<DOC>
[109 Senate Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:30720.wais]
S. Hrg. 109-876
THE NEED FOR MULTI-EMISSIONS LEGISLATION
=======================================================================
HEARING
before the
SUBCOMMITTEE ON CLEAN AIR, CLIMATE CHANGE, AND NUCLEAR SAFETY
of the
COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
ONE HUNDRED NINTH CONGRESS
FIRST SESSION
__________
JANUARY 26, 2005
__________
Printed for the use of the Committee on Environment and Public Works
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congress.senate
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COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
ONE HUNDRED NINTH CONGRESS
FIRST SESSION
JAMES M. INHOFE, Oklahoma, Chairman
JOHN W. WARNER, Virginia JAMES M. JEFFORDS, Vermont
CHRISTOPHER S. BOND, Missouri MAX BAUCUS, Montana
GEORGE V. VOINOVICH, Ohio JOSEPH I. LIEBERMAN, Connecticut
LINCOLN CHAFEE, Rhode Island BARBARA BOXER, California
LISA MURKOWSKI, Alaska THOMAS R. CARPER, Delaware
JOHN THUNE, South Dakota HILLARY RODHAM CLINTON, New York
JIM DeMINT, South Carolina FRANK R. LAUTENBERG, New Jersey
JOHNNY ISAKSON, Georgia BARACK OBAMA, Illinois
DAVID VITTER, Louisiana
Andrew Wheeler, Majority Staff Director
Ken Connolly, Minority Staff Director
----------
Subcommittee on Clean Air, Climate Change, and Nuclear Safety
GEORGE V. VOINOVICH, Ohio, Chairman
CHRISTOPHER S. BOND, Missouri THOMAS R. CARPER, Delaware
JIM DeMINT, South Carolina JOSEPH I. LIEBERMAN, Connecticut
JOHNNY ISAKSON, Georgia FRANK R. LAUTENBERG, New Jersey
DAVID VITTER, Louisiana BARACK OBAMA, Illinois
C O N T E N T S
----------
Page
JANUARY 26, 2005
OPENING STATEMENTS
Bond, Hon. Christopher S., U.S. Senator from the State of
Missouri....................................................... 18
Carper, Hon. Thomas R., U.S. Senator from the State of Delaware.. 10
DeMint, Hon. Jim, U.S. Senator from the State of South Carolina.. 22
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma... 13
Isakson, Hon. Johnny, U.S. Senator from the State of Georgia..... 24
Jeffords, Hon. James M., U.S. Senator from the State of Vermont.. 15
Lautenberg, Hon. Frank, U.S. Senator from the State of New Jersey 20
Obama, Hon. Barack, U.S. Senator from the State of Illinois...... 23
Voinovich, Hon. George V., U.S. Senator from the State of Ohio... 1
WITNESSES
Gard, Hon. Beverly, Senator, Indiana State Senate, and chair,
Energy and Environment Affairs Committee....................... 30
Prepared statement........................................... 109
Responses to additional questions from:
Senator Jeffords......................................... 125
Senator Lautenberg....................................... 130
Harper, Ronald, chief executive officer and general manager,
Basin Electric Power Cooperative............................... 46
Prepared statement........................................... 131
Responses to additional questions from:
Senator Jeffords......................................... 133
Senator Lautenberg....................................... 134
Senator Voinovich........................................ 133
Parady, Fred, manager, Environmental Services, OCI Wyoming, L.P.,
on behalf of the National Association of Manufacturers......... 50
Prepared statement........................................... 235
Responses to additional questions from Senator Jeffords...... 239
Paul, John A., supervisor, Regional Air Pollution Control Agency,
on behalf of STAPPA/ALAPCO..................................... 28
Prepared statement........................................... 68
Responses to additional questions from:
Senator Inhofe........................................... 104
Senator Jeffords......................................... 106
Senator Lautenberg....................................... 108
Senator Voinovich........................................ 104
Schneider, Conrad G., advocacy director, Clean Air Task Force.... 47
Prepared statement..........................................134-164
Responses to additional questions from:
Senator Jeffords......................................... 226
Senator Lautenberg....................................... 229
Senator Voinovich........................................ 224
Young, Hon. Bob, Mayor, City of Augusta, GA, on behalf of the
U.S. Conference of Mayors...................................... 26
Prepared statement........................................... 64
Responses to additional questions from:
Senator Jeffords......................................... 66
Senator Lautenberg....................................... 68
Senator Voinovich........................................ 66
ADDITIONAL MATERIAL
Analysis, State and Territorial Air Pollution Program
Administrators/Association of Local Air Pollution Control
Officials (STAPPA/ALAPCO)......................................73-103
Charts:
Comparison of Growth Areas and Emissions..................... 6
Comparison of United States Energy Reserves (Quadrillion BTU) 8
Coal Use Correlates with Low Electricity Prices.............. 9
Industrial Price of Natural Gas ($/Mcf), 1997-2003........... 10
Supporting Documents, Senator Gard..........................112-124
The Clear Skies Act.......................................... 7
Letters from:
Hubbard, James W., The Maryland House of Delegates to Senator
Voinovich.................................................. 56
Paul, John A., on behalf of STAPPA/ALAPCO, dated February 16,
2005 to Senator Voinovich.................................. 43
Report, Natural Gas Update, prepared by Energy and Environmental
Analysis, Inc.................................................165-198
Statements:
American Farm Bureau Federation.............................. 243
American Public Power Association............................ 244
Bluestein, Joel, May 8, 2003................................199-223
National Conference of State Legislatures, July 2006......... 59
THE NEED FOR MULTI-EMISSIONS LEGISLATION
----------
WEDNESDAY, JANUARY 26, 2005
U.S. Senate,
Committee on Environment and Public Works,
Subcommittee on Clean Air, Climate Change,
and Nuclear Safety,
Washington, DC.
The subcommittee met pursuant to notice, at 10 o'clock a.m.
in room 406, Senate Dirksen Building, Hon. George Voinovich
(chairman of the subcommittee) presiding.
Present: Senators Inhofe, Voinovich, Bond, DeMint, Isakson,
Jeffords, Carper, Lautenberg, and Obama.
OPENING STATEMENT OF HON. GEORGE V. VOINOVICH,
U.S. SENATOR FROM THE STATE OF OHIO
Senator Voinovich. The committee will come to order.
Good morning and thank all of you for coming. We are here
today to discuss an issue on which I think there is broad
consensus. Our Nation needs multi-emission legislation.
This is not a new topic for this committee. It is our 23rd
hearing on multi-emission issues since 1998. Our consideration
of this important matter has spanned four different chairmen
and covered many issues ranging from mercury and greenhouse
gases to new source review to the National Ambient Air Quality
Standards referred to as NAAQS. I believe we have spent enough
time talking about this issue and that we must act now to
improve the environment and protect public health.
I hope we can renew the bipartisan spirit of this committee
which has come together to enact major environmental laws on
brownfields and safe drinking water, and that we can now pass a
multi-emissions piece of legislation specifically the Clear
Skies Act. First and foremost, legislation is needed for our
environment. The Clear Skies Act would be the most aggressive
clean air proposal ever enacted. On April 1, 2004,
Administrator Leavitt testified before the subcommittee that
sulfur dioxide and nitrogen oxide reductions ``will result in
some $50 billion being spent putting new equipment on old
plants that will provide for the highest amount of pollution
being reduced in the least amount of time in our Nation's
history.'' Although Clear Skies is costly and ambitious, I want
to make it clear that it is going to be expensive to implement
Clear Skies.
We should pass it because of the certainty it provides. It
gives our Nation environmental certainty that sulfur dioxide,
nitrogen oxide and mercury will be reduced by 70 percent by
2018. It ends the cycle of litigation and confrontation
obstructing further progress in reducing pollution. It also
provides regulatory certainty so that companies can invest in
needed pollution control.
Second, legislation is needed to help State and local
governments attain the new NAAQS standards. EPA recently
designated 474 counties as being in nonattainment for the new
NAAQS for ozone and 225 counties for particulate matter. The
designations are based on stricter standards. I want to make
that clear, not dirtier air. Chart 1 shows that in fact since
1970, while there have been increases of gross domestic product
by 176 percent, vehicle miles traveled by 155 percent, energy
consumption by 45 percent, and population by 39 percent,
emissions of the six main pollutants have decreased by 51
percent, a fact I shared with Tony Blair back in November. We
met with him when I was in London and he wasn't aware of what
we had done here in this country in terms of reducing
pollution. [The referenced chart follows on page 6.]
The nonattainment designations are a threat to many State
and local government economies. This point can be best
summarized by Cincinnati Chamber of Commerce President Michael
Fisher's testimony last year. He said, ``Job growth and capital
investment for existing operations in our region have been
hindered by the nonattainment designation. We have been told by
national site location consultants that nonattainment areas are
frequently not even included as potential locations for major
new manufacturing projects.''
The Clear Skies Act would help meet the Nation's new more
stringent air quality standards. Although it needs to be
updated, Chart 2 still shows that 90 percent of those counties
come into attainment under the reductions in Clear Skies and
EPA's new fuel and engine regulations to reduce sulfur. The
NAAQS are actually an unfunded mandate on our States and
localities, something I understand well as a former county
commissioner, mayor and Governor who brought almost all of
Ohio's counties but one into attainment. That was the first
thing that I did when I became Governor of Ohio was work to
bring my counties into attainment because I knew that
businesses that were there because we weren't in attainment
would not expand and I also knew that businesses we were trying
to attract to the State would fly over it because they didn't
want to get involved in nonattainment areas. [The referenced
chart follow on page 7.]
Clear Skies provides that assistance more quickly and
cheaply than current law. It expands the Nation's most
successful clean air initiative, the Acid Rain Program. Unlike
most of our Nation's environmental laws and regulations, this
program has had virtually no litigation, 100 percent compliance
and has achieved its reductions at less than the projected
cost. Clearly, this is what we should strive for in any multi-
emissions legislation and Clear Skies does exactly that.
Third, legislation is needed to harmonize our environmental
policies with our energy needs. As this chart shows, coal is
our most abundant energy source. We have more coal than natural
gas or oil reserves. You can see our natural gas reserves and
U.S. oil reserves. The fourth chart shows that the more coal
you use, the lower your electricity prices. Businesses and
manufacturers in my State and across the country depend on coal
and these low prices to stay competitive in the global
marketplace. [The referenced charts follow on pages 8 and 9.]
We are just going to keep sending jobs overseas if we don't
start addressing some major issues, litigation, health care
costs and higher energy and environment costs are a major part
of the puzzle if we are going to compete in that global
marketplace. Clear Skies will keep our energy prices stable and
jobs in America. It allows our Nation to continue to burn coal
meaning that we will not continue to rely on natural gas for
power generation.
Listen to this. Since 1992 nearly 88 percent of the new
power plants built have been for natural gas. The substantial
increase in the use of gas is one of the main reasons that we
have a natural gas crisis right now. Chart 5 shows natural gas
prices have nearly doubled their historic price for industrial
users who depend on it for manufacturing. Look at that chart.
Look at 1999 and see how natural gas costs have gone up and
where we are today. Definitely this country has lost jobs
because of high natural gas costs. I would say in my State the
recession began when we saw a tremendous spike in natural gas
costs. Businesses that had been profitable overnight became
unprofitable because they saw their natural gas costs
skyrocket. [The referenced chart follows on page 10.]
As Tom Mullen from Cleveland Catholic Charities testified
before this committee in 2002, we must also pay attention to
the impact on the poor and elderly of multi-emission bills that
increase electricity and home heating costs. In fact, higher
natural gas prices have forced us to increase funding for a
heat program to help low income families with their home
heating bills by $800 million since 1999. With this tough
winter, we are going to be asked to put more money in that
program and basically it is because those energy costs have
escalated to the extent that we have to do something to respond
to the needs of our older people and to the poor.
We need multi-emissions legislation to continue at a higher
rate than this country's commitment to cleaning up the
environment and protecting public health. As my first chart
showed, we have substantially cleaned up while the Nation has
grown. Clear Skies would continue this progress by being the
most aggressive clean air proposal ever enacted. Let us not
delay any further. We need to come together and in a bipartisan
fashion and pass this legislation. A broad coalition supports
Clear Skies and is working for its passage which I would like
to insert for the record. I am not going into it because I have
already exceeded my time by 53 seconds.
I look forward to hearing from our witnesses today on how
important it is that this committee and Congress come together
and pass this important multi-emissions legislation. I would
just show the chart of the various organizations that have
publicly endorsed this legislation. Thank you.
I would now like to call on Senator Carper. I am glad to be
working with you. Senator Carper and I have worked with each
other for a long time. We are both very active in the National
Governors Association.
There has been a lot of regionalism in this environmental
area. It is the Midwest and the Northeast. I ran into it when I
was chairman of the National Governors Association. I figure if
Carper and Voinovich can't get it together, then this country
is in big trouble. I look forward to working with my friend,
Tom Carper.
[The prepared statement of Senator Voinovich follows:]
Statement of Hon. George V. Voinovich, U.S. Senator from the
State of Ohio
The hearing will come to order. Good morning and thank you all for
coming. We are here today to discuss an issue on which I think there is
broad consensus: our nation needs multi-emissions legislation.
This is not a new topic for this Committee; it is our 23rd hearing
on multi-emissions issues since 1998. Our consideration of this
important matter has spanned four different chairmen and covered many
issues ranging from mercury and greenhouse gases to new source review
to the National Ambient Air Quality Standards--referred to as NAAQS.
I believe we have spent enough time talking about this issue and
that we must act now to improve the environment and protect public
health. I hope we can renew the bipartisan spirit of this Committee--
which has come together to enact major environmental laws on
brownfields and safe drinking water and that we can now pass multi-
emissions legislation, specifically the Clear Skies Act.
First and foremost, legislation is needed for our environment. The
Clear Skies Act would be the most aggressive clean air proposal ever
enacted. On April 1, 2004, EPA Administrator Leavitt testified before
this Subcommittee that sulfur dioxide and nitrogen oxide reductions:
``. . . will result in some $50 billion being spent putting new
equipment on old power plants that will provide for the highest
amount of pollution being reduced in the least amount of time
in our history.''
Although Clear Skies is costly and ambitious, we should pass it
because of the certainty it provides. It gives our nation environmental
certainty that sulfur dioxide, nitrogen oxide, and mercury will be
reduced by 70 percent by 2018--period. It ends the cycle of litigation
and confrontation obstructing further progress in reducing pollution.
It also provides regulatory certainty so that companies can invest in
needed pollution controls.
Second, legislation is needed to help state and local governments
attain the new NAAQS. EPA recently designated 474 counties across the
country as being in nonattainment for the new NAAQS for ozone and 225
counties for particulate matter.
