards will be able to do so without any addition new pollution controls and measures? Is that the position--that's your position on that? Ms. Nichols. Yes, Senator Inhofe, I think---- Senator Sessions. You discussed that, you think, thoroughly? Ms. Nichols. Well, I'll be happy to go further if you---- Senator Sessions. I don't want to---- Senator Inhofe. Further, maybe he'll---- Senator Sessions. I'd just like to know how you can reduce them without any burden on anyone. Ms. Nichols. Well, Senator, I think maybe there is a missing word of ``local'' in that sentence, and, if so, we should clarify the point. I think the point there is that with the OTAG controls, with the utility cap and trade system in place, we believe there is not a reason or a necessity for additional local control measure in the areas that meet today's ozone standard, but will not meet the 8-hour new standard. In other words, those areas which today are essentially marginal, they are close to the old standards, they don't quite make the new standards. Because of the regional benefits of the capping of the utility emissions, those areas will be able to come into attainment with that plus the additional cleaner cars, cleaner fuels, and other measures that are already being provided by the Federal Government, in effect, that are already part of today's Clean Air Act. So the point is that there would not be a need for local controls on businesses in those areas. Senator Sessions. So then you are going to take it out of the utility industry? Ms. Nichols. Sir, I hate to sound like a defender of the auto industry, and they probably wouldn't want me to do it. But I would say that if you look at the amount that they have controlled and the amount that has been already passed on to consumers, in order to clean up those tailpipe emissions, we are talking, in the case of cars, about reductions of 90 percent twice over, and at cost levels that well exceed the $1500 per ton that we believe is what it's going to cost for these NO<INF>X</INF> controls. Admittedly, the consumer is the one who ultimately sees these costs. There's no question about that. But we believe that those costs are quite modest in comparison with the costs that have already been borne by other industries. Senator Sessions. What about the particulate matter, the PM count, how much are you expecting out of utilities on that, and can--will they be able to meet the burden in utilities alone? Ms. Nichols. Clearly at this point, Senator, we are not in a position to spell out the entire control program for PM<INF>2.5</INF>. We do know that the acid rain program that is in effect today for controlling sulfur emissions from utilities will achieve about 40 percent of the reductions that we think are needed for PM<INF>2.5</INF>. So, in other words, this industry has already made, or is in the process of making a very significant down payment on controls of PM<INF>2.5</INF>. The NO<INF>X</INF> reductions that we are hoping to get from the OTAG program will also help with PM<INF>2.5</INF>. One of the benefits of doing both the ozone and the PM standards at the same time is that we can, in effect, take credit for measures that really will work for both, because the Nitrogen Oxide emissions, in addition to forming ozone, also are causing formation of nitrates which are one of the large ingredients of the fine particle problem. So, I think at this point it is fair to say that these controls we are looking at under OTAG will get us to where we need to go, at least for the next decade or so. After that I can't say. Senator Sessions. You are not prepared to say what other industries that you'd be--that would be expected to bear burdens to get the PM standards in attainment? Ms. Nichols. Well, sir, I think in general what we know about PM<INF>2.5</INF> today is that it's primarily a product of combustion of fuels. So it's undoubtedly looking at all sorts of combustion sources and looking at the quality of the fuels. But we really do want to do further research before we pinpoint which specific types of control measures would be the most beneficial. Senator Sessions. Let me ask you this, Ms. Nichols, let's say that we're not supposed to worry about this because it's going to be 6 years before it takes effect. Why don't we wait about 3 years, and do a lot of research in the interim, and maybe we could identify particular types of emissions that are more particularly health adverse, and utilize those resources. Again we are spending American citizens resources in the most effective way. Would you respond to that thought? Ms. Nichols. Senator, I think, maybe I would just go back to the structure of the Clean Air Act, which is unique among Federal environmental statues, at least to my knowledge, in that it sets ambitious goals, clearly says set the goal without regard to the cost, just based upon your public health information, the best science that you have, and then take your time and work out the attainment strategies. Over time, we think this approach has worked in the sense that we've seen time and time again that when you set a goal, even if it's an ambitious goal and at the time industry didn't know how they would attain, if you give them the time and the flexibility to get there, that they will come up with innovative controls. We think the market-based approach that Congress wrote into the 1990 amendments and urged us to use is a further way to make it clear that we shouldn't just be using prescriptive regulations to get there. But ultimately, without a goal, people don't know where they are trying to head, and they don't make the kind of investments in research that are really necessary. I'm not just talking about health research or monitoring research. I'm really talking about the kinds of things that can only be done by the private sector when they look at what kinds of technologies and processes they can come up with. So having the standard out there, as we have done, gives them that target. We hear from industry frequently if we give them the time to do it, that they can meet standards. What they don't want is to be told precisely how to do it. Senator Sessions. Well, I agree that the American and much of the world's business community is incredibly efficient and if they have to do something, they will. But we need to be sure as public policy that what we ask them to do is the best thing for them to do. If it's going to cost $30 billion to meet an ozone standard that maybe is not necessary to meet, we could-- if TVA had $3 billion, goodness knows what we could do for the Tennessee River. We could buy huge tracts of land, preserve it for species and environmental concerns that could be there for the rest of our lives. So I think we've got to think in terms of that. I just don't believe that the science is so clear that you can reach that level that the act triggers in that you've got to act today. I don't believe that you have to act today under the act. One more question and I'll finish. What is the EPA's latest evaluation of the cost of meeting both the PM and ozone standards? Ms. Nichols. I just want to turn to the summary of the RIA here. For the particulate matter and ozone standards combined-- -- Senator Sessions. If you could break them up that would be helpful? Ms. Nichols. I'll do both for you. For the combined standards, the partial attainment costs are $9.7 billion, and of that the particulate matter cost is $8.6 billion and the ozone cost is $1.1 billion. Senator Sessions. Is that annually? Ms. Nichols. These are--yes, these are annual numbers. Senator Sessions. Well, I think there'll be much disagreement about that. Are you aware of the Scientific American article of January or December, earlier this year in which it discussed the fact that decline in particulate matter contributes to acid rain? Ms. Nichols. No, sir, I'm not. Senator Sessions. A lot of the particulate matter are base that neutralize acid, and really it was a very interesting article. So I just point that out to say that if we knew more about what type of items were causing the environmental damage, the--we could expend our resources better. Mr. Chairman, I congratulate you on the work that you've done. The Alabama Department of Environmental Management has testified at your hearing in Oklahoma that our State would go from two counties, I think, out of attainment to at least 20, and perhaps 67. This would be a major detriment to the economic growth of Alabama. There've been a lot of studies done that state that poverty is an adverse health factor--perhaps one of the clearest--poorer people are less healthy. If increased attainment targets keep us from being competitive in the world market, a plant may not be built in Alabama. It may be built in Mexico or Brazil. The County Commissioners in Jefferson and Shelby Counties are working to improve the air and they're making progress. They're going to be awfully depressed if they are faced with new standards that they cannot possibly meet. They are making progress at great effort, and they expressed their concerns to me. There's a county just outside of Birmingham--a rural county that oddly has one of the testing machines--it appears it will be out of attainment if you increase the standard, and it has almost no industry. So we don't want to hurt the working Alabamians and the working Americans. I think we've don't want to have a fuss over this issue. I certainly don't. But I think we're going to have one because I'm not going to participate in a procedure that has marginal, if any, health benefits, but significantly adverse economic benefits the people of my State. Ms. Nichols. Mr. Sessions. Senator Sessions. Yes. Ms. Nichols. If I could just comment on one point that you made. First of all, I agree with you. You think you need to be satisfied that we've carried out our responsibilities properly and we do welcome your oversight. I did want to say something about the counties that you mentioned though, because I think that there's quite a bit of misapprehension or misinformation. Perhaps it was based on some of the ranges that were in the proposal which came out last November. We do have data and we have to be cautionary because it is current data. It doesn't reflect new monitoring that will be done. But the information that I have indicates that there are four counties in Alabama that don't meet today's .08 8-hour standard with the fourth maximum concentration. That would be Clay, Jefferson, Madison, and Shelby counties based on what we know today. That there are two, and this is only based on, again, current data, not with all the new monitoring in place, that would be Etowa and Mobile, that wouldn't meet the PM<INF>2.5</INF>. Now obviously we have more work to do, and we realize that we've got to come up with measures that people will feel can be met. But we do want to assure you of our desire to work with you on that and to work with your State to come up with a program that will succeed. Senator Sessions. Well, the problem is that we don't have the monitors. There is a monitor, I think, in Clay County, which is a rural county, and it's put it out of attainment. The other counties don't have monitors, and we upped the standards and put out more monitors. Someone has been there for 30 years, a champion of clean air for the State and Nation, and he says this is going to be impossible to meet. He predicts that over 20 counties will be out of attainment. So I don't know where it would actually come out. Ms. Nichols. Well, we need to put the monitors out there. Our plan for the monitoring is that we will be putting out about 1500 across the entire country for the basic Federal monitoring network. We've sought the funding for the Federal Government to pay so we don't put that burden on the States, and our belief is that with 1500 monitors we'll be concentrating on the major populations centers. From the point of view of cost-effectiveness, of controls, and of actually meeting the health goals, it doesn't make sense to be sticking the monitors in the middle of rural areas, at least to begin with. We need to be trying to measure what the impacts are on the population centers first. Senator Sessions. Well, that's an odd approach, I mean, it seems the rules should be kept even wider. So those are my concerns, Mr. Chairman. I do recall in this room some weeks ago we had the physician from Pennsylvania, emergency room physician, and he was most articulate, and he documented how a few million dollars, this kind of money that we are expending on this, how many lives it would actually save in the emergency rooms, such as proposals to get people there quicker and better equipment all over American rural and small towns. He said you could actually save tremendous numbers of lives. He was very passionate about that, and he thought that it was unwise for us to deal with a situation that was very ephemeral and uncertain, and ignore an area that was certain. So I think that's where we are coming from. Ms. Nichols. No, I hear you. I mean, I think it's a very valid point. I guess the only thing that I would say in response, and I realize this is sort of back to the Clean Air Act again, but I think the concept behind the law is that this is something, that is the air, that every single American experiences. The costs may be more focused, but the effects are felt by everybody to some degree or another. So, perhaps, in a way you could say that it's, you know, the lungs of the people that are the one's that are really paying the cost of the existing levels of pollution, and we need to do a better job of measuring it. There's no question about that. To quantify it, to try to put a monetary value on things that can be monetized. But when you get down to it, it is to some degree an issue about values, about, you know, what the public wants. Senator Sessions. Well, I think we want improved health for America, and I have no doubt that the people expect us to spend their resources in the most efficient way to improve their health. That's what we're struggling with. Thank you, Mr. Chairman. Senator Inhofe. Ms. Nichols, I want to be sure that we don't leave that figure of $9.7 billion unchallenged in this meeting, because I have not seen anyone who has done an analysis of what they would anticipate the cost to the American people that's anywhere near that low of a figure. The Reasoner Foundation out in California came out with a range from $90 billion to $150 billion a year. Now that--this