The designations are based on stricter standards, not dirtier air.
[CHART 1] In fact, since 1970, while there have been increases of Gross
Domestic Product by 176 percent, vehicle miles traveled by 155 percent,
energy consumption by 45 percent, and population by 39 percent--
emissions of the six main pollutants have decreased by 51 percent.
The nonattainment designations are a threat to our state and local
economies. This point can best be summarized by Cincinnati Chamber of
Commerce President Michael Fisher's testimony also on April 1, 2004:
``. . . job growth and capital investment for existing
operations in our region have been hindered by the
nonattainment designation. . .(and we have) been told by
national site location consultants that nonattainment areas are
frequently not even included as potential locations for major
new manufacturing projects . . .''
The Clear Skies Act would help meet the nation's new, more
stringent air quality standards. [CHART 2] Although it needs to be
updated, this chart still shows how 90 percent of these counties come
into attainment under the reductions in Clear Skies and EPA's new fuel
and engine regulations to reduce sulfur. The NAAQS are actually an
unfunded mandate on our states and localities, something I understand
well as a former county commissioner and mayor--and as a governor who
brought almost all of Ohio's counties into attainment. Our local
communities need our help and need it now.
Clear Skies provides that assistance more quickly and cheaply than
current law. It expands the nation's most successful clean air
initiative--the Acid Rain Program. Unlike most of our nation's
environmental laws and regulations, this program has had virtually no
litigation, 100 percent compliance, and has achieved its reductions at
less than the projected cost. Clearly, this is what we should strive
for in any multi-emissions legislation--and Clear Skies does exactly
that.
Third, legislation is needed to harmonize our environmental
policies with our energy needs. [CHART 3] As this chart shows, coal is
our most abundant energy source--we have more coal than natural gas or
oil reserves. It is also our cheapest energy source. [CHART 4] This
second chart basically shows that the more coal you use the lower your
electricity prices. Businesses and manufacturers in my state and across
the country depend on coal and on these low prices to stay competitive
in the global marketplace. We are just going to keep sending jobs
overseas if we don't start addressing many of these issues--litigation,
health care, and higher energy and environment costs are a major piece
of the puzzle.
Clear Skies will keep energy prices stable and jobs in America. It
allows our nation to continue to burn coal--meaning that we will not
rely more on natural gas for power generation. Since 1992, nearly 88
percent of the new power plants built have been natural gas fired. This
substantial increase in the use of gas is one of the main reasons that
we have a crisis right now. [CHART 5] As this chart shows, natural gas
prices have nearly doubled their historical price for industrial users,
who depend on it most for manufacturing.
As Tom Mullen from Cleveland Catholic Charities testified before
this Committee in 2002, we must pay special attention to the impact on
the poor and elderly of multi-emissions bills that increase electricity
and home heating costs. In fact, higher natural gas prices have forced
us to increase funding for the LIHEAP program to help low income
families with their home heating bills by $800 million since 1999.
We need multi-emissions legislation to continue at a higher rate
this country's commitment to cleaning up the environment and protecting
public health. As my first chart showed, we have substantially cleaned
up our air while the nation has grown. Clear Skies would continue this
progress by being the most aggressive clean air proposal ever enacted.
Let's not delay any further. We need to come together in a
bipartisan fashion and pass this legislation. A broad coalition
supports Clear Skies and is working for its passage--including (among
others) farmers, chemistry, public power, and many legislators.
I look forward to hearing from our witnesses today on how important
it is that this Committee and Congress come together and pass this
important multi-emissions legislation.
Thank you.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
OPENING STATEMENT OF HON. THOMAS R. CARPER,
U.S. SENATOR FROM THE STATE OF DELAWARE
Senator Carper. Thank you. We sat next to each other for a
great many years. Senator Voinovich has heard me say as
Governor and as a U.S. Senator, I think a major role of
government is to provide a nurturing environment for job
creation and job preservation. We know from our time as
Governors, if you have companies that are profitable, if they
are making money, if they are paying taxes, hiring people to
work out of colleges, high schools, off welfare rolls, off
unemployment rolls, if you have all that going for you, the
rest is pretty easy.
Having said that, I would also add it is important that
government not be the lapdog of business or industry. It is
important for companies to play by the rules, it is important
for them to pay their taxes and be good citizens, good stewards
of the environment among those responsibilities.
Recently I spoke at a student assembly back in Delaware. I
know we have opportunities to visit schools in our own States
but I spoke for a bit and then we opened it to the students for
questions. The first question this one student asked was what
was the hardest thing about your job? I said, ``I think the
hardest thing about my job is finding the right sense of
balance in my life, what I do here in Washington, my
responsibilities here as a legislator, my responsibilities to
help build my part of the Democratic Party in the State and in
this country and try to find good people to run and support
their candidacy, my responsibilities as someone who is trying
to be a good husband, a good father, a good son to a mom who
has Alzheimer's Disease and to somehow try to balance all those
things and get it into a 24-hour day.'' We all face similar
kinds of problems.
I didn't say it at the time but just as difficult a
challenge for me with respect to balance is finding the right
balance among competing interests that come before us on issues
that are important to us as individuals and important to our
Nation. We have been able to find that right balance in recent
months on a couple difficult issues, trying to take the
recommendations of the 9/11 Commission and put them into
legislation to restructure our intelligence operations in this
country; we are now coming together and I think with a good
consensus on significant changes to class action legislation; I
think we are close to an issue that Senator Voinovich and I and
others care about a lot, finding a good sense of balance on
asbestos litigation reform. I think we are coming close to that
as well.
Among the reasons why we have made progress on those fronts
are strong Presidential leadership and Presidential flexibility
and in addition to that, congressional leadership, bipartisan
congressional leadership and flexibility. I would add to that
unrelenting efforts in many cases of private citizens. The
families who were victims of 9/11 certainly come to mind and as
we work with asbestos litigation to try to balance the
competing interests of victims, labor unions, trial bar,
insurers, businesses, those folks have been at the table trying
to help us shape our legislation.
Last, I would say among the key reasons we have made
progress in those areas is the ability to work across the
aisle. I have found the working relationship between Senator
Collins and Senator Lieberman as something we should hold out
as the gold standard as they work to bring us together on 9/11.
Maybe that will be a role model for us as we tackle this issue
here this year.
Clean air legislation calls out for the latter. I am
encouraged given the long working relationship and frankly the
long friendship that Senator Voinovich and I have enjoyed that
perhaps this year we can make that progress.
I would say to my colleagues, especially my friends on the
Republican side, if we take the approach here that it has to be
my way or the highway, we are in for gridlock that is going to
make this morning's traffic jams coming into Washington, DC
look like a day at the beach. It just can't be my way or the
highway. There is room for finding and building consensus and
we have to work until we find it.
The stakes are high. There are hundreds of thousands of
kids across this country, probably millions of kids who have
asthma, who use these inhalers, who have asthma attacks who end
up in the hospital and people who die from this stuff because
our air is not clean enough. There are millions of women of
child bearing age who have higher levels of mercury that are
unsafe not just for them but for the children they are going to
bring into this world.
I am reminded every time my wife and our boys drive down to
North Carolina where my wife is from and we drive through the
Blue Ridge Mountains and I think I am in the Smokey Mountains
because the haze is so thick you can almost cut through it. I
know not everyone is convinced global warming is a problem or
an issue. For a number of years, frankly I was not either and I
have become convinced and believe it. We need to address that
as well.
The last thing I would say in my first race for Governor, a
question was asked at a debate with my opponent. The question
was this, if you are elected Governor, what will it be? What
will be the priority, the economy or the environment? I
responded at the time both. I think the right answer today is
still both. We can address the economic issues that Senator
Voinovich and I share and the environmental issues, the health
issues that a lot of us share as well.
I will close with this. Most tough issues around here, and
we went through this in orientation with our new members, you
need a lot more than 50 votes. On a lot of the tough issues,
you need 60. The way to get to those is to work across the
aisle. I am willing to do that and I look forward to doing
that. It is hard for me to imagine how we get to that number of
votes without doing something on global warming, that aspect of
clean air.
Senator Jeffords has an admirable proposal and a clear
skies proposal from the Administration that has value and the
last thing I would say is this, I never liked it when I had
just two alternatives, polar alternatives. I always like to be
able to vote for something rather than against something.
Senators Alexander, Gregg and Senator Chafee and myself have
worked to try to find some middle ground. We will be talking
about that during the course of this hearing and in the weeks
ahead. I don't know that is the middle ground around which we
can begin to rally but I hope it might provide some assistance
as we move in that direction.
Thank you, Mr. Chairman.
[The prepared statement of Senator Carper follows:]
Statement of Hon. Thomas R. Carper, U.S. Senator from the
State of Delaware
I would like to thank Senators Voinovich and Inhofe for scheduling
this hearing. The fact that the committee has placed multi-pollutant
legislation so high on the agenda for the 109th Congress shows a
commitment to the issue that will be necessary to pass a bill. However,
to pass multi-pollutant legislation, it will require agreement and
cooperation from both sides of the aisle.
Clean air does not have to be a partisan issue. It shouldn't be a
partisan issue. This committee has always acted in a bipartisan way,
and if you look back in history, the most significant environmental
laws all passed with overwhelming support of both Democrats and
Republicans. I hope that will be the case on the issue of clean air.
I have concerns about the President's Clear Skies plan because it
does not go far enough, fast enough, and it does nothing to address the
role electricity generation plays in global warming. The government has
a responsibility to provide clean air for people to breathe. If we
establish the right targets and timelines, American ingenuity will meet
the challenge, clean technologies will come to market and create new
jobs, and emissions will be reduced. But if we do nothing or set the
wrong targets then we will have failed in one of our basic
responsibilities. Clear Skies sets the wrong targets and timetables for
the emissions it does address, and it completely misses the mark on
CO<INF>2</INF> and global warming. We can do better.
Power plants, particularly those burning coal, are a leading source
of air pollution in a state like Delaware and across the nation. Since
1970, the Clean Air Act has helped clean up our nation's air, but we
still have work to do. An example of what we need to do comes from the
EPA itself, which reported that, in 2000, there were nearly 2 million
emergency room visits and nearly half a million hospitalizations due to
asthma. Moreover, the rate of asthma among school children has more
than doubled in the past 20 years!
From the perspective of industry, businesses do not like
unpredictability. Currently, we have several regulations on various
pollutants and pollution sources with different implementation
schedules and often overlapping goals. New ozone and fine particulate
standards are currently being implemented, while new standards for
mercury are pending before the EPA right now. Meanwhile, states are
considering regulating CO<INF>2</INF>. A more-coordinated approach is
needed, not just to provide cleaner air but to provide regulatory
certainty to utilities.
Last Congress, I introduced a four pollutant bill called the Clean
Air Planning Act with Sens. Chafee, Gregg and Alexander. The Clean Air
Planning Act takes a market-based approach that, compared to Clear
Skies, would achieve the following for only an additional 2 percent in
total system costs: an additional 33 million tons of nitrogen oxides
reductions; an additional 25 million tons of sulfur dioxide reductions;
an additional 150 tons of mercury reductions; and an additional 6
billion tons of CO<INF>2</INF> reductions, plus business and investment
certainty.
Dollar for dollar, our 4-pollutant proposal achieves significantly
greater benefits than the president's 3-pollutant proposal. Including
the cost of regulating CO<INF>2</INF>, which is minimal, the total cost
difference between Clear Skies and the Clean Air Planning Act over a
20-year period (2005 to 2025) is about 2 percent. The EPA has estimated
that retail electricity prices would increase by only $1.20 per month
for the average residence under the Clean Air Planning Act versus under
Clear Skies.
You can't measure a clean air bill by cost alone, however. You also
have to take into consideration public health benefits. When our bill
is fully implemented, it will result in $60 billion in public health
benefits and prevent 5,900 fewer premature deaths.
The key question is what will happen now. To a large degree, that
is up to the President and up to the leadership in the House and
Senate. I am concerned about reports saying that the White House and
Senate Republicans want to move Clear Skies quickly and without fully
engaging Democrats about what is best for the country. If the approach
to moving this bill is going to be ``my way or the highway'' then we're
going to end up in a traffic jam. I hope we can work through our
differences and produce legislation that will improve our air quality
in a cost-effective way.
Senator Voinovich. Thank you, Senator Carper.
I will now call on the chairman of our committee, Senator
Inhofe.
OPENING STATEMENT OF HON. JAMES M. INHOFE,
U.S. SENATOR FROM THE STATE OF OKLAHOMA
Senator Inhofe. Thank you, Mr. Chairman.
I had an opening statement that would have consumed my 5
minutes but as I crossed out things as you said them, I am down
to about 30 seconds now.
I think that chart particularly shows the success story
that we have in this country in terms of the Clean Air Act and
the amendments in the last 30 years.
I am glad we are holding this hearing this early. When I
was chairman of this subcommittee we actually had eight
hearings on this. We have covered this in every possible way.
The debate has been very thorough and I think we are in
position now to do something, particularly with the leadership
that we have on this subcommittee. Bringing together two people
who have been working together, as far as Senator Voinovich is
concerned, I had him come in and testify before this
subcommittee when I chaired this subcommittee and he was
Governor of Ohio. He did an excellent job at that time. In
fact, we heard from a couple other Governors. Senator Jeffords
and I received a letter from both George Pataki and Arnold
Schwarzeneggar from California and New York expressing their
concern that States maintain the ability to have stronger
pollution controls than those set for the Nation as a whole. I
think that is one thing this bill does. I would like to enter
this into the record immediately following my opening remarks.
Senator Voinovich. Without objection.
Senator Inhofe. I think probably the most telling chart
that was held up during the chairman's opening remarks was the
one that showed the success story, that our air is far cleaner
than it was a few decades ago. In the last 30 years, while our
GDP has almost tripled, our energy consumption has increased by
45 percent, emissions from the six major pollutants have been
cut by more than half.
We recognize that a lot more needs to be done. On Monday, I
introduced with Senator Voinovich the Clear Skies bill. This is
the most aggressive mandated reduction in pollutants in the
history of this country, of any President, of any time. I think
it is very important we understand that.
They were trying to do this earlier by rule and I think we
all understand that rules do nothing but invite uncertainty and
lawsuits and we have had enough of that in addressing this
subject. What we need is legislation and our legislation will
clean the air further, faster and cheaper than existing laws.
While some might criticize the legislation because it
doesn't address the divisive issue of imposing carbon caps,
carbon dioxide is not a pollutant, I think we understand that
and while some would sacrifice these massive reductions that
would be mandated for a political agenda, I think it is wrong.