is big. It means an average family in Alabama of four would have to pay about $1,600 a year. I mean, this is big. I also have to observe that, it kind of reminds me of something I heard a long time ago when I first got into politics. When you talk about tax increases they say, ``Don't tax me. Don't tax thee. Tax that guy behind the tree.'' That's exactly what you guys are doing. You're saying well, this isn't going to affect the U.S. Conference of Mayors and the cities and communities. This isn't going to affect the farm, the ag community. This isn't going to affect small business, just those big, tall smokestacks out there. It just isn't true. You have to know it isn't true. Now let me ask you as far as the statement that was made during the meeting out in California, to the U.S. Conference of Mayors--``don't worry, you're not going to be affected by this.'' Do you agree with that? Ms. Nichols. I'm not sure what statement---- Senator Inhofe. Well, let me ask you the question. Do you think that these communities are going to be adversely affected in terms of us saying what they have to do, or telling the States to tell them what they have do to, and that is an unfunded mandate? Do you feel it's not an unfunded mandate? Ms. Nichols. I am convinced that setting air quality standards is not an unfunded mandate. If the question is, is there a validity to the statement that controls on power plants are the strategy we will be pursuing, it seems to me that you have the best assurance that you can get in the form of the directive that the President sent to the Administrator, the implementation strategy that was published in the Federal Register, and the reality that from a cost-effectiveness standpoint it is the place that we should go. I think you would want us to turn to the most cost-effective strategies first, in order to attain---- Senator Inhofe. Well, politically speaking, it's more convenient to go after the big, bad guys, and that's what they always do. We're experiencing that over there with a lot of issues. But, you know, I'm trying not to use disrespectful language, but I think the most moderate I can be to characterize what you guys have been doing to the American people, I think you have been blatantly dishonest with the American people. To try to make people believe that they don't have to have any new inconveniences out there in terms of when they harvest their crop, when they run their diesel engines, and all these things and say it's just going to be found in a few smokestacks. It's just not honest. Ms. Nichols. Well, Senator. You alluded earlier to the fact that I was planning to return to California and back to the private sector again, and so perhaps I could be indulged just for a moment in reminding people that being from the place in the country that has the worst air pollution in the Nation, and that has done the most and achieved the most to achieve those standards, perhaps I have a certain amount of confidence that it is possible to make huge progress and at the same time have a very successful economy as well. I just have to say to you that I don't know how we could be more forthright in terms of our commitment to pursuing the most cost-effective strategies first when it comes to these new standards. We realize that we are setting an ambitious target. That's why we have tried to provide the time, and the road map, if you will, as to how we would hope to get there. We realize there is time involved and we want to work with you to make sure---- Senator Inhofe. Ms. Nichols, we are rapidly running out of time. We only have 7 more minutes, and I--there were some things I wanted to get to and briefly I'm just going to touch on this. An Oklahoma company, it was Citgo out there, are you familiar with the work that they have done in placing the PM<INF>2.5</INF> monitors in different locations in Texas, Oklahoma, and Louisiana in order to see what the results would be, and they found the following areas in violation of the new standards: a parking garage, a festival grounds, a tall grass prairie, outside a house, a beach, and the highest level was inside a building in the Tulsa Zoo. Does this surprise you? Ms. Nichols. Yes it does, especially considering that the standard is an annual average standard, I'd find that somewhat surprising. I'd be happy to take a look at the report and---- Senator Inhofe. Well, I think it would probably be a good idea because you know it's not always government that is out there trying to analyze the effects. Senator Inhofe. When you're looking at something as huge as this, it's important that we rely on, not our absence of knowledge, but knowledge that might be there. It might be produced by someone besides government. I have such a hard time accepting the fact that we are giving serious consideration to setting standards, not implementing them, telling the American people that this is going to save lives. I've kind of tracked the early deaths, the premature deaths that this Administration and that the EPA have cited, starting out with some 40,000 and edging down. The same as I have watched the costs that you have said and anticipated would be out there, and yet in the private sector we find the cost would be so much greater. I'm disturbed because--yes, I'm from an agricultural State, we have other industries, too, but I don't have any doubt in my mind after looking at this that this is going to be a huge thing. I mean, how can you say that it's not going to affect small business if their electric rates go up somewhere between 8 and 11 percent? It does have an effect. I was going to pursue a couple of things that came out in the Agriculture Committee, but it doesn't look like we're going to have time to do that. Let me just mention this one thing, though. I have a copy of a letter that was sent to Congressman Kucinich. I don't know Congressman Kucinich. I may not be pronouncing his name right. It was dated May 16, 1997, explaining to him that two facilities in his district would not be impacted by these standards. In that letter, and was this from the Administrator Browner? It's from Ms. Nichols. It's from you. ``These counties likely would not have met the proposed new ozone or PM standards had these standards been in place during 1993-95. The most recent 3-year period for which we have complete data. However, based on current data, it is likely that nothing other than continued implementation of the 1990 Clean Air Act, plus the application of a regional control strategy''--I guess you are talking about OTAG there--``in the Eastern United States which will focus on power plants, large industry sources, and new autos will be necessary in order to meet the new ozone standards.'' And you end by saying, ``It is not likely that either county''--two counties, this is in Ohio, I believe; is it Ohio?