Let us have a debate on carbon dioxide, on carbon caps, on
taxes, all these things dealing with global warming. We will
have that debate. We don't want to kill the opportunity to have
the most aggressive reduction any President has ever proposed
by keeping this from being passed.
I look forward to this hearing. I think we will have a
hearing next week some time on this subject and I thank you for
giving this the priority you have early in this session.
Thank you.
[The prepared statement of Senator Inhofe follows:]
Statement of Hon. James M. Inhofe, U.S. Senator from the
State of Oklahoma
Thank you for holding this hearing today, Chairman Voinovich. It is
another important step in our long-standing consideration of multi-
emission legislation. We are now the fourth Congress to address this
issue and this is the 23rd hearing of this Committee to address issues
related to multi-emissions legislation. I held several hearings when I
was Chairman of this Subcommittee, and I am now the fourth Chairman to
examine the matter.
This Committee has vetted the issue thoroughly and debated every
aspect. Our examination of this issue over the next month represents
the culmination of an exhaustive, deliberate, and time-consuming
process to update and modernize our nation's clean air laws.
The Clean Air Act is a vital law to enable Americans to breathe
healthy air. And it has had many successes. America's air is far
cleaner than a few decades ago. In the last 30 years, while our Gross
Domestic Product almost tripled and our energy consumption has
increased by 45 percent, emissions of the six major pollutants have
been cut by more than half. And lead has been virtually eliminated.
Despite this, more work needs to be done. New more stringent
particulate and ozone standards were implemented and hundreds of
counties across the nation are not in attainment with these much lower
pollution levels. To assist these counties with coming into attainment
and continue our clean air progress, further emission reduction will be
needed. The most effective, most flexible, and least burdensome way to
achieve these reductions is to build on the most successful part of the
Clean Air Act--the Acid Rain program.
On Monday, I introduced with Senator Voinovich the Clear Skies
bill, proposed by President Bush. This bill--which cuts sulfur dioxide,
nitrogen oxides, and mercury by 70 percent--is the most aggressive
emissions reduction initiative ever proposed by an American President.
Multi-emissions legislation is necessary to help states come into
compliance with the law and to keep jobs here in America. Coal is our
nation's most abundant resource. It provides not only jobs, but keeps
energy prices affordable for the elderly and poor. As important,
keeping coal as the backbone of our electric grid allows natural gas to
be used for more valuable purposes, such as home heating and the
manufacturing sector. Natural gas is in a state of crisis due to limits
on production. Our bill will not put further stresses on natural gas
demand, as competing proposals do.
Rules to address sulfur dioxide, nitrogen oxides, and mercury are
due out later this year. But these rules suffer from what all rules
suffer from lack of certainty. Litigation of clean air rules in recent
years has become an epidemic. The result is that rules provide neither
the certainty that we will achieve needed emission reductions nor the
certainty industry needs to invest the tens of billions of dollars that
will be needed to achieve these reductions. What is needed is
legislation. And our legislation will clean the air further, faster,
and cheaper than the existing law.
While some have criticized our legislation because it does not
address the divisive issue of imposing carbon caps, carbon dioxide is
not a pollutant. While some would sacrifice public health on the alter
of a political agenda to regulate carbon dioxide, I believe that the
time to move forward with making our skies cleaner is upon us.
I look forward to today's hearing. We will have a full committee
hearing 1 week from today and it is my intention to hold a full
committee markup before the President's Day recess.
Senator Voinovich. I would like to call on our Ranking
Democrat member, Senator Jeffords. I want to say publicly how
much I admire your conscientious effort in this area. I know
you have spent hours and hours on a piece of legislation that
you promoted and I am anxious to hear what you have to say this
morning.
OPENING STATEMENT OF HON. JAMES M. JEFFORDS,
U.S. SENATOR FROM THE STATE OF VERMONT
Senator Jeffords. Thank you.
I am glad we are here today to discuss the need for multi-
pollution legislation. I have been a strong proponent of such
bipartisan legislation for years. We need to lock in emissions
and reductions as soon as we can to meet our public health and
environmental responsibilities on schedule.
Yesterday, I reintroduced the Clean Power Act with 18
bipartisan co-sponsors. Despite great progress in reducing
pollution over the last 30 years, science tells us that we
still have an enormous challenge now and ahead. We have only
barely touched upon many of these challenges. We still must
achieve safe air quality for all Americans to breathe and to
live longer lives and finally and fully address acid rain and
mercury contamination, clear the Vistas National Park and
really begin to deal with the human induced climate change.
Before I go on, I want to provide some historical context
on the committee's actions on this important matter. In early
2001, there was a bipartisan dialog to establish principles for
the committee to use in developing multi-pollution legislation.
That dialog was disrupted by the President's decision to
reverse his pledge to control carbon dioxide from the power
plants.
In October 2001, we had a widely attended stakeholder
meeting on multi-pollutant legislation to restore some type of
dialog but without much luck. In early 2002, I started a brief
but unsuccessful attempt to resume negotiations on a four
pollutant bill but the Administration refused to negotiate or
even to provide the full committee with timely assistance. So
with no one on the other side to negotiate with or to
compromise with, the committee under my chairmanship approved
the Clean Power Act in June 2002. If that legislation had been
signed into law, we would have been well over our way to
reducing the number of people, 25,000 or so, who died
prematurely each year from power plant pollution. There were
Republican objections to taking up the bill, so it went no
where. Gradually, it has become clear that the Administration
and most of the utility industry did not and does not want
Congress to successfully legislate on this matter.
Legislation would require compromise and a strengthening of
the Clean Air Act, not a weakening to get public support.
Instead, the Administration has tried to unravel many important
clean air programs with special focus on gutting the new source
review or NSR Program. Last year, the Administration proposed a
Clean Air Act interstate rule using authority already in the
law. Unfortunately, the approach is inadequate to help
nonattainment areas meet the deadlines in the law on time. Non-
attainment areas need reductions in clean air monitoring data
by 2009 for ozone and by 2010 for fine particulate matter, not
in 2018.
The Clean Air Act has ample authority now and requires the
EPA to make sure that all States have adequate implementation
plans in place to prevent interstate pollution and to meet the
health-based standards on time. Any delay in the schedule is
unwise and causes more health and environmental damage. Our
legislation avoids such delays. EPA's analysis shows that our
bill would prevent 13,000 more premature deaths in 2010 and
18,000 more in 2015 than will Clear Skies. The Administration
has proposed several options for controlling the mercury due to
the deadline in March. Unfortunately, these options don't
appear to be legal and to really ever reduce mercury by any
serious amount.
As I have said many times in public and in private, I am
prepared to compromise to achieve faster and better public
health and environmental benefits than is current law. That
even includes some kind of reasonable compromise on controlling
carbon dioxide but we cannot legislate responsibly and ignore
manmade global warming completely. The U.S. power sector emits
one-tenth of the world's total carbon dioxide emission. To
ignore this fact defies reason, logic and the peer review work
of the National Academy of Sciences, the American Geophysical
Union and the International Panel on Climate Change.
It has surprised me to learn without any consultation
beforehand that we will mark up a three pollutant bill in 3
weeks, a bill that is not a product of bipartisan compromise or
consensus. We are here to discuss the need for multi-pollution
legislation. There is a compelling need for such legislation.
This is especially true given the Administration's efforts to
delay the implementing and enforcing current law.
Unfortunately, there is no process in place to produce or pass
bipartisan legislation that could achieve stronger, better and
faster benefits than the Clean Air Act already guarantees.
Whether these benefits are attained by the genuine
enforcement and compliance, State actions or through
litigation, still I am an optimist and I remain hopeful that we
can do better and meet the challenges that I have outlined.
There is a negotiated compromise to be found, then Senators
Carper and Voinovich working together can almost certainly find
it.
I look forward to working with you and look forward to the
testimony of the witnesses to follow.
[The prepared statement of Senator Jeffords follows:]
Statement of Hon. James M. Jeffords, U.S. Senator from the
State of Vermont
I'm glad we're here today to discuss the need for multi-pollutant
legislation. I've been a strong proponent of such bipartisan
legislation for years. We need to lock in emissions reductions soon so
we can meet our public health and environmental responsibilities on
schedule.
Yesterday, I re-introduced the Clean Power Act with 18 bipartisan
cosponsors and just that kind of guarantee. Despite great progress in
reducing pollution over the last 30 years, science tells us that we
still have enormous challenges now and ahead.
We have only barely touched upon many of these challenges. We still
must:
achieve safe air quality for all Americans to breathe and to live
longer lives;
finally and fully address acid rain and mercury contamination;
clear the vistas in our national parks; and,
really begin to deal with human-induced climate change.
But, before I go on, I want to provide some historical context on
the Committee's actions on this important matter.
In early 2001, there was a bipartisan dialogue to establish
principles for the Committee to use in developing multi-pollutant
legislation. That dialogue was disrupted by the President's decision to
reverse his pledge to control carbon dioxide from power plants. In
October 2001, we had a widely attended stakeholder meeting on multi-
pollutant legislation to restore some type of dialogue, but without
much luck. And in early 2002, I started a brief but unsuccessful
attempt to resume negotiations on a four-pollutant bill. But the
Administration refused to negotiate or even to provide the full
Committee with timely technical assistance.
So, with no one on the other side to negotiate with or to
compromise with, the Committee, under my chairmanship, approved the
Clean Power Act in June 2002. If that legislation had been signed into
law, we would have been well on our way to reducing the number of
people, 25,000 or so, who die prematurely each year from power plant
pollution. But there were Republican objections to taking up that bill,
so it went nowhere.
Gradually, it has become crystal clear that the Administration and
most of the utility industry did not and does not want Congress to
successfully legislate on this matter.
Legislating would require compromise and a strengthening of the
Clean Air Act, not a weakening, to get the public's support. Instead,
the Administration has tried to unravel many important Clean Air
programs with a special focus on gutting the New Source Review, or NSR,
program.
Last year, the Administration proposed the Clean Air Interstate
Rule, using authority already in the law. Unfortunately, this approach
is inadequate to help non-attainment areas meet the deadlines in the
law on time. Non-attainment areas need reductions and clean air
monitoring data by 2009 for ozone and by 2010 for fine particulate
matter, not in 2018.
The Clean Air Act has ample authority now and requires the EPA to
make sure that all states have adequate implementation plans in place
to prevent interstate pollution and to meet the health-based standards
on time. Any delay in this schedule is unwise and causes more health
and environmental damage.
Our legislation avoids such delays. EPA's analysis shows that our
bill would prevent 13,000 more premature deaths in 2010 and 18,000 more
in 2015 than will Clear Skies. The Administration has proposed several
options for controlling mercury due to a deadline in March.
Unfortunately, these options don't appear to be legal or to really ever
reduce mercury by any serious amount.
As I have said many times, in public and in private, I am prepared
to compromise to achieve faster and better public health and
environmental benefits than in current law.
That even includes some kind of reasonable compromise on
controlling carbon dioxide. But we cannot legislate responsibly and
ignore manmade global warming completely. The U.S. power sector emit's
one-tenth of the world's total carbon dioxide emissions. To ignore this
fact defies reason, logic and the peer-reviewed work of the National
Academy of Sciences, the American Geophysical Union and the
International Panel on Climate Change.
So, it has surprised me to learn, without any consultation
beforehand, that we will mark up a 3-pollutant bill in 3 weeks, a bill
that is not a product of bipartisan compromise or consensus. We are
here to discuss the need for multi-pollutant legislation. There is a
compelling need for such legislation. This is especially true given the
Administration's efforts to delay implementing and enforcing current
law.
But, unfortunately, there is no process in place to produce or pass
bipartisan legislation that could achieve stronger, better and faster
benefits than the Clean Air Act already guarantees--whether those
benefits are obtained by genuine enforcement and compliance, state
actions or through litigation.
Still, I am an optimist and I remain hopeful that we can do better
and meet the challenges that I have outlined. If there is a negotiated
compromise to be found, then Senators Carper and Voinovich working
together can almost certainly find it. I look forward to working with
them and the testimony of the witnesses.
Senator Voinovich. Thank you.
I would like to reiterate that the procedure we are going
to follow in this committee is the chairman will speak, the
Ranking Member of the subcommittee, we will then recognize the
chairman of the committee as a whole and the Ranking Member and
that is why we followed that procedure here this morning. Then
we are going to follow a rule for the new members, the early
bird rule. That basically says that those that show up early
get a chance to make their opening statements before those that
come later.
Following that rule, Senator Bond, I would call upon you
for your statement.
OPENING STATEMENT OF HON. CHRISTOPHER S. BOND,
U.S. SENATOR FROM THE STATE OF MISSOURI
Senator Bond. Thank you.
I appreciate your comments about the emissions trading
provisions in the Clean Air Act amendments of 1990, sometimes
known as the Byrd-Bond Rule. In Missouri, we know it as the
Bond-Byrd Rule. I was the most junior member who showed up at
the organizing meeting for it and nobody else wanted to do it,
so the paper slid all the way down to me but having the strong
support of Senator Byrd assured us that the 18 votes we had in
that coalition was a majority. I am glad to hear that it is
working.
I appreciate your strong comments about the Clear Skies
Act, the fact that it is going to use this as well. I think
with the Clear Skies Act, it is obvious we have the opportunity
to cut the largest amount of pollution in history from electric
utilities. We have the opportunity to cut by 70 percent acid
rain producing sulfur dioxide, 70 percent of ozone producing
nitrogen oxides, 70 percent of poisonous mercury pollution and
we have the opportunity to help families and hundreds of
cities, we have the opportunity to help children and pregnant
mothers. I think we must take that opportunity.
Unfortunately, there apparently is going to be an effort to
change this bill, to add a provision that is absolutely
unworkable for those of us in the Midwest and many in the West
that would prevent this bill from passing with the 70 percent
cuts in SOx, NOx and Mercury. People who want us to expand this
bill to include carbon mandates mean well. I understand the
arguments they make. I know they believe that carbon controls
are the future and we should start now. Tragically, we do not
know how to make that work and it would be a poison pill that
would kill this bill and leave us with nothing.
Carbon mandates would have a crushing burden on families in
my State. Where I come from we get 80 percent of our
electricity produced from western coal; 100 percent of that is
Powder River Basin coal. I understand the opposite is true in
the Northeast. Many Northeastern States get their electricity
from natural gas and for them it is not a problem, but for our
Nation, for our energy it is a problem to be using natural gas
and boilers to generate electricity.
Twenty-five years ago I heard a lecture by Nobel laureate
Professor Glen Seabert and he said to use natural gas in
combustion boilers to generate electricity was like throwing
your best antique furniture in the fireplace to keep the house
warm. It is a highly uneconomical and unwise use of it. The use
by utilities of natural gas has driven the price of natural gas
as we saw on the chart to more than double. To force even
greater use of natural gas would put much higher gas and power
bills on communities, low income families would be faced with a
choice between heating and eating, fixed income seniors would
face tough decisions between turning off lights and freezing
and Missouri families would also be hurt by job losses. Many
employers in my State and across the Nation depend upon natural
gas as a feedstock. Fertilizer makers, chemical makers, the car
industry, all provide good wages that allow our families to
remain strong economically and strong in their health as well.
We are seeing already manufacturers closing down their
American plants and moving overseas. You talk about
outsourcing, driving the price of natural gas even higher is
going to be one of the biggest outsourcing effects we could
see. A carbon mandate increasing demand and driving up prices
would send jobs overseas.
Let us not kid ourselves, we would be sending pollution
overseas. Manufacturers in China and India will not follow U.S.
pollution control laws, they will pollute more and much of that
pollution will come right back to us in the air, water and
through our food supply.
Maybe some day there will be some way we can do it
affordably, to extract and sequester carbon without severe
economic hardship. Right now we know we can do that by planting
more trees. I have planted 10,000 and I challenge all my
friends to plant several thousand themselves but there is no
feasible way of sequestering it right now. We will when we
adopt this Clear Skies bill give a mandate and give a clear
demand for the creation of coal gasification plants to
substitute coal gas for natural gas and that will allow the
carbon to be segregated and when we find the means of
sequestering it, we can do that.
A bill to cut pollution from electric utilities right now
that includes a mandated carbon cut will not pass the Senate,
it will not pass the House, the President will not sign it. The
carbon mandates will kill the bill. I don't think there is a
purposeful effort to kill the bill but a carbon mandate would.
We have a choice, we take three-quarters of a loaf, SOx,
NOx and mercury or take no loaf. I think it is time that we
take the three-quarters of the loaf. We have an opportunity in
the Clear Skies Act to do great things for the environment and
the health of our families and I hope a majority of my
colleagues here and on the floor will support this bill.
Thank you.
Senator Voinovich. Senator Lautenberg.
Senator Lautenberg. Thank you. This is kind of a nostalgic
return home for me. I think I am probably the most senior
member here by virtue of the time that I spent on the
Environment Committee. I missed being here and I am pleased to
be able to serve on the committee. As I said to Senator Inhofe
when I came in, I came to make his day. That is my primary
mission.
Senator Inhofe. I would respond by saying we missed you
during your absence.
OPENING STATEMENT OF HON. FRANK LAUTENBERG,
U.S. SENATOR FROM THE STATE OF NEW JERSEY
Senator Lautenberg. Senator Inhofe and I have always had an
interesting exchange. I am pleased to be here and to welcome
our newer members. It gives me some encouragement because with
20 years of service in the U.S. Senate, I had to have some
junior members to kind of look down on if you don't mind.
I am anxious to get to work on the problems we are looking
at. I commend you, Mr. Chairman, for holding this hearing,
getting us focused on the task and I know how much you care
about it. The question for me is how much are we doing and how
much can we do? It has been said around here many times, and I
repeat it, that perfection is the enemy of the good and we will
never get a perfect piece of legislation. In my eyes, I know
that we have a tough fight.
I listened very carefully to Senator Carper and Senator
Voinovich's introduction to the hearing and those are very good
words and I know they are sincerely meant, to try to work
together and get something done that we can all agree upon, but
when I listened further, and I know that the job situation is
one we really have to pay attention to. I come from a working
class family. My father punched a time clock. When the mills
closed down in Patterson, New Jersey, the textile miles, silk
mills in particular, it hurt like the devil. Whatever we could
do to keep him working, we wanted to do.
Then I came out of the corporate world and I know that for
the corporate world the best thing is to be able to earn, to be
able to keep people working and keep America's economy
flourishing.
When we talk about things like heating with natural gas and
the implications, what is the alternative, I ask you, to have
to absorb all kinds of toxic emissions coming generously to New
Jersey from our western neighbors as opposed to using what we
can do to fuel our industries, where is American ingenuity.
When we talk about job loss and sending jobs overseas, where
are we in terms of saying to the automobile industry, hey, your
CAFE standards have to be improved. We know it is possible to
do it. So instead we blithely go along, more SUVs, bigger cars,
you burn it up, shoot it out there. I don't see why the choices
have to be made in the manner that they are being discussed
now.
My sister died from an asthma attack at a school board
meeting one night, she was a member of the school board and she
couldn't help herself at the moment of attack. She tried to get
to her car to plug in a little respirator that she carried and
she didn't make it. I have an 11-year-old grandson who
occasionally has to be rushed to the hospital emergency ward
because he has an asthma attack. He has had steroids and his
face is all blown up and it is a bloody unpleasant sight and a
painful thing to witness.
At what point do we say the most important thing are the
lives that we can save, or the health that we can protect? Why
is the focus exclusively on one side of the equation, the
economic side of the equation? I frankly don't get that. My
suggestion is we start with what we can do to improve life for
our citizens and then work to an end. I don't want to give up
any jobs, believe me. It is painful in New Jersey. We have seen
so many of the jobs we used to have being accomplished in other
places.
When I look at what is happening with asthma, in the last
15 years asthma rates have risen 250 percent. Today, over 7
million kids struggle with asthma and our hospitalized, miss
days from school, miss days of fun, miss days of normal living.
So I ask unanimous consent that a statement from our
Commissioner of Environmental Protection of New Jersey, Mr.
Brad Campbell be included in the record as if read.
Senator Voinovich. Without objection.
Senator Lautenberg. I also ask that my full statement which
I have deviated from be included in the record as if read.
[The prepared statement of Senator Lautenberg follows:]
Statement of Hon. Frank R. Lautenberg, U.S. Senator from the
State of New Jersey
Mr. Chairman:
I'm very happy to be back on the Environment & Public Works
Committee. Of course, if I hadn't left four years ago, I would be
sitting much closer to you than to this end of the dais, but such is
life!
Thank you for holding this hearing on the need for ``multi-
pollutant'' legislation. It's this sort of topic that made me want to
get back on the Committee.
Improving air quality is vital for my home State of New Jersey and
for the entire country. We have made great progress in the last few
decades, but today, over 150 million Americans continue to live in
areas that still have hazardous levels of air pollution.
I saw what asthma did to my sister, and I see what it does to one
of my 10 grandchildren. I want my children and grandchildren to live in
a country where they can breathe clean air.
I helped write the 1990 amendments to the Clean Air Act. Those
amendments established innovative ways to improve air quality and
protect public health. For instance, we created the ``cap and trade''
program for cutting sulfur dioxide emissions, which cause acid rain.
The ``cap and trade'' program has been a big success and serves as
a model for cutting the emissions of other air pollutants, such as
nitrogen oxides.
We've made progress when it comes to sulfur dioxide and nitrogen
oxides, but there's more we need to do, and we have to start getting
rid of mercury, too. It's well known that these three pollutants hurt
millions of Americans each year, causing thousands of hospitalizations,
emergency room visits, and more and more asthma.
As I see it, two of the fundamental questions the Committee needs
to address are as follows:
The first question is whether the Clean Air Act needs to be
replaced. I think the answer to that question is ``no.'' The Clean Air
Act provides the authority and flexibility we need; it just needs to be
enforced better.
The second question is whether we need to start cutting the
emissions of a fourth pollutant, carbon dioxide. I believe the answer
to that question is ``yes.''
Carbon dioxide is the primary greenhouse-gas pollutant that is
causing our atmosphere to trap heat. Scientists from around the world
have warned us that greenhouse gas emissions are causing our atmosphere
to heat up.
The longer we delay, the harder it's going to be to fix the
problems that are beginning to show up now.
Polar ice caps are melting. The oceans are getting warmer, which
may be causing harsher weather--like the hurricanes this past fall.
Rising sea levels could destroy coastal areas--such as those in New
Jersey. This isn't the kind of world I want to leave to my
grandchildren!
So, this is a profoundly important hearing today and I look forward
to the testimony of our witnesses, and to participating in this ongoing
discussion.
Thank you, Mr. Chairman.
Senator Voinovich. Thank you.
Senator DeMint.
OPENING STATEMENT OF HON. JIM DeMINT, U.S. SENATOR FROM THE
STATE OF SOUTH CAROLINA
Senator DeMint. Thank you. I appreciate the panelists being
here to testify.
It is my opinion at this point, still being a new member,
that the Clear Skies Act would be the most effective, clean air
proposal that we have ever enacted. I know we all want to
improve the quality of the air. I don't think anyone is
questioning anyone else's motivation. The question is how. I
certainly agree with the Ranking Member that we should not be
the lap dog of business and industry and I agree with my
colleague that our focus has to be on improving the quality of
life of our children and all our citizens. I agree that
business and industry should play by the rules.
I think it is important for us to recognize that the
current set of rules that we have is a quagmire of antiquated
regulations that are open to subjective and arbitrary
interpretation, that has clearly done more to promote lawsuits
than they have to clean up the air. Judges and lawyers are not
going to clean up our air.
In South Carolina, we have seen firsthand the uncertainty
of our regulatory system. In several of our counties I used to
represent in Congress where BMW is headquartered and Michelin,
an area of the State that is known for its clean water and
clean air, we have some counties now in nonattainment for
ozone. With this bill, our counties in developing a plan to
clean up the air could obtain a transitional designation that
would bring us into compliance by the year 2015. We could
accomplish the goal of cleaner air without hurting the economy.
I think this is just what my colleague was talking about.
I want to just encourage us again as just said not to make
the perfect the enemy of the good. This bill clearly is an
aggressive move toward cleaner air, toward setting standards,
but it is not just business and industry that are asking for
this. DEHEC in our State wants a clear set of regulations they
can interpret in a very scientific, standard way so the
industry, the power plants will know how to move ahead to clean
up our air in a responsible way. We must translate our good
intentions into a good regulatory system and we need clear
rules if we are going to have clear air.
Thank you.
Senator Voinovich. Senator Obama.
OPENING STATEMENT OF HON. BARACK OBAMA,
U.S. SENATOR FROM THE STATE OF ILLINOIS
Senator Obama. Thank you and other members of the
committee.
Like Senator DeMint, I am new to this committee and so
first of all, I appreciate all the hard work that has been done
by members on both sides of the aisle on this difficult issue.
I could hear from your introductory remarks, Mr. Chairman, that
there have been some frustrations in terms of all the work that
has been put in. So I would like to be part of some
constructive process to move legislation along that strikes the
right balance.
I should note that in my State, the two sides of the coin
that have been discussed are very visible. On the one hand,
Chicago--I think--ranks second in the country in terms of the
impact of power plant emissions and pollution. The metro east
and East St. Louis areas that I share with Senator Bond and
others, there are almost equally severe problems. I don't need
to repeat what Senator Lautenberg expressed so well and that is
the human cost of this pollution. My daughter who is 6 years
old has asthma as well. We have had those frightening moments
where she comes up to my wife and I and says, Daddy, I can't
breathe. Until you have rushed a daughter to the hospital in
the middle of the night and had them in the emergency room for
hours, I think it is hard to recognize the degree to which
there is a human cost to this stuff.
Having said that, we also have the Illinois coal industry
in southern Illinois that has been extremely hard hit, partly
because western coal is easier to extract because we have had
problems in terms of some of the existing regulatory regime and
how it impacts jobs and economic growth in the area of southern
Illinois. When you travel to these areas, these are some of the
poorest areas of the State, you are very sympathetic to the
fact that these communities need to get back on their feet.
My understanding is there are elements of this bill that
might make Illinois coal more competitive. That is something
that is of interest to me. Those economic issues don't just
relate to the coal industry directly. We have a large chemical
industry in Illinois and they use a lot of natural gas, those
issues that were raised about the rising cost of natural gas
impacts those industries as well. So these are complex issues.
There are people on this committee who have studied this much
more than I and am looking forward to learning.
I will make one last statement and that is that although
regulation has fallen into ill repute in recent years, part of
the reason the chart that was presented earlier shows enormous
improvement with respect to our air and our water has to do
with the fact that industry was regulated. Those gains were not
achieved voluntarily because there is always a cost to society
and those costs can be localized with particular industries and
particular communities and yet I think most of us feel pretty
proud even those people who may have resisted those initial
regulations feel good about the fact that our water is cleaner
and our air is easier to breathe.
So my hope is we approach these issues and there is a bill
here that reflects long and hard work on the part of others and
I want to keep an open mind, but I do think it is important
that this process not be driven by ideology but by science and
common sense and a recognition that we only have one
environment and sometimes it is hard to reverse some of the
mistakes that we make. So we need to be mindful, cautious and
humble about what we do.
Senator Voinovich. Thank you, Senator.
Senator Isakson.
OPENING STATEMENT OF HON. JOHNNY ISAKSON,
U.S. SENATOR FROM THE STATE OF GEORGIA
Senator Isakson. Thank you.
I noted in preparing for the hearing that I think this is
the 23rd hearing the committee has had since 1998 on multi-
emission standards. After listening to the opening statement, I
would like to have been at all of them. I am sure they were
entertaining. I know the operative word of the day certainly is
carbon. I have a lot to learn on those issues, but there are a
couple of issues I want to address briefly in the interest of
my State with regard to Clear Skies.
First of all, the positive impact that Clear Skies will
have on the State of Georgia, Georgia's sources would reduce
emissions of SO<INF>2</INF> by 89 percent, NOx by 77 percent,
and mercury by 76 percent. The annual savings in positive
impact in terms of health would be $5.3 billion and there would
be 1,500 less hospital visits a year. That is meaningful.
Second, I want to associate myself with the remarks of
Senator DeMint with regard to the transition areas designation.
That is a tremendously positive step for my State and many
others, to reach attainment but to not be unnecessarily
prohibited from reaching that through the overly oppressive
regulation that can sometimes take place.
I look forward to working with the committee and the
members here on the transition areas proposal because it is a
meaningful, positive step for many of us in the South to
address what has clearly been a problem.
Later I will get the chance to introduce a distinguished
mayor from my State. I appreciate the time that you have given
me. I would only ask unanimous consent that you allow the
remainder of my prepared statement to be submitted to the
record.
Senator Voinovich. Without objection.
[The prepared statement of Senator Isakson follows:]
Statement of Hon. Johnny Isakson, U.S. Senator from the State of
Georgia
Thank you Chairman Voinovich and Chairman Inhofe for holding this
hearing. While I and some of my colleagues on the Subcommittee may be
new to this Committee, the issue before us certainly isn't new to the
Committee. In fact, by my count, this is the 23rd hearing this
Committee has held on multi-emissions issues since 1998. I know that I
appreciate another opportunity to hear first hand how Clear Skies will
substantially reduce emissions of the three most harmful pollutants
from power generation, and will do so in a way that is much faster and
more efficient than under current law.