--``would require additional local controls in order to meet the new ozone standards.'' So here we are in Ohio, and they are pointed at as the one who is creating the problem for other States, and you're saying in these two areas that these two industries are not going to have to make any changes. They are not going to be involved in this. Ms. Nichols. Again, Senator Inhofe, the letter refers to the OTAG modeling work as the basis for that assessment about what those counties would be doing, or what would be expected about their air, and the reason for that is that what the modeling shows is that the benefit of the NO<INF>X</INF> controls are greater, the closer to the source that you are. So, since Ohio does have a number of the large, NO<INF>X</INF> generating utilities that we're referring to, they will actually be getting the greatest benefit in terms of being able to reach the ozone standard in the counties in Ohio, and that was the point of the letter. Senator Inhofe. So here's two counties in Ohio that have both an automobile manufacturing plant and an auto casting plant, and you say that they're not going to have any additional controls in those areas? Ms. Nichols. These are counties, I believe, I am not certain I am reflecting this, but my recollection is that they are counties that have been in nonattainment in the past and have already implemented a number of new source review and other kinds of requirements that are in place. We're not saying those controls would go away. What we are saying is that the benefits of the control strategy for the utilities are such that we believe that that would alone bring them into attainment under the new standard as well. I think the chemistry of this pollutant is perhaps a little counter-intuitive and one of the things that we've learned over the many years that we've been controlling ozone is that this issue about how NO<INF>X</INF> affects air quality over long distances is one that has become clearer over a period of time. But it does appear to be quite well agreed to now by all the scientists---- Senator Inhofe. Ms. Nichols, we're out of time here. I would only observe that I believe the American people are smarter, and are not going to buy into the idea that each individual is going to be exempt. It's just going to be that guy behind the tree, and I haven't heard anything else that has come from this meeting that has convinced me otherwise. We are out of time. I appreciate very much your being here and I wish you the best of luck in your career as it goes west. Ms. Nichols. Thank you. Senator Inhofe. Thank you. [Whereupon, at 11:54 a.m., the subcommittee was adjourned, to reconvene at the call of the chair.] Statement of Hon. Joseph I. Lieberman, U.S. Senator from the State of Connecticut Thank you Mr. Chairman for holding this important hearing on implementation issues. This is a critical area and requires careful attention from Congress. I have been very supportive of setting standards on a health-basis using the most recent scientific evidence. EPA has weighed a large amount of data and developed the revised standards to protect public health. I have continued to express concern about ensuring that the standards are implemented in a sensible, equitable and cost-effective manner, with full consideration of costs, and adequate time for attaining the standards. The President has committed that these standards will be implemented in a way that does not cause economic dislocations, and it is critical that regulatory agencies pay close attention to the process. The burden must be equitable. Downwind states must not bear unfair costs because pollution sources in upwind states have not been controlled adequately. First, and most importantly, it is critical that EPA implement on an expedited basis the strategy for controlling emissions of pollutants from areas upwind of the Northeast. Downwind states are in a grossly inequitable position. Without prompt and strong followup on this commitment, EPA's promise of cleaner air in a cost-effective, equitable and effective manner will not be fulfilled. EPA's attention to the transport problem must not stop there. Its policies under both the old and new standard must recognize the transport phenomenon and ensure that areas are not unfairly penalized for being downwind of communities with massive air quality problems. Second, I'm concerned that EPA's plan raises some equity issues between current and new nonattainment areas. These need to be addressed promptly. We also need to ensure that EPA has not unduly loosened requirements in areas that contribute to downwind pollution. Third, we need to pay close attention to ensure that the timeframe for implementation is adequate. Fourth, we need to examine how EPA has applied some of the requirements of the old standard in the context of the new standard and whether that approach makes sense. These are just some of the issues that need to be addressed during the implementation process. There is considerable dispute about costs of implementation which ultimately will be determined during the implementation process. Concern about costs underscores the need for paying close attention to implementation. ______ Statement of Hon. Max Baucus, U.S. Senator from the State of Montana Senator Inhofe, I'd like to start by thanking you for convening this hearing. And I'd also like to thank Assistant Administrator Mary Nichols for her testimony today. Since EPA released its proposal for new ozone and PM<INF>2.5</INF> standards, we have heard from just about everyone interested in this issue. Scientists, industry, farmers and ranchers, environmentalists, health professionals and State and local governments. And EPA has also received over 50,000 comments both pro and con. Those comments have shown that while clean air is neither easy nor inexpensive, the importance of protecting public health cannot be shown on a balance sheet. The fact remains that air pollution has costly impacts on our workforce, health care system, environment, and our quality of life. Exposure to ozone makes breathing difficult for the young and the old. Furthermore, particulate emissions are causing people to die prematurely. And, although we don't have all the answers, we need to take action now to improve the quality of our nation's air. But despite the great importance of this issue or maybe because of it we have had difficulty talking calmly and thoughtfully about how to get the clean air our citizens want in a way that makes sense for our local economies. For instance, this Spring there was great hysteria among folks who were told that the EPA was preparing to snuff out their barbecues. This summer farmers in my State of Montana were told that the EPA was going to force them to change the way they do their jobs. But Administrator Browner has assured us on the record that neither of these things are true. In addition, the Administrator responded to our concerns about implementing these new standards. EPA's strategy will give areas more time to meet the new standards. It creates a program to deal with the ozone transport problem helping many downwind areas meet the new standard without having to adopt any new controls. And it sets up a monitoring system that will help scientists answer some of the questions about fine particles that have generated so much debate. EPA predicts that by achieving the new PM<INF>2.5</INF> standard, premature deaths will be reduced by 38 percent each year. That is an impressive statistic. But no lives will be saved if states can't meet the new standards. It's time to put the last several months behind us and get on with the job at hand. Namely, helping