I think that when any of us look at a piece of legislation, the
first thing we ask is ``what is the impact on those whom I represent?''
The positive impact that Clear Skies will have on the State of Georgia
is very real. Georgia sources would reduce emissions of SO<INF>2</INF>
by 89 percent. NOx would be reduced by 77 percent, and Mercury by 76
percent by the year 2020. Georgians would realize health benefits
totaling $5.3 billion annually, and visit the hospital or emergency
rooms 1,500 less times. These are very tangible results.
I am especially interested in the benefits for Georgia in the
section regarding ``Transitional Areas''. Under Clear Skies, areas that
are projected to meet the ozone and fine particles standards by 2015 as
a result of Clear Skies would have legal deadline of 2015 for meeting
these standards (i.e., will have an attainment date of 2015). These
areas would be designated ``transitional'' areas, instead of ``non-
attainment'' or ``attainment,'' and would not have to adopt local
measures except as necessary to qualify for transitional status). They
would have reduced air quality planning obligations and would not have
to administer more complex programs. Clear Skies will allow many of
Georgia's counties to be designated ``transitional'', and ultimately in
attainment.
America has made much progress since 1970 and the passage of the
Clean Air Act, however we still face major air quality challenges in
many parts of the country. Clear Skies is the most important step we
can take to address these challenges. Clear Skies would make great
strides towards solving our remaining air quality problems in a way
that advances national energy security and promotes economic growth.
When fully implemented nationally, Clear Skies would prolong thousands
of lives each year, providing billions of dollars in economic benefits,
save millions of dollars in health care costs, and increase by millions
the number of people living in areas that meet our new, more stringent
health-based national air quality standards.
There is no better time for us to be considering multipollutant
legislation. Today we begin the process of bringing Clear Skies to the
floor of the Senate for a vote. Congress needs to act now so that we
may begin achieving emissions reductions and their related health
benefits sooner rather then later. I look forward to working with you
Mr. Chairman to pass Clear Skies, and improve our nation's air quality.
Thank you.
Senator Voinovich. Thank the members of the Senate that are
here today and we will now call our first witness panel, Bob
Young, John Paul and Beverly Gard.
Before we get started, I would like to let everyone know
that we had a change in the witness list. Mayor Don Plusquellic
from the city of Akron in my home State of Ohio, also President
of the U.S. Conference of Mayors, is not able to be here today
due to illness. I would really like to thank Augusta, Georgia
Mayor Bob Young who is also chairman of the Conference Energy
Committee, for coming here on such short notice to testify
before this committee. I understand Senator Isakson, you would
like to introduce Mayor Young?
Senator Isakson. With your permission, I would.
Senator Voinovich. Without objection.
Senator Isakson. It is really a privilege for me to
introduce an old friend, a former TV personality, news
anchorman as you can tell from the face and the hair, he looks
the part, but now the mayor in his second term of the great
city of Augusta, GA and Richmond County and the mayor of that
consolidated government which is among other things the home of
the Augusta National Golf Club and the Masters Golf Tournament.
Mayor Young is a member of the Advisory Council of the U.S.
Conference of Mayors and chairs the Conference's Energy
Committee and is a past chair of the Standing Committee on the
Environment.
He is a very active mayor, he is a very progressive mayor.
In my years in the State Legislature where I worked with Bob
and my years since I have been in Congress on the
Transportation Committee in the House where I worked with Bob,
I have known him to be a very conscientious and very hard-
working person, particularly interested with regard to the
environment and its impact. Although I may be reaching here
because nobody has told me this, I would imagine the
transitional areas provision in terms of the Savannah River
area would be of a positive impact in terms of Clear Skies.
It is a real pleasure for me to have the opportunity to
introduce a great mayor and a great citizen of the State of
Georgia, Bob Young.
Thank you, Mr. Chairman.
Senator Voinovich. Mayor Young, Mr. Paul and Senator Gard,
I would like to make clear that your testimony is limited to 5
minutes and that you should understand that your statement will
be made a part of this record.
STATEMENT OF HON. BOB YOUNG, MAYOR, CITY OF AUGUSTA, GA, ON
BEHALF OF U.S. CONFERENCE OF MAYORS
Mayor Young. Thank you, Mr. Chairman. Senator Isakson,
thank you for that generous introduction.
On behalf of the U.S. Conference of Mayors' President,
Akron Mayor Don Plusquellic, I offer his apologies for not
being with you today. As you know, he was supposed to be here
to testify but he fell ill yesterday of a severe respiratory
ailment. I offer his sincerest apologies to you for his not
being able to make it to this hearing. I was described earlier
today as his stunt double for this hearing.
The U.S. Conference of Mayors is the official, non-partisan
organization that represents cities throughout the United
States through their chief elected official, the mayor. First
of all, I would like to thank Senator Voinovich not only for
his invitation to speak before you today but also for joining
with us last week during the Conference of Mayors' winter
meeting here in Washington. Your commitment, Senator, to issues
such as community development block grant funding and unfunded
mandates is greatly appreciated by the mayors of this Nation.
I come before you today not as an expert on clean air
policy, not as a scientist, but as a mayor. This means that I
am responsible for a wide variety of activities including
keeping my citizens safe, keeping their surrounding environment
clean and attractive, making sure the roads are maintained and
every once in a while in Augusta, GA, even seeing that snow
gets ploughed. It also means doing what I can to keep and
attract new jobs to our community. When my job is boiled down,
I guess you can say that I am responsible for making my city a
place that is desirable for both people and business to
flourish. Every mayor strives to create a community that has
healthy citizens with a healthy economy. I think with some
common sense, you can have both. That is why I am here today.
In order to remain competitive, this Nation needs a steady,
reliable and inexpensive source of energy. However, we also
need clean and healthy air. Depending upon the type of
business, a number of conditions influence their decision to
locate or expand in a community. Issues such as work force
availability, access to transportation hubs and of course the
cost of electricity are factors in their decisionmaking
process.
Besides the cost and reliability of electricity, another
factor that goes into a business location or expansion decision
is a community's attainment status. Many communities throughout
the Nation have been designated as nonattainment areas for
either ozone or particulate matter. Augusta was originally
supposed to be designated in nonattainment for ozone but when
the final numbers came out, we were fortunately not included.
Many of my other mayoral colleagues though were not as lucky.
When it appeared that my city was going to be designated as
nonattainment for ozone, we volunteered for EPA's early action
compact. This program allows cities, counties and States to go
through a series of voluntary measures to reduce air pollution
that causes nonattainment. I want you to know that even though
we were fortunate not to get designated, we are still going
through this voluntary program to demonstrate our commitment to
clean air. This is what we are doing in Augusta.
The reason we are committed to clean air is not only
because of the health of our citizens but it is a good business
decision as well. Many businesses won't outright admit it but
privately they have said that when making a decision to locate
or expand in an area, one of the things they do is find out
that community's attainment status. If a community is not in
attainment, businesses know to get the necessary air permits
might be difficult and sometimes it just makes sense to seek
out another community to build in.
Both the cost of electricity and a city's attainment status
put many communities at a competitive disadvantage to attract
businesses from other parts of the United States or even from
elsewhere in the world. These factors can have a major impact
on jobs and job creation. However, the mayors of this Nation
don't want to sacrifice public health for cheap electricity. We
are looking for a fair and balanced approach that keeps our air
clean while keeping electric costs down, and also keeps our
citizens working. We are looking for common sense solutions to
help us meet our attainment requirements.
As I mentioned before, many communities have been
designated in nonattainment for particulate matter or ozone or
even both. These communities and States they are located in are
required by the Environmental Protection Agency to meet
attainment standards between 2008 and 2015. Programs such as
CMAQ, the Congestion Mitigation Air Quality Program, as well as
the off-road diesel rules have been developed to assist us with
our efforts. These programs should be maintained or in the case
of CMAQ, increased to further those efforts.
However, these programs are not enough. For many
nonattainment communities, 40 percent of their air pollution
comes from coal-fired utilities. That is a major source of
pollution. We need a common sense solution that requires these
utilities to install pollution control equipment in a manner
that is timely and cost efficient. The Conference of Mayors
passed a policy resolution in 2003 calling on the Federal
Government to address this problem. Our policy asks that the
Federal Government set national air emission caps under a
multi-pollutant plan at levels strong enough to protect public
health and the environment by substantively assisting cities in
our efforts to attain the national ambient air quality
standards.
We support a comprehensive and synchronized multi-
pollutant, market-based program to reduce regulatory costs to
maintain reliable energy at a reasonable cost for consumers and
to provide regulatory certainty to the electric power sector.
We encourage the Congress to pass national legislation which
will meet the Conference of Mayors' goals by requiring power
plants to reduce their emissions of sulfur dioxide, nitrogen
oxides and mercury by an average of 70 percent from 2000 levels
by 2020 under a proven, market-based cap and trade program.
It is my understanding, Senator, that you have introduced
legislation that reflects many of the concerns of the mayors.
We appreciate the opportunity to present before you today and I
will be available to answer any questions the panel may have
later in this hearing.
Thank you.
Senator Voinovich. Thank you, Mayor Young.
Our next panelist is Mr. Paul, supervisor of the Regional
Air Pollution Control Agency in the Montgomery County, Dayton
area. We are glad to have you here with us today.
STATEMENT OF JOHN A. PAUL, SUPERVISOR, REGIONAL AIR POLLUTION
CONTROL AGENCY, ON BEHALF OF STAPPA/ALAPCO
Mr. Paul. Thank you. Good morning.
My name is John Paul and I am the supervisor of the
Regional Air Pollution Control Agency, a six county, local
agency located in Dayton, OH. I am testifying today on behalf
of STAPPA and ALAPCO, the National Associations of air quality
agencies in 53 States and territories in more than 165
metropolitan areas across the country. I currently serve as the
vice president of ALAPCO and co-chair of the STAPPA/ALAPCO
Energy Committee. We are pleased to have this opportunity to
provide our perspectives on the need for legislation to control
multiple emissions from electric utilities.
Over the past 30 years, our country has made substantial
progress in reducing air pollution while at the same time
experiencing strong economic growth. However, our Nation
continues to face significant public health and environmental
problems as a result of emissions into the air. Each year, air
pollution causes tens of thousands of premature deaths and
innumerable health consequences. In the past year, EPA
designated as nonattainment nearly 500 counties for the 8-hour
ozone standard and 225 counties for the fine particulate
standard. In addition, mercury emissions have resulted in the
issuance of fish consumption advisories in 45 States. Air
pollution also contributes to visibility impairment,
eutrophication of waterways and acid rain.
Electric utilities are by far the largest remaining
stationary source of air pollution in the United States. They
are on the order of magnitude greater than the second largest
source which is refineries which is an order of magnitude
greater than anything else. According to EPA and others, power
plant emissions each year are responsible for over 20,000
premature deaths. Additionally, according to a recent study by
the Clean Air Task Force, Power plant emissions annually cause
over 38,000 heart attacks, more than 3 million lost work days
and in excess of half a million asthma attacks.
The magnitude of emissions from power plants and the
serious public health and welfare implications these emissions
have make controlling utilities a top priority. This is
especially important in light of the fact that today, nearly
three-quarters of all utility boilers are over 30 years old and
continue to operate without modern pollution control
technology.
STAPPA and ALAPCO endorse the concept of a comprehensive,
national strategy for reducing emissions of multiple pollutants
from electric utilities and have adopted a set of principles
which I have attached to my written statement outlining what we
believe should serve as the foundation of a viable strategy for
power plants.
We call for expeditious schedules that will allow us to
reduce emissions consistent with the deadlines by which States
and localities are required to meet health-based air quality
standards. We firmly believe that such an approach should
supplement but not supplant the existing Clean Air Act. In
addition, we recommend that the most protective national
emission caps feasible be set at levels that reflect
installation of the best available controls on all existing
units nationwide with each existing power plant required to
meet a minimum level of control by the final compliance
deadline. Very significantly, States and localities must retain
their authority to adopt and implement measures that are more
stringent than those of the Federal Government.
We used our adopted principles to evaluate S. 1844,
introduced as the chairman's mark in November 2003. After
careful study, we concluded that the proposal fails on every
one of our association's core principles. The utility
compliance deadlines are too protracted. It will prevent the
expeditious attainment of air quality based standards. The caps
are simply not protective enough and there is no minimal level
of control required by each existing power plant.
Additionally, we have very serious concerns with the fact
that this proposal strips away many of our most essential Clean
Air Act tools and authorities. In fact, that is probably our
most significant concern. Accordingly, STAPPA and ALAPCO cannot
support this proposal. Further, based on our preliminary review
of S. 131, the Clear Skies Act of 2005 introduced just this
week, it appears that our concerns have not been resolved.
Although we would prefer that a multi-pollutant approach be
established through legislation rather than regulation, given
the serious deficiencies of this legislative proposal and S.
131, we believe that continued implementation of the Clean Air
Act will provide far greater and more certain and more timely
protection of public health and the environment.
In my written testimony, I have elaborated on each of our
key concerns and will be happy to address them in more detail.
On behalf of STAPPA and ALAPCO, I want to thank you for
this opportunity to present our associations' views on this
very important issue. We look forward to working with you in
the days to come.
Thank you.
Senator Voinovich. Thank you, Mr. Paul.
Our next witness is Senator Beverly Gard. Senator, we are
very happy to hear you. Senator Gard is chairman of the Energy
and Environment Affairs Committee, Indiana State Senate.
STATEMENT OF HON. BEVERLY GARD, CHAIR, ENERGY AND ENVIRONMENT
AFFAIRS COMMITTEE, INDIANA STATE SENATE
Ms. Gard. Thank you.
Mr. Chairman and members of the subcommittee, thank you for
the opportunity to testify. My name is Beverly Gard and I have
served as a member of the Indiana State Senate for 16 years. I
am chairman of the Senate Energy and Environmental Affairs
Committee and the Public Health Subcommittee. I serve on the
Environment Committee of the National Conference of State
Legislators and previously served as the committee chairman.
Previously I worked as a biochemist in the health care
industry.
My approach has been to balance the need for a cleaner
environment with our responsibility to promote economic growth
and jobs. Adoption of multi-emission legislation promotes that
balance. In Indiana, approximately 95 percent of the
electricity generated comes from coal-fired power plants
burning over 48 million tons of coal a year. Since the Clean
Air Act amendments of 1990, sulfur dioxide emissions are down
45 percent, NOx emissions have been reduced by roughly 70
percent. Over $3 billion has been spent to reduce emissions
since 1990 and it is estimated and additional $3 billion will
be spent to comply with new pending EPA regulations.