EPA and the states identify the most sensible, cost-effective ways to implement these new standards. So, Mr. Chairman, I look forward to Ms. Nichols' testimony and today's discussion about how we will proceed in implementing these new standards. I believe that EPA is headed in the right direction. It is this Committee's responsibility to ensure that happens, and I look forward to working with the Administration to be sure it does. We must implement these standards in a way that makes sense for our economy and provides cleaner air for all Americans. Thank you Mr. Chairman. ______ Prepared Statement of Mary D. Nichols, Assistant Administrator for Air and Radiation, Environmental Protection Agency Mr. Chairman, Members of the Subcommittee, thank you for inviting me to discuss implementation plans for the Environmental Protection Agency's (EPA's) revisions to the national ambient air quality standards for ground-level ozone and particulate matter. As you know, the Clean Air Act directs EPA to set national standards for certain air pollutants to protect public health and the environment. For each of these pollutants, Congress directed EPA to set what are known as ``primary'' standards to protect public health without consideration of cost and ``secondary'' standards to protect public welfare, including the environment, crops, vegetation, and so forth for which costs may be considered. Under the Act, Congress directs EPA to review these standards every 5 years to determine whether the latest scientific research indicates a need to revise them. Last week, EPA set new standards for ozone and particulate matter that will be a major step forward in public health and welfare protection. Each year, these updated standards have the potential to prevent as many as 15,000 premature deaths; as many as 350,000 cases of aggravated asthma; and as many as one million cases of significantly decreased lung function in children. Numerous other public health and welfare benefits will result from implementation of the new standards. Additional public health benefits would include: reduced respiratory illnesses, reduced acute health effects, reduced cancer from air toxics reductions, and the avoidance of various other air pollution-related illnesses and health effects. Public welfare benefits will include: reduced adverse effects on vegetation, forests, and natural ecosystems, improved visibility, and protection of sensitive waterways and estuaries from deposition of airborne nitrogen that can cause algal blooms, fish kills, and loss of aquatic vegetation. Estimated total monetized health and public welfare benefits associated with the new standards are enormous, ranging in the tens of billions of dollars annually. Many additional potentially large benefit categories, such as reduced chronic respiratory damage, infant mortality, and other health and welfare benefit categories, cannot be monetized. The new ozone and particulate matter standards are based on an extensive scientific and public review process. Congress directs EPA to consult with an independent scientific advisory board, the Clean Air Scientific Advisory Committee (CASAC). In conducting these reviews, EPA analyzed thousands of peer-reviewed scientific studies that had been published in well-respected scientific journals. These studies were then synthesized, along with a recommendation on whether the existing standards were adequately protective, and presented to CASAC. After 3\1/2\ years of work, 11 CASAC meetings totaling more than 125 hours of public discussion, and based on 250 of the most relevant studies, the CASAC panel concluded that EPA's air quality standards for ozone and particulate matter should be revised. CASAC sup- ported changing the ozone standards from a 1-hour averaging period to an 8-hour average to reflect increasing concern over prolonged exposure to ozone, particularly in children. CASAC also supported adding a fine particle standard. Fine particles are inhaled more deeply into the lungs. EPA then proposed updated standards and conducted an extensive public comment process, receiving approximately 57,000 comments at public hearings across the country and through written, telephone and E-mail message communications. As a result of this extensive process, the final standard for ozone will be updated from 0.12 parts per million (ppm) of ozone measured over 1 hour to a standard of 0.08 ppm measured over 8 hours, with the 3-year average of the annual fourth highest concentrations determining whether an area is out of compliance. The new standard also reduces ``flip-flopping'' in and out of attainment by changing it from an ``expected exceedance'' to a ``concentration-based'' form. For particulate matter, EPA is adding new standards for particles smaller than 2.5 micrometers in diameter (known as PM<INF>2.5</INF> or fine particles). The fine particle standard will have two components: an annual standard, set at 15 micrograms per cubic meter and a 24-hour standard, set at 65 micrograms per cubic meter. EPA has also changed the form of the current 24-hour PM<INF>10</INF> standard; this will provide some additional stability and flexibility to states in meeting that standard. We believe it is critical to move forward with these standards now. The American public deserves to know whether its air is healthy or not. The standards we have set serve as an essential benchmark for people to use in understanding whether the air they are breathing is safe. In addition, the standards will encourage early action to help reduce adverse health effects as soon as possible. By setting the standards now, states will be able to proceed with the monitoring and planning requirements needed for implementing them over the next several years. For PM<INF>2.5</INF>, areas can begin to develop inventories and characterize the nature of their PM<INF>2.5</INF> problem. As I will now discuss, we have developed an implementation strategy through an extensive interagency consultative process to assure that concerns of State and local governments and affected industries, such as transportation and agriculture, are addressed. This strategy will allow states and local areas the time they need to implement these standards in a cost-effective and reasonable way. implementation of the revised air standards In the interagency process leading up to the issuance of these standards, EPA worked with other Federal agencies to develop an implementation strategy for implementing the standards. In a memorandum signed July 16, 1997, President Clinton set forth several general principles for implementing the standards, and directed EPA to follow the interagency implementation strategy. I would like to summarize the principal features of that strategy for you today. Achieving the air quality benefits of the updated standards requires a flexible, common sense, cost-effective means for communities and businesses to meet the standards. The President's implementation package has four basic features, all of which can be carried out under existing legal authority: 1. Implementation of the air quality standards is to be carried out to maximize common sense, flexibility, and cost effectiveness; 2. Implementation shall ensure that the Nation