If the Clean Air has worked, why do we need multi-emissions
legislation? The answer is litigation and uncertainty. Current
law now includes multiple regulatory approaches to reduce the
same emissions, despite the development of new regulations by
EPA to control NOx, sulfur dioxide and mercury, we anticipate a
protracted court battle before any final implementation. This
creates uncertainty for the States and utilities with States
increasingly tempted to point up fingers when the secure
emissions reductions from outside their economic and geographic
boundaries.
Using the NOx cap set in Clear Skies, Indiana utility NOx
emissions would be reduced by 60 percent in Phase 1 and 70
percent in Phase 2 based on actual 2003 levels. Using EPA's
projections, all 24 counties in Indiana out of attainment now
should be in attainment for ozone by the first phase in 2010.
Under the new fine particle nonattainment designation of
January 2005, 14 full counties and 5 partial counties in
Indiana were labeled as nonattainment. With the sulfur dioxide
cap set in Clear Skies, Indiana utilities' sulfur dioxide
emissions would be reduced by 69 percent in Phase 1 and 79
percent in Phase 2, again based on actual 2003 levels. Using
EPA's projections for the impact of Clear Skies, all counties
in Indiana should be in attainment for fine particles by the
first phase in 2010.
Another benefit that a multi-emissions bill will provide is
mercury reductions enabling utilities to integrate all three
emission reductions required under Clear Skies and can achieve
even more significant reductions in cost savings than we
experienced from the acid rain title in the 1990 Clean Air Act
amendments which minimizes the financial impact to consumers.
Much of the debate around multi-emissions focuses on how much
and how fast. Reducing mercury is important, but there is also
considerable debate about the role of utility emissions in
reducing mercury levels in fish. Mercury is transported far and
wide in counties burning coal with no controls and also
contributes significantly to mercury levels in the United
States. A phased-in reduction over reasonable time periods will
provide the appropriate time needed to build scrubbers, SCRs
and particulate controls which will help to achieve a large
portion of mercury reductions. This approach also provides the
time needed to test new mercury specific controls that are
necessary to meet the more stringent Phase 2 cap. These
reductions are not cost free. We need to ensure that caps are
achievable without breaking the bank.
I ask you today to work to make multi-emissions legislation
achievable and balanced. Do not disadvantage Indiana coal or
the economies that thrive on that industry but I also urge you
to enact legislation now. Even today, States must begin the
rigorous and time consuming process of crafting State
implementation plans even without a final EPA rule. Only
Congress can take the guesswork out of this public policy issue
by passing legislation that sets us on a schedule which will
result in steep reductions in power plant emissions while
minimizing the cost to the consumer. Clear Skies meets that
goal. Delay only brings with it continued emissions and
escalating costs.
I will close by asking that you work together irrespective
of political party or geography to pass this vitally important
piece of legislation. I look forward to working with you to
help make this legislation a reality.
Thank you.
Senator Voinovich. Thank you, Senator Gard.
We appreciate our witnesses being here this morning. Our
first round will be 5 minutes for each Senator.
Mayor Young, one of the complaints about Clear Skies is
that it simplifies and modernizes the Clean Air Act, especially
some of its highly litigated and uncertain provisions. In your
recent State of the City address, you noted the importance of
brownfields redevelopment to Augusta. The Conference of Mayors
reported in a 2001 study, some cities have found that the NSR
permit process burdens industry with additional costs,
uncertain project approval time lines and therefore may not
have an effect on business decisions concerning expansion or
location in urban areas are designated nonattainment. This
situation, in conjunction with the costs involved in cleaning
up brownfield sites makes it potentially difficult to attract
manufacturing industries to cities seeking to incorporate them
in the redevelopment mix.
I know that urban development remains an important
objective for both the economy and ecology of our cities. Does
it then make sense to replace our current litigate first, ask
questions later approach with a workable multi-emissions
trading program that provides certainty to businesses and
reduces environmental costs?
Mayor Young. Mr. Chairman, you are absolutely right. The
Conference of Mayors supports the multi-pollutant approach as
embodied in the bill. One thing that we have to consider is it
is not all about bringing new jobs and new businesses to your
community because 85 percent of the new jobs are going to be
created by businesses already in your community. They have to
be able to expand, be able to grow, be able to get the permits
they need to produce more. We believe this legislation will get
us there.
Senator Voinovich. I am glad you raised that issue because
I know one of the problems I had when I became Governor was
there were a lot of businesses that were talking about
expanding and basically said to me, no way, Jose, am I going to
do it in nonattainment because I don't know what the costs are
going to be to my business. If you looked at the chart I put on
the board, there are a lot of communities in this country today
that without legislation at this time that are going to have
wait until their States come up with a State implementation
plan which will be 2008. So we have this long period of
uncertainty where everybody is going to be in limbo in terms of
what they should not do.
Senator Gard, as we heard today, some claim that the
existing Clean Air Act does more than Clear Skies. Some argue
that the rules proposed by the Administration, the Clean Air
Interstate Rule and the Mercury Rule are better than Clear
Skies. How do you respond to that? I know in his testimony, Mr.
Paul said, Any multi-pollutant strategy must ensure that
regions, States and locations retain their authority to adopt
or implement measures that are more stringent than those of the
Federal Government. I agree with Mr. Paul on that point. I want
to underscore that in the bill nothing in this section shall
preclude or deny the right of any State or political
subdivision to adopt or to enforce any regulation, requirement,
limitation. How do you react to Mr. Paul's claim that this
doesn't do more than what we already have on the books?
Ms. Gard. Right now the legislation we have on the books
certainly served the purpose during the early years of the Act,
but as demographs change, as States' priorities change and
technology changes, I think we need to have the regulatory
certainty that we would see in Clear Skies. Over the last few
years, there has been protracted litigation as you well know
dealing with implementation of clean air regulations.
We need to move on with actually doing something that will
provide for cleaner air without going through protracted
litigation. In Indiana we have a significant loss of
manufacturing jobs, over 150,000 manufacturing jobs in the last
3 years. We need to be competitive in attracting those new jobs
to Indiana. We need to make sure that the coal industry remains
a vital part of our economy in Indiana while having the
certainty of regulation and meeting those goals that Clear
Skies lays out which I think will provide for cleaner air and
preserve the economies in our State.
Senator Voinovich. Mr. Paul, you work for an organization
that is a regional enforcement agency. One of the things that
perplexes me is that the U.S. Conference of Mayors, the
National Association of Counties, the National Conference of
Black Mayors and many Governors have all passed resolutions
supporting the reduction goals and timelines in Clear Skies. It
seems to me that your organization's point of view on this
legislation is contrary to the elected political officials in
your respective regions. How do you respond to that?
Mr. Paul. Mr. Chairman, because we represent all the States
and all the local air pollution control agencies, the directors
of those agencies, we recognized early on when different
proposals were coming out that it would be difficult for us to
respond to each proposal and take positions, so we decided to
adopt principles and then we could compare those principles to
any piece of legislation that comes out. That is what we did. I
personally am very high on accountability and I recognize the
accountability that we have to the legislature. I see that our
goal is to let you know what we feel would be the implications
of any legislation and that is what we have tried to do here.
Senator Voinovich. Senator Carper?
Senator Carper. It is difficult for one air regulator or
one mayor or a Governor or a member of the Democratic Caucus or
the Republican Caucus to speak for all of us. We have different
views and I really applaud the idea of trying to lay out the
principles. In fact, that is probably good advice for us, to
say what are the principles we should subscribe to as we
attempt to put together a bipartisan clean air bill.
You mentioned the principles that the organizations had
developed and felt we should consider as we craft legislation.
I understood you to say that Clear Skies fell short on most if
not all of those principles. Senator Jeffords has legislation
that is an alternative to Clear Skies. I, along with several of
my colleagues, alternative legislation. I have no idea if you
are familiar with either of our proposals but first of all, can
you sort of quickly summarize the basic principles that you
think should underlie the work we do in this area and two, if
Clear Skies falls short on most or all of those, can you give
us any thoughts as to whether or not Senator Jeffords or our
bipartisan proposal might come closer to the mark?
Mr. Paul. Attached to my testimony are our principles. Also
attached to my testimony is a chart labeled Attachment No. 3
where we took each of the principles that we are aware of right
now, put the caps, put in deadlines and compared those to how
our principles would play out. The big concept that we are
after here is that we have these 1,166 coal-fired power plants
operating in the United States; 70 percent are 30 years old or
older. They are facing decision points of where they either
need to phase these out and build newer, more efficient, better
controlled boilers or they need to renovate those boilers and
we think at the same time add air pollution control.
It has always been our position that when you spend money
on a source, when you install it or when you modify it, that is
the time to put on the best available control technology. We
believe this can be done in an expeditious manner. We believe
that the deadlines in the Clean Air Act for meeting the health-
based standards are important, that there are lives lost every
year those are delayed. So our principles call for stringent
caps based on best available control technology and stringent
timelines to meet those.
Senator Carper. Any early thoughts on how Senator Jeffords'
proposal or my bipartisan proposal might fare when matched to
those principles?
Mr. Paul. Senator Jeffords' proposal comes the closest to
ours. Yours also comes very close. It is interesting, in some
the deadlines fit better with ours and some of the caps fit
better with ours. Certainly one of the big concerns we have
that both of you address, you address it some Senator Jeffords
completely, is the stripping away of the new source review
regulations, the 126 petitions, the tools that we have if this
legislation doesn't go far enough for a particular State or
locality. It is a mixture. Obviously both of yours are much
closer to ours.
Senator Carper. Thank you. I want to quote an esteemed
climatologist whose name is Steven Stills. He once wrote,
``Something is happening here. Just what it is ain't exactly
clear. I said earlier in my opening statement there was a time
when I didn't put much credence to this notion of global
warming. As time goes by, I am more convinced that something is
happening here and we need to do something about it.
In my old job dealing with businesses, I talked to them
about things they didn't like. I did a lot of customer calls. I
still do them with major employers in our State and smaller
ones as well. They told me among the things they didn't like
were high taxes, elected or appointed officials who wouldn't
listen to them, didn't like rigid regulations, didn't like
uncertainty. They really didn't like uncertainty. One of the
virtues of our developing a bill that not only addresses sulfur
dioxide, nitrogen oxide, mercury and carbon is it provides a
measure of certainty. If you look at the utilities and the
folks in the energy business supporting the approach some of us
have embraced, one of the reasons they like it is because of
the certainty that it provides.
Let me ask each of you to comment on that certainty and
whether you think that is a virtue as well. Mayor Young?
Mayor Young. From the standpoint of the U.S. Conference of
Mayors, a bipartisan organization, we reached our resolution by
consensus of Democratic and Republican mayors, I would say that
we have not taken a position with respect to carbon-based
pollution. Although the mayors themselves have expressed
concern about the change in the climate as a result and many
mayors have established for themselves 10 percent goals of
reducing greenhouse emissions in their communities, we would
say from our perspective by addressing the NOx, the SOx and the
mercury in a comprehensive way, that is a great step forward
for our communities.
One issue we always have to look at is affordability. Those
of us who are mayors in urban centers typically represent
populations of high poverty, 28 percent of the people who live
in the city of Augusta, 28 percent of the 200,000 people who
live there are categorized at the poverty level or below. We
have to be sensitive as we look at policy as to what cost is
something going to have to them. We provide them with indigent
health care, so we are dealing with the health effects on one
side. Likewise many we are subsidizing through public housing
or in other ways and they have energy costs they have to deal
with.
With respect to what is on the table today, it works for
us. You add carbon to the mix, we haven't taken a position on
that.
Senator Voinovich. Senator Carper, I think we should move
on and if these witnesses want to comment later on about your
question, we can do that.
Senator Inhofe.
Senator Inhofe. I often say to my colleagues in the Senate,
if you want a tough job, be a mayor. Senator Voinovich and I,
25 years ago, were both mayors and we know when you are a
mayor, there is no place to hide, you are closer to the people.
I appreciate what you have done.
We had an excellent witness from Ohio, the Catholic
Charities, Tom Mullen. He testified before us and the chairman
mentioned him in his opening remarks. He said, ``The conversion
to natural gas from coal would have a devastating effect on the
people of Ohio and our country, particularly the poor and the
elderly,'' which he is in the business of protecting. ``The
most vulnerable of our people economically would see their
electric costs in Ohio soar to $494 million by 2010 and to $1.5
billion in 2020.'' That is in Ohio. Have you done any
calculation as to the economic damage done to the poor in your
State?
Mayor Young. Senator, not in our community specifically and
I haven't seen any national figures as it relates to cities but
I think when we look at the cost of what our social programs,
what percentage of our local budgets, our city budgets we are
paying to support social services to our citizens, we can see
that any tick anywhere in any service we are providing is going
to one, hurt us and it is going to hurt those consumers at the
lowest rung of the ladder. That is something we have to be
sensitive to in every policy decision we make.
Senator Inhofe. Senator Gard, what about your State? It is
pretty close by and has a lot of things in common with Ohio?
Ms. Gard. I hear from constituents on a regular basis about
concern over the rising natural gas prices. As you know, 95
percent of Indiana's electricity is generated through coal-
fired generating facilities. We have the ninth lowest electric
rates in the country. Those people using natural gas would very
much like to be able to see the economic advantage we would
have I think approaching a multi-emissions legislation such as
you propose in Clear Skies. It would have economic value,
certainly have regulatory certainty and provide our industries
could remain competitive.
Senator Inhofe. Mr. Paul, in your written testimony, saying
this in a very friendly way because I don't have the background
that would enable me to determine whether or not this is
possible, you say you would propose an interim emissions cap of
15 to 20 tons per year of mercury to be achieved by 2008. We
are talking about 3 years out, close to a 60 to 70 percent
reduction in that short period of time. Do you really believe
this is sufficient time when you consider you would have to
enact legislation and regulations, obtain financial approval
such as bond approvals, required State permits, design and
install equipment, go through all these steps. You mentioned
over 1,100 coal-fired power plants that would be affected by
this and all of that in 3 years. How can it be done
Mr. Paul. We put in interim caps to make sure that progress
is encouraged and progress is made toward the ultimate caps. We
recognize that the current MAC rule, the current regulations in
the Clean Air Act there are provisions for extensions should
they be necessary. Our goal is to make sure there is good
progress.
Senator Inhofe. So these are not hard and fast goals that
must be achieved or you are out of business, it closes down?
Mr. Paul. That is correct.
Senator Inhofe. Give me a general idea on what type of
option they would have at the time they find it is impossible
for them to comply? You said there are some provisions that
allow an exemption from these deadlines?
Mr. Paul. There are provisions within the Act that allow
for an extension. The Administrator can issue an extension for
1 year. Then there are provisions in the Act for the President
of the United States also to provide 2-year extensions under
the MAC rules, under Section 112 of the Clean Air Act.
Senator Inhofe. I wonder if people, given impossible goals,
which I would believe they would be and I think probably most
would agree, if that would be as effective as having an
achievable goal that is further out. That doesn't require a
response.
Senator Gard, one of the fundamental aspects of Clear Skies
is not simply that it caps emissions at 70 percent but that it
establishes a trading system of allowances based on the Acid
Rain Program. My understanding is that there are virtually no
violations of this program. I would ask has that been your
experience in Indiana and do you believe Clear Skies would work
the same way for SOx and NOx and mercury as it did in the Acid
Rain Program?
Ms. Gard. Yes, I do. I think the Acid Rain Program has
certainly shown, the cap and trade program has shown that it
works. There are quantifiable results. I think the cap and
trade program would provide the kind of incentives that
industry and utilities need to make those sorts of financial
commitments to reduce their emissions and provide economic
incentives to do so.
Senator Inhofe. The last question would be for each one of
you to respond. The Clear Skies initiative as we said before is
the most aggressive that any President has ever come forth with
in reducing pollutants. There are many who want to get into the
debate which we have been in many times before on
CO<INF>2</INF>. I would ask the question, would we be better
off to pass nothing and not have the caps and not have the
aggressive reduction in pollutants on NOx, SOx and mercury if
we did not include CO<INF>2</INF> as a pollutant? Just yes or
no, do you think we would be better off to pass nothing at all
or to pass the Clear Skies bill as it is written?
Mayor Young. Again, the U.S. Conference of Mayors has not
taken a position with respect to CO<INF>2</INF>.
Senator Inhofe. Have they taken a position as far as Clear
Skies is concerned?
Mayor Young. We have taken a position with respect to the
principles embodied in Clear Skies but not to that specific
piece of legislation. We support the multi-pollutant, market-
based approach with cap and trade.
Senator Inhofe. Mr. Paul.
Mr. Paul. STAPPA and ALAPCO also have not taken a position
with regard to CO<INF>2</INF>, but we do believe that
enforcement of the Clean Air Act as written now with CARE, the
Utility MAC, would be preferable to Clear Skies.
Senator Inhofe. Senator Gard.
Ms. Gard. Clear Skies provides the kind of guidance that we
need to meet those attainment standards that many of our
counties are under. With respect to carbon, carbon is not a
pollutant that has quantifiable health standards such as the
pollutants that are addressed in Clear Skies and Clear Skies
needs to focus on the three pollutants.
Senator Voinovich. Senator Jeffords.
Senator Jeffords. As you know, the Clean Air Act has
specific deadlines for areas to achieve attainment of the
national health-based air quality standards. For every year we
delay that attainment, it causes or contributes to an
additional 25,000 premature deaths from fine particles, more
than 4,000 premature deaths from ozone exposure, thousands of
heart attacks, hundreds of thousands of asthma attacks and
millions of lost work days. Do you believe that we should amend
the Clean Air Act, delay the attainment deadlines in existing
law and suffer these consequences?
Mayor Young. First, let me thank you for your leadership on
this issue. You have been a very active player and from the
perspective of the mayors, we appreciate your engagement. That
is a loaded question, there is no doubt. From our point of
view, I don't see that things are going to be delayed from the
information presented to us, particularly people from the
industry tell me that with a bill like Clear Skies they feel
they can meet their attainment levels or compliance levels
fairly early, fairly quickly, not waiting until 2018 to do the
work.
Probably the best answer I could give you would be we don't
feel, from our perspective, that anything is being sacrificed
in meeting the clean air standards under the Clean Air Act with
the implementation of a bill that embodies the principles of
Clear Skies.
Senator Jeffords. Mr. Paul?
Mr. Paul. I think it is a fair question and I think one
that you need to consider. Certainly there will be costs to
more timely implementation and more timely compliance but there
are also costs to delayed compliance and I am glad it is you,
the Senate, that has to weigh those and not necessarily us. We
feel our obligation is to tell you what we think is achievable
and what we think are the implications of that. I think you are
correct when you identify the health implications of delay and
that is why we advise tighter caps and more timely caps.
Ms. Gard. I think now that litigation is delaying
compliance with clean air standards, we need to make sure that
we have goals that are achievable and also goals that are
affordable. It is not going to make a whole lot of sense to
clean up our environment and not have jobs and health care
insurance for our citizens. I think Clear Skies provides the
kind of timeframe that is achievable, has quantifiable results
and is the kind of tool that we, as States, need to achieve
those goals. I think you will see the results are going to be
far greater than we have seen under some of the current
policies.
Senator Jeffords. I would note all the versions of the
Clean Air Act allows areas to delay attainment.
A couple of years ago, we had a prestigious panel of
scientists tell this committee that increasing greenhouse gas
emissions increases the risk associated with global warming.
According to EPA modeling, the Clear Skies approach will result
in a 13 percent increase of an additional 425 million tons in
carbon dioxide emissions as compared with the base case. Do you
think it makes sense for Congress to ignore the contribution of
power plants to global warming?
Mayor Young. Here again I am not trying to dodge your
question but the Conference has not taken any position with
respect to legislation that would include CO<INF>2</INF> as a
pollutant. Here again the mayors are concerned about the
addition of CO<INF>2</INF> and its effect on the environment,
global warming and we would welcome engagement in any
discussion with respect to dealing with CO<INF>2</INF>
emissions.
Mr. Paul. We do feel it should be addressed. Certainly if I
were a CEO of a utility, going back to the issue of certainty,
I would want it addressed. To the extent that one of the
purposes of this bill is to provide certainty, it should
address CO<INF>2</INF> emissions.
Ms. Gard. I think the science of global warming continues
to be debatable with a number of questions. Greenhouse gases do
need to be addressed, but I would suggest they need to be
addressed in a different forum and move forward with three
pollutant legislation which addresses emissions that have
quantifiable health problems, address the carbon issue in
another forum.
Senator Jeffords. How would you advise this committee to
determine whether the value of existing provisions of the Clean
Air Act are worth more in health and environmental benefits
than any possible replacement provisions? What kind of
information would you use? For example, the National Academy of
Sciences told us about 2 weeks ago that it is unlikely that
Clear Skies would result in emission limits at individual
sources that are tighter than those achieved when NSR is
triggered at the same source.
Mayor Young. As a policymaker, I would have to weigh the
benefits to health, weigh the costs to the consumer in the end,
weigh what effect it would have on the attainment, my
community's ability to get into attainment as quickly as
possible and in a manner reasonable for the community. I would
also have to look at the effect of jobs in my community, would
it have a positive or negative effect on the economy. If we are
in an environment where we have different States making
different decisions that affect communities across the border
which is the situation we are in, our environmental issues stem
from a coal-fired plant across the Savannah River in South
Carolina. Even though we have our early action plan, there is
nothing we can do as a community or the State environmental
regulators in Georgia can do to impact what goes on at a coal-
fired plant in South Carolina. So to us, from my perspective as
the Mayor of Augusta and as the energy chairman representing
the U.S. Conference of Mayors here today, it appears the multi-
pollutant approach under Clear Skies that gives us that 70
percent reduction in the three pollutants at the same time
keeping energy affordable, jobs in the community and improving
the health benefits to us is the way to go at this time.
Senator Voinovich. I would appreciate it if the witnesses
would try and make it as quick as you possibly can. We have
exceeded our time.
Mr. Paul. I would remind myself if I were you that a clean
economy is a healthy economy and I would look for the best
controls, I would look at the National Academy of Science
report and use that as evidence that indeed we can do better.
Ms. Gard. The health and environmental benefits cannot be
separated from the economic and the cost benefits as well. As
long as we continue to debate and litigate and not move forward
with well defined standards, the breathing public is going to
continue to be at risk. I suggest we move forward with three
pollutant legislation with achievable, affordable goals.
Senator Voinovich. Senator Lautenberg?
Senator Lautenberg. Thank you all for your testimony
because one thing happens as this Senator listens, it is very
clear that there are those of us who are concerned about the
health effects, about what happens with global warming and are
so concerned about it only because we read about what is
happening in Antarctica. I have been to the South Pole 5 years
ago and the diminution of the ice caps there, the reduction of
the availability of fresh water, 70 percent of the fresh water
available in this world was stored in the ice in Antarctica.
Therefore, Mayor and each one of you, I say this with all due
respect, you say the organization you are representing here
today doesn't take a position on carbon dioxide, how do you
feel about it personally? You are a mayor, you are concerned
about the well being of your citizens. Do you think it is
something we can turn a blind eye to and let it go?
Mayor Young. No, and when I say we don't take a position
with respect to it, I mean in the context of this legislation,
we have not taken a position. Certainly mayors across this
country are concerned about the effects of greenhouse emissions
on our environment. We are very concerned about it and I think
at the appropriate time perhaps Congress will address it not
just as it pertains to one segment of our economy, not just the
energy industry, but our country as a whole.
Senator Lautenberg. But since the energy industry is the
biggest supplier of toxic emission, wouldn't this be an
appropriate time to say, this is what my organization says but
I really think it is a poor idea not to include it in these
discussions that we are having because again, the threats are
enormous. Do we want to wind up like Australia where children
who go to the beach have to wear full bathing suits, hats and
the incidence of melanoma is the highest among the developed
countries in the world. To me it seems we should be vitally
concerned about it and moving to at least acknowledge that
maybe this ought to be included as soon as we can. I think it
would be encouraging.
You come with a perspective, you know the business very
well and you serve a good community but maybe it is hard to
break ranks. We have seen that around here sometimes.
Mr. Paul, one of the things we hear about, and I note in
Senator Gard's testimony the fact that we wind up with more
litigation if we don't move on with this legislation but I
think if we do, it allows existing Clean Air Act programs to be
abandoned and compliance deadlines extended far into the
future. Won't this generate more litigation than simply
implementing our current law?
Mr. Paul. I would personally agree with you. The
uncertainty that is out there right now is caused by
litigation. Most of the litigation is from the utility
industry. There is certainty there. If they want to meet the
current laws, they could simply meet the current laws and there
would go the uncertainty. I heard earlier today that within
Clear Skies there are 27 different points that this person who
was talking to me feels will be litigated.
Senator Lautenberg. So we are looking at more, not less.
Senator Gard in your testimony, you say the answer, referring
to the 15 years after passage of the 1990 Clean Air Act, so if
the Act has worked, why do we need new multi-emission bills?
The answer is litigation and uncertainty. Mr. Paul just said 30
of the lawsuits in the last 15 years against EPA have been from
industry, not from the environmental community. Are the
litigants people we ought to be listening to or do they want to
improve the regulation of these emissions?
Ms. Gard. Yes, the people that I represent want to improve
regulation of emissions. I think we feel it can be done in a
much more consistent fashion by doing a three-p legislation.
The Clean Air Act met the goals that were intended when it was
passed a number of years ago. Economies change, technology
changes, demographics change which I think means we have to go
back and revisit those issues which I think Clear Skies does
and provides that degree of certainty that is achievable and is
affordable and will improve health standards far greater than
we have seen ever before.
Senator Voinovich. We have a vote coming up now. We have
about 7 minutes left. I don't want to keep the panel. I would
like to go on and let Senator Obama ask questions and have you
respond and we will recess.
Senator Lautenberg. And you will keep the record open?
Senator Voinovich. Yes, we will. Then we will excuse this
panel and tell the other panel we will get back as soon as
possible so we can get started.
Senator Obama.
Senator Obama. I will be brief.
Senator Voinovich. I want to thank you for sticking around.
Senator Obama. That is how you learn, I hear, by listening.
I think I just want to clarify a couple points. One, a
point I think Senator Lautenberg was alluding to, that when we
talk about the desire for consistency and predictability, a
goal I think all of us share, that does not in and of itself
answer the question of what kind of regulatory regime we set
up. You could be very consistent with a very high standard of
emission controls or you could be very consistent with no
enforcement of any emissions controls. I will start with you,
Mr. Mayor, is that a fair statement, that consistency and
predictability in and of itself doesn't really tell us what to
do, it is a good goal for us to achieve but it doesn't tell us
where we set the bar?
Mayor Young. You are absolutely right, Senator, but we feel
through our resolution, the goals that we have asked to be met
are achievable are reasonable and are going to give us cleaner
air and a healthier population and it is going to give us that
70 percent reduction.
Senator Obama. Fair enough but I think it is important for
us to recognize that the real argument is not whether anybody
wants consistency and predictability, the real argument is what
are the standards when we set these things and the argument I
think that State Senator Gard, and as a former State Senator, I
am pleased to see you, I think the argument you are making is
you feel the current clean air standards are sufficiently harsh
and/or inflexible, that they compel litigation on the part of
utilities and if we had a more flexible and perhaps less
Draconian regime, then we'd have less litigation and the
utilities would be happier. Is that a fair characterization of
your point?
Mayor Young. I would say what you have now are 50 different
regimes enforcing it. This legislation gives you a national
standard.
Senator Obama. My understanding from Mr. Paul is we are all
in agreement, Senator Jeffords, Senator Carper, and people
agree with the idea of having a national standard. The question
is, what is the standard. So for me who is new to this
committee, I am very mindful of the local economic concerns. I
guess part of what I have to figure out is not whether I want
to achieve consistency and uniformity and predictability all of
which I think are good things, I want to achieve those things,
but rather what kind of national standard do we set and would
the national standard presented by this bill be an improvement
over the system we have established under the Clean Air Act.
Mr. Paul, I am not a scientist and my understanding when I
read your statement was, too protracted, not tough enough,
strips away tools like new source review. That is the essence
of why your organization is opposed to this bill. Is it your
position that if we did nothing and kept the Clean Air Act
regimen currently in place that we would see better air
quality, more improvements over the next 15, 20 years than we
would under this new bill or are you saying the new bill simply
is not as good as what you would like to see or others in the
environmental community would like to see?
Mr. Paul. We believe that enforcement of the current Clean
Air Act is preferable.
Senator Obama. When you say preferable, you are saying our
environmental quality will be better?
Mr. Paul. Yes. Certainty is important. The public wants
certainty that the air they breathe is safe, the fish they eat
are safe. Companies want certainty that when we go to them and
say we want you to control to this extent that is sufficient to
provide certainty, that we are not back at them 10 years from
now. I think legislatures want certainty that when we say if
you pass this bill, this will provide for clean air and we
won't be back to you in 10 years. Those are the elements I
would look for in a bill if I were you.
Senator Obama. Obviously I have just scratched the surface
but I know we have a vote. I appreciate your giving me that
time despite the fact we are rushed.
Senator Voinovich. The question period for these three
witnesses is going to be over so we can submit questions and
get answers from you. Thank you for being here today.