continues its progress toward cleaner air by respecting the agreements already made by States, communities, and businesses to clean up the air, and by avoiding additional burdens with respect to the beneficial measures already underway in many areas. Implementation also shall be structured to reward State and local governments that take early action to provide clean air to their residents; and to respond to the fact that pollution travels hundreds of miles and crosses many State lines; 3. Implementation shall ensure that the Environmental Protection Agency (`Agency') completes its next periodic review of particulate matter, including review by the Clean Air Scientific Advisory Committee, within 5 years of issuance of the new standards, as contemplated by the Clean Air Act. Thus, by July 2002, the Agency will have determined, based on data available from its review, whether to revise or maintain the standards. This determination will have been made before any areas have been designated as `nonattainment' under the PM<INF>2.5</INF> standards and before imposition of any new controls related to the PM<INF>2.5</INF> standards; and 4. Implementation is to be accomplished with the minimum amount of paperwork and shall seek to reduce current paperwork requirements wherever possible.'' strategy for meeting the revised ozone standard Ozone is a pollutant that travels great distances and it is increasingly important to address it as a regional problem. For the past 2 years, EPA has been working with the 37 most eastern states through the Ozone Transport Assessment Group (OTAG) in the belief that reducing interstate pollution will help all areas in the OTAG region attain the NAAQS. A regional approach can reduce compliance costs and allow areas to avoid most traditional nonattainment planning requirements. The OTAG was an effort sponsored by the Environmental Council of States, with the objective of assessing ozone transport and recommending strategies for mitigating interstate pollution. The OTAG completed its work in June 1997 and forwarded recommendations to EPA. Based on these recommendations, in September 1997, EPA will propose a rule requiring states in the OTAG region that are significantly contributing to nonattainment, or interfering with maintenance of attainment, in downwind states to submit State implementation plans (SIPs) to reduce their interstate pollution. EPA will issue the final rule by September 1998. If the states choose to establish a voluntary regional emission cap and trade system, similar to the current acid rain program, reductions can be at a lower cost. EPA will encourage and assist the states to develop and implement a NO<INF>X</INF> cap and trade program. Most important, based on EPA's review of the latest modeling, a regional approach, coupled with the implementation of other already existing State and Federal Clean Air Act requirements, will allow the vast majority of areas that currently meet the 1-hour standard but would not otherwise meet the new 8-hour standard to achieve healthful air quality without additional local controls. Areas in the OTAG region that would still exceed the new standard after the regional strategy, including areas that do not meet the current 1-hour standard, will benefit as well, because the regional NO<INF>X</INF> program will reduce the extent of additional local measures needed to achieve the 8-hour standard. In many cases these regional reductions may be adequate to meet CAA progress requirements for a number of years, allowing areas to defer additional local controls. phase-out of 1-hour ozone standards EPA's revised ozone standard will replace the current 1-hour standard with an 8-hour standard. However, the 1-hour standard will continue to apply to areas not attaining it for an interim period to ensure an effective transition to the new 8-hour standard. As you know, the Clean Air Act includes provisions (Subpart 2 of part D of Title I) that address requirements for different nonattainment areas that do not meet the 1-hour standard (i.e., those classified as marginal, moderate, serious, severe and extreme). These requirements include such items as mandatory control measures, annual rate of progress requirements for emission reductions and emission offset requirements. All of these requirements have contributed significantly to the improvements in air quality since 1990. Although EPA initially proposed an interpretation of the Clean Air Act that would have been more flexible in how these provisions applied to existing ozone nonattainment areas after promulgation of a new ozone standard, based on comments received, EPA has reconsidered its interpretation and EPA has concluded that these provisions should continue to apply as a matter of law for the purpose of achieving attainment of the 1-hour standard. Once an area attains the 1-hour standard, those provisions and the 1-hour standard will no longer apply to that area. An area's implementation of the new 8-hour standard would then be governed only by the provisions of Subpart 1 of Part D of Title I. The purpose of retaining the current standard is to ensure a smooth legal and practical transition to the new standard. It is important not to disrupt the controls that are currently in place as well as those that are underway to meet the current ozone standard. These controls will continue to be important to reach the new 8-hour standard. general time line for meeting the ozone standard Following promulgation of a revised NAAQS, the Clean Air Act provides up to 3 years for State Governors to recommend and EPA to designate areas according to their most recent air quality. In addition, states will have up to 3 years from designation to develop and submit SIPs to provide for attainment of the new standard. Under this approach, areas would be designated as nonattainment for the 8- hour standard by 2000 and would submit their nonattainment SIP by 2003. The Act allows up to 10 years plus two 1-year extensions from the date of designation for areas to attain the revised NAAQS. transitional classification For areas that attain the 1-hour standard but not the new 8-hour standard, EPA will follow a flexible implementation approach that encourages cleaner air sooner, responds to the fact that ozone is a regional as well as local problem, and eliminates unnecessary planning and regulatory burdens for State and local governments. A primary element of the plan will be the establishment under Section 172(a)(1) of the CAA of a special ``transitional'' classification for areas that participate in a regional strategy and/or that opt to submit early plans addressing the new 8-hour standard. Because many areas will need little or no additional new local emission reductions to reach attainment, beyond those reductions that will be achieved through the regional control strategy, and will come into attainment earlier than otherwise required, EPA will exercise its discretion under the law to eliminate unnecessary local planning requirements for such areas. EPA will revise its rules for new source review (NSR) and conformity so that states will be able to comply with only minor revisions to their existing programs in areas classified as transitional. During this rulemaking, EPA will also reexamine the NSR requirements applicable to existing nonattainment areas, in order to deal with issues of fairness among existing and new nonattainment areas. The transitional classification would be available for any area attaining the 1-hour standard but not attaining the 8-hour standard as of the time EPA promulgates designations for the 8-hour standard. In terms of process, areas would follow the approaches described below based on their status. (1) Areas attaining the 1-hour standard, but not attaining the 8- hour standard, that would attain the 8-hour standard through the implementation of the regional NO<INF>X</INF> transport strategy for the East. Based on the OTAG analyses, areas in the OTAG region that would reach attainment through implementation of the regional transport strategy would not be required to adopt and implement additional local measures. When EPA designates these areas under section 107(d), it will place them in the new transitional classification if they would attain the standard through implementation of the regional transport strategy and are in a State that by 2000 submits an implementation plan that includes control measures to achieve the emission reductions required by EPA's rule for states in the OTAG region. This is 3 years earlier than an attainment SIP would otherwise be required. We anticipate that we will be able to determine whether such areas will attain the revised ozone standard based on the OTAG and other regional modeling and that no additional local modeling would be required. (2) Areas attaining the 1-hour standard but not attaining the 8- hour standard for which a regional transport strategy is not sufficient for attainment of the 8-hour standard. To encourage early planning and attainment for the 8-hour standard, EPA will make the transitional classification available to areas not attaining the 8-hour standard that will need additional local measures beyond the regional transport strategy, as well as to areas that are not affected by the regional transport strategy, provided they meet certain criteria. To receive the transitional classification, these areas must submit an attainment SIP prior to the designation and classification process in 2000. The SIP must demonstrate attainment of the 8-hour standard and provide for the implementation of the necessary emissions reductions on the same time schedule as the regional transport reductions. (3) Areas not attaining the 1-hour standard and not attaining the 8-hour standard. The majority of areas not attaining the 1-hour standard have made substantial progress in evaluating their air quality problems and developing plans to reduce emissions of ozone-causing pollutants. These areas would be eligible for the transitional classification provided that they attain the 1-hour standard by the year 2000 and comply with EPA's regional transport rule, as applicable. areas not eligible for the transitional classification Existing nonattainment areas which cannot attain the 1-hour standards by 2000 will not be eligible for the transitional classification. However, their work on planning and control programs to meet the 1-hour standard by their current attainment date will take them a long way toward meeting the 8-hour standard. While areas will need to submit an implementation plan for achieving the 8-hour standard within 3 years of designation as nonattainment for the new standard, such a plan can rely in large part on measures needed to attain the 1- hour standard. For virtually all of these areas, no additional local control measures beyond those needed to meet the requirements of Subpart 2 and needed in response to the regional transport strategy would be required to be implemented prior to their applicable attainment date for the 1-hour standard. This approach allows them to make continued progress toward attaining the 8-hour standard throughout the entire period without requiring new additional local controls for attaining the 8-hour standard until the 1-hour standard is attained. implementing the new particulate matter standards Implementing the new particulate matter standards will require a different path from the one I just discussed for ozone. As required under the Act, within the next 5 years EPA will complete the next periodic review of the particulate matter criteria and standards, including review by the CASAC. As with all NAAQS reviews, the purpose is to update the pertinent scientific and technical information and to determine whether it is appropriate to revise the standards in order to protect the public health with an adequate margin of safety or to protect the public welfare. EPA has concluded that the current scientific knowledge provides a strong basis for the revised PM<INF>10</INF> and new PM<INF>2.5</INF> standards. We, along with the Departments of Transportation, Health and Human Services, Labor, and others, will continue to sponsor research to better understand the causes and mechanisms, as well as the effects of fine particles on human health, and the species and sources of PM<INF>2.5</INF>. EPA will also promptly initiate a new review of the scientific criteria on the effects of airborne particles on human health and the environment. By July 2002, we will have determined, based on data available from its review, whether to revise or maintain the standards. This determination will have been made before any areas have been designated nonattainment under the PM<INF>2.5</INF> standards and before imposition of any new controls related to the PM<INF>2.5</INF> standards. implementation of new pm<INF>2.5</INF> naaqs The first priority for implementing the new PM<INF>2.5</INF> standard is establishing a comprehensive monitoring network to determine ambient fine particle concentrations across the country. The monitoring network will help EPA and the states determine which areas do not meet the new air quality standards, what the major sources of PM<INF>2.5</INF> in various regions are, and what action is needed to clean up the air. EPA and the states will consult with affected stakeholders on the design of the network and will then establish the network, which will consist of approximately 1,500 monitors. All monitors will provide for limited ``speciation,'' or analysis of the chemical composition, of the particles measured. At least 50 of the monitors will provide for a more comprehensive speciation of the particles. EPA will work with states to deploy the PM<INF>2.5</INF> monitoring network. Based on the ambient monitoring data we have seen to date, these would generally not include agricultural areas. The EPA will fund the cost of purchasing the monitors, as well as the cost of analyzing particles collected at the monitors to determine their chemical composition. Because we are establishing standards for a new indicator for particulate matter (i.e., PM<INF>2.5</INF>), it is critical to develop the best information possible before attainment and nonattainment designation decisions are made. Three calendar years of monitoring data that complies with EPA's monitoring requirements will be used to determine whether areas meet or do not meet the PM<INF>2.5</INF> standards. Three years of data will be available from the earliest monitors in the spring of 2001, and 3 years of data will be available from all monitors in 2004. Following this monitoring schedule and allowing time for data analysis, Governors and EPA will not be able to make the first determinations as to which areas should be designated nonattainment until at least 2002, 5 years from now. The Clean Air Act, however, requires that EPA make designation determinations (i.e., attainment, nonattainment, or unclassifiable) within 2 to 3 years of revising a NAAQS. To fulfill this requirement, in 1999 EPA will issue ``unclassifiable'' designations for PM<INF>2.5</INF>. These designations will not trigger the nonattainment planning or control requirements of Title I of the Act. When EPA designates nonattainment areas for PM<INF>2.5</INF> pursuant to the Governors' recommendations beginning in 2002, areas will be allowed 3 years to develop and submit to EPA pollution control plans showing how they will meet the new standards. As for ozone, areas will have up to 10 years from the date of being redesignated as nonattainment until they will have to attain the PM<INF>2.5</INF> standards. In addition, two 1-year extensions are possible. In developing strategies for attaining the PM<INF>2.5</INF> standards, it will be important to focus on measures that decrease emissions that contribute to regional pollution. Available information indicates that nearly one-third of the areas projected to not meet the new PM<INF>2.5</INF> standards, primarily in the Eastern United States, could come into compliance as a result of the regional SO<INF>2</INF> emission reductions already mandated under the Clean Air Act's acid rain program, which will be fully implemented between 2000 and 2010. Similarly, the Grand Canyon Visibility Transport Commission, consisting of western states and tribes, committed to reductions in regional emissions of PM<INF>2.5</INF> precursors (sulfates, nitrates, and organics) to improve visibility across the Colorado Plateau. As detailed PM<INF>2.5</INF> air quality data and data on the chemical composition of PM<INF>2.5</INF> in different areas become available, EPA will work with the states to analyze regional strategies that could reduce PM<INF>2.5</INF> levels. If further cost-effective regional reductions help areas meet the new standard, EPA will encourage states to work together to use a cap and trade approach similar to that used to curb acid rain. The acid rain program delivered environmental benefits at a greatly reduced cost. Given the regional dimensions of the PM<INF>2.5</INF> problem, local governments and local businesses should not be required to undertake unnecessary planning and local regulatory measures when the problem requires action on a regional basis. Therefore, as long as the states are doing their part to carry out regional reduction programs, the areas that would attain the PM<INF>2.5</INF> standards based on full implementation of the acid rain program will not face new local requirements. Early identification of other regional strategies could also assist local areas in completing their programs to attain the PM<INF>2.5</INF> standards after those areas have been designated nonattainment. The EPA will also encourage states to coordinate their PM<INF>2.5</INF> control strategy development and efforts to protect regional visibility. Visibility monitoring and data analysis will support both PM<INF>2.5</INF> implementation and the visibility program. implementation of revised pm<INF>10</INF> naaqs In its rule, EPA is revising the current set of PM<INF>10</INF> standards. Given that health effects from coarse particles are still of concern, the overall goal during this transition period is to ensure that PM<INF>10</INF> control measures remain in place to maintain the progress that has been achieved toward attainment of the current PM<INF>10</INF> NAAQS (and which provides benefits for PM<INF>2.5</INF>) and protection of public health. To ensure that this goal is met, the existing PM<INF>10</INF> NAAQS will continue to apply until actions by EPA, and by states and local agencies, are taken to sustain the progress already made. cost-effective implementation strategies Consistent with states' ultimate responsibility to attain the standards, EPA will encourage the states to design strategies for attaining the particulate matter and ozone standards that focus on getting low cost reductions and limiting the cost of control to under $10,000 per ton for all sources. Market-based strategies can be used to reduce compliance costs. EPA will encourage the use of concepts such as a Clean Air Investment Fund, which would allow sources facing control costs higher than $10,000 a ton for any of these pollutants to pay a set annual amount per ton to fund cost-effective emissions reductions from non-traditional and small sources. Compliance strategies like this will likely lower the costs of attaining the standards through more efficient allocation, minimize the regulatory burden for small and large pollution sources, and serve to stimulate technology innovation as well. future activities In accordance with the President's July 16 directive, to ensure that the final details of the implementation strategy are practical, incorporate common sense, and provide for appropriate steps toward cleaning the air, input is needed from many stakeholders including representatives of State and local governments, industry, environmental groups, and Federal agencies. EPA will continue seeking advice from a range of stakeholders and, after evaluating their input, propose the necessary guidance to make these approaches work. In particular, EPA will continue working with the Subcommittee on Implementation of Ozone, Particulate Matter and Regional Haze Rules which EPA established to help develop innovative, flexible and cost-effective implementation strategies. Moreover, EPA will continue to work with a number of Federal agencies to ensure that those agencies comply with these new standards in cost-effective, common sense ways. EPA plans to issue all guidance and rules necessary for this implementation strategy by the end of 1998. EPA will continue to work with the Small Business Administration (SBA) because small businesses are particularly concerned about the potential impact resulting from future control measures to meet the revised PM and ozone standards. EPA, in partnership with SBA, will work with the states to include in their SIPs flexible regulatory alternatives which minimize the economic impact and paperwork burden on small businesses to the greatest possible degree consistent with public health protection. conclusions In summary, EPA believes that the new ozone and particulate matter standards will provide important new health protection and will improve the lives of Ameri- cans in coming years. Our implementation strategy will ensure that these new standards are implemented in a common sense, cost-effective and flexible manner. We intend to work closely with State and local governments, other Federal agencies and all other interested parties to accomplish this goal. Mr. Chairman, this concludes my written statement. I will be happy to answer any questions that you might have. 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