We will recess this hearing for the next panel. I think
your group did a good job of analyzing Clear Skies. Without
objection, I am going to insert in the record some memorandum
that deals with some of the positions you have taken in terms
of this legislation and counteract some of the things you have
had to say and perhaps you might have a chance to see it in the
record. I would be interested in your getting back to me about
your reaction to the reaction this memo has.
Mr. Paul. I would be very happy to do that.
[The referenced document follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Senator Voinovich. Thank you very much. I appreciate you
being here.
[Recess.]
Senator Voinovich. Senator Carper is on his way so let us
get started.
Our first witness is Ronald Harper, CEO and general manager
of Basin Electric Power Cooperative. Our second witness is
Conrad Schneider, advocacy director, Clean Air Task Force. Our
third witness is Fred Parady, manager, Environmental Services,
OCI Wyoming L.P. We will start with you, Mr. Harper.
STATEMENT OF RONALD HARPER, CHIEF EXECUTIVE
OFFICER AND GENERAL MANAGER, BASIN ELECTRIC POWER COOPERATIVE
Mr. Harper. Thank you for the opportunity provided to us to
participate in this hearing.
Basin Electric is a member-owned, generation and
transmission cooperative located in Bismarck North Dakota. We
serve the energy needs of a 120-member distribution cooperative
throughout a 9-State region. Member-owned simply means we
provide electricity needs to those who own us. As a
cooperative, they own us.
They gave us a mission back in 1961 when Basin Electric was
formed and that was to provide low cost energy and make it
reliable. The visionary leaders back then selected coal to be
utilized as the fuel that would fuel the generating stations we
have with us today. That was 44 years ago and today we utilize
not only lignite coal but also subbituminous.
When we look at the Nation's energy supply, 50 percent of
the Nation's energy is supplied by coal and we think that is
very important. It is important with respect that we have the
continued ability to burn coal in this country, not only from
Basin's perspective, but the economy as a whole. We think it is
critically important. It not only enhances our energy
independence which I know is a great focus of this Congress as
well as providing security for that energy independence.
I want to talk about three points. I heard the chairman say
earlier that our testimonies would be included in the record,
so I am not going to go through those. Environmentally
sensitive, we think S. 131 will provide reductions greater than
under the current law and we think it will provide them sooner.
We look at that from the respect of the studies done by other
agencies as a part of this.
We have heard a lot of talk about certainty throughout the
earlier discussions. I would tell you we believe by having
targets out there on SOx, NOx and mercury, does provide those
targets and gives us something to shoot for, if you will. I
heard a lot of discussion about legislation versus regulation
and we believe if it becomes legislation, that it will remove a
lot of the litigation that is currently underpinning some of
the issues going on.
Senator Voinovich. In other words, you believe that passing
legislation will remove some of the litigation in that the
litigation is based on regulations?
Mr. Harper. Yes, sir. I think as we look at the litigation
currently, it is really coming about because there are
questions as to how regulations are being applied. Again, it
provides us with certainty and will help in our planning
efforts.
Last, flexibility gives us options on how to meet the goals
with a target set forth under this legislation. It will allow
us to look at all forms of technology and to install the
appropriate technology or in this case, take advantage of the
cap and trade program that has been utilized for many years
under the Acid Rain Program and I think is a good tool that
could be reviewed. Common sense decisionmaking will also help
us to meet that end game.
I want to close by saying that when Basin Electric looks at
the proposal of Clear Skies, we support it, we think it gives
us that certainty and that flexibility. We also recognize it
will be expensive. As I take you back to our mission of
providing low cost and reliable energy, that will not come
without its challenges but we think it is in the long term the
best thing for us to do as an organization as well as the best
thing for us to do as a Nation.
Again, thank you for allowing us to come forward and offer
testimony. We look forward to working with you and the
subcommittee as this process moves forward.
Senator Voinovich. Thank you, Mr. Harper.
Mr. Schneider.
STATEMENT OF CONRAD G. SCHNEIDER, ADVOCACY DIRECTOR, CLEAN AIR
TASK FORCE
Mr. Schneider. Thank you. My name is Conrad Schneider. I am
the Advocacy Director of the Clean Air Task Force. The Task
Force has supported multi-pollutant legislation since we were
founded in 1996. We appreciate the opportunity to testify here
on the Clear Skies bill.
In our advocacy we represent a host of national, State and
local environmental groups including ones in your State and
today in addition to our own, I am representing the views of
Clear the Air, the National Environmental Trust and also the
U.S. Public Interest Research Group.
Why are we here? We are here because power plant pollution
is the single greatest contributor to our Nation's air
pollution problems, whether death and disease from soot and
smog, acid rain, mercury contamination in fish, hazy vistas in
our national parks or the threat of global warming. No other
source rivals power plants as the cause of a variety of so many
serious problems.
We have principals too with respect to how we judge this
legislation. Our first principle is do no harm. We should
strengthen and not weaken the Clean Air Act. Second, we should
begin to address global warming through mandatory emission
limits. The so-called Clear Skies Act does neither. We are here
to urge that you oppose it. Clear Skies will lock us into a
path that guarantees that we will never solve these problems.
That is because Clear Skies trades weak, delayed pollution caps
in exchange for the repeal of most of our current clean air
safeguards and misses a crucial opportunity to begin to deal
with global warming.
First, the Clear Skies bill offers only half measures
compared to the requirements of current law. It offers
pollution reductions that are too little, too late to meet our
Nation's clean air objectives. EPA's own analysis demonstrates
that the reductions are not fully effective until 2025 or
later. At the same time, Clear Skies would jettison most of the
current clean air requirements for power plants, thereby making
further progress with this sector impossible.
Specifically, Clear Skies repeals or undercuts title limits
on new power plants, requirements that plants meet modern
pollution standards when they upgrade their facilities and
protections from air toxic risk. With the introduction
yesterday of the latest version of the bill, we can see it
seems to be a Trojan horse for a broader dismantling of the
Clean Air Act. Clear Skies, in our view, would function much as
a computer worm sabotaging the inner workings of the Act and
nullifying its effectiveness. Most insidiously, Clear Skies
would delay from 2010 to 2015 the date by which most areas have
to meet health-based air quality standards. EPA has calculated
that attainment of the fine particle standard alone would save
an estimated 15,000 lives per year. That 5-year delay would
mean 75,000 unnecessary premature deaths.
Clear Skies fails to address the threat posed by global
warming from the world's single largest source of carbon
dioxide, the U.S. power industry which was responsible for 10
percent of the world's CO<INF>2</INF>. In fact, Clear Skies
locks the power sector into a path of increasing carbon dioxide
emissions for the foreseeable future.
It need not be that way. American Electric Power and
Synergy very recently described workable programs that could
begin to manage carbon pollution without economic dislocation,
shifting energy mix from coal to gas or excessive increases in
electricity bills for consumers. Similarly, the bipartisan
National Commission on Energy Policy recommended mandatory
limits on carbon and this was endorsed by the United Mine
Workers. Congress should not pass multi-pollutant legislation
unless carbon dioxide is part of it.
Fortunately, we are not stuck with a choice between Clear
Skies on the one hand and no progress on power plant pollution
on the other. The EPA Administrator has on his desk right now
three rules that could yield substantial progress in cleaning
the air without damaging the underlying Clean Air Act. First,
the Clean Air Interstate Rule that addresses soot and smog in
the east could if strengthened represent a major step forward.
The Pending Clean Air in the Parks rule could address these
pollutants in the West. Likewise, EPA has pending before it a
regulation to control hazardous air pollutants from power
plants including mercury. The weight of the evidence supports a
90 percent reduction.
Legislating on this issue at this time would be premature
when the Administrator with the stroke of a pen could finalize
strong power plant rules which together would provide a multi-
pollutant approach. Right now the caps in Clear Skies and those
regulations mirror each other. Given this, one must conclude
that the major impetus for this legislation at this time is to
ensure that those caps are coupled with the statutory rollbacks
in this bill. In fact, the biggest selling point today for
Clear Skies is its offer of regulatory certainty for polluters.
It is hard to imagine how we could have certainty without
CO<INF>2</INF> but even with respect to litigation, here is the
bill. It is 250 pages long and although it was released
yesterday, a preliminary read does find they would require the
EPA Administrator to make no fewer than 27 separate findings
and regulations, most or all of which could be challenged by
litigation.
What certainty does that offer for breathers, people who
want to eat fish without fear of contamination from mercury or
want to see the view when they go to the national parks? Clear
Skies offers only the certainty of failure because it fails to
achieve sufficient cuts in pollution to solve these problems on
the one hand but eliminates the Clean Air Act's tools to solve
them on the other.
Let me walk you through a few slides to demonstrate this
last point with respect to the certainty of failure. The first
map is the risk of mortality from power plants in the United
States. According to EPA's own methodology, 24,000 peoples'
lives are cut short every year because of power plant
pollution. This slide is under the Clean Power Act where 22,000
of those lives could be saved. This is Clear Skies. Take a look
at that picture because that is all we will ever get from power
plants. That level of mortality risk will remain because Clear
Skies puts the power industry in the safe harbor. We can't get
additional reductions from the power sector if Clear Skies
passes.
Similarly this is the map of nonattainment areas in the
United States, in 2010, the data by which States have to reach
attainment under Clear Skies. The only way to get this red out
because we can't touch the power plants, is to go after other
sources, local businesses, drivers, diesels, et cetera, sources
that are less cost effective. Power plant pollution is the low
hanging fruit.
Senator Voinovich. Mr. Schneider, could you move on, we are
over your time.
Mr. Schneider. Clear Skies precludes us from being able to
go after further cuts.
Similarly for mercury, only 20 percent of the watersheds in
the United States would see any improvement under Clear Skies,
80 percent new improvement. Acid rain, Hubbard, Brook and
researchers at Syracuse University have found nothing short of
an 80 percent reduction would allow biological recovery in the
Adirondacks and New Hampshire's damaged ecosystems before mid-
century. Because Clear Skies doesn't get you there, that
problem isn't solved because you can't go back after power
plants.
Look at these two slides. This is Acadia National Park in
my home State of Maine. This is the great Smokey Mountains. In
the upper right hand corner of each chart is the improvement
under Clear Skies. It is almost no different from a current
polluted day. Whereas when we go to a national park, it is the
bottom picture that we are there to see. This picture can't get
any better because even though further reductions would be
required to clear the air there, you can't get them under Clear
Skies.
Last, Clear Skies locks in a path of every increasing
CO<INF>2</INF> emissions because if it passes, it is going to
be very difficult to go back and address the fourth P after the
first three P's have been addressed.
Senator Voinovich. Thank you very much.
Mr. Schneider. In conclusion, let me say we would urge
members to oppose Clear Skies. Thank you for the opportunity.
Senator Voinovich. Thank you.
Mr. Parady.
STATEMENT OF FRED PARADY, MANAGER, ENVIRONMENTAL SERVICES, OCI
WYOMING, L.P., ON BEHALF OF THE NATIONAL ASSOCIATION OF
MANUFACTURERS
Mr. Parady. My name is Fred Parady and I am manager of
Environmental Services for OCI Wyoming. Since 1962, we have
operated a 4 million ton per year underground trona mine and a
2.3 million ton per year soda ash refinery located near Green
River, Wyoming. Two of our customers are a glass plant in
Toledo, OH and a television tube manufacturer in Columbus, OH,
so we are connected to your State as well.
As you are undoubtedly aware, I speak today on behalf of
the National Association of Manufacturers in support of the
Clear Skies Act of 2005. As I am sure you know, NAM is the
Nation's largest industrial trade association representing
small and large manufacturers in every industrial sector in all
50 States. Virtually all the members of NAM use electricity as
a major source of energy and for the vast majority of them,
electricity is their largest energy cost. In fact, the
manufacturing sector excluding electric generation uses about
one-quarter of the Nation's energy including almost one-third
of its natural gas and 30 percent of its electricity.
According to a recent NAM study, external overhead costs
including regulation and rising energy prices add approximately
22 percent to United States manufacturers' unit labor costs,
nearly $5 per work hour relative to their major foreign
competitors. Therefore NAM member companies' ability to compete
in the highly competitive international marketplace is directly
affected by any legislation that would have a major impact on
such a broadly used and insignificant input cost as
electricity.
The year 2003 marked a milestone for my industry as China
overtook the United States for world leadership in soda ash
production for the first time in history. China has quadrupled
their soda ash capacity in the last decade from less than 3
million tons per year to more than 11 million tons per year.
The plain fact is you can't pass increased energy costs on to
the marketplace when you face international competition.
I would like to further address energy costs for the soda
ash industry. Energy price volatility for both electricity and
natural gas are causing the soda ash industry to lose its
ability to reinvest. Natural gas price volatility and annual
rate increases from our electrical utility are forcing our site
to consider retrofitting our calsigners to coal. The Clear
Skies initiative would strengthen our ability to pursue this
project thus assuring both investment and long term energy
price stability.
Returning to the general energy picture in the United
States, should the maze of current clean air requirements and
the litigation that inevitably results add uncertainty and
delay, they have the effect of forcing electric utilities to
switch from coal to natural gas. The consequences to industry
and to the general public are devastating and they have already
had a significant impact. The 66 percent increase in natural
gas volume used to generate electricity since 1990 has
contributed to the high cost of natural gas which has had an
adverse impact on the manufacturing sector since mid-2000.
Senator, my own company in January 2001 when gas prices
spiked, our small plant lost $4 million in 4 weeks. That is
hard to bear with a 400-employee operation.
Senator Voinovich. When was that again?
Mr. Parady. In January 2001 when natural gas prices spiked,
our small plant lost $4 million in 4 weeks. That is hard to
bear with a 400-employee operation.
The chemical industry has gone from the lead net export
industry of the United States to a net importer of chemicals.
Other industries including plastics, aluminum, steel, soda ash,
metal, heat treating glass and paper are struggling to stay
afloat in the current natural gas cost environment. Unless
there is a rational investment future for coal fuel electrical
generation, crude and electricity providers will continue to
build units using natural gas or restart many of the idled
natural gas units currently not operating because of high
natural gas prices.
Business as usual under the current archaeological pile of
Clean Air Act provisions and regulations which are almost 35
years old is an unacceptable alternative. These overlapping,
conflicting, burdensome single emission provisions of the
existing Clean Air Act will continue to result in significant
uncertainty, delays for legal challenges, short planning and
construction time periods and ultimately higher electric costs
and unstable natural gas markets.
Specifically, NAM believes that the Clear Skies Act that is
consistent with the following principles provides the best
opportunity to make further progress. First, the Clear Skies
Act must remain a three emission bill, sulfur dioxide, nitrogen
oxide and mercury. NAM does not believe it is appropriate to
include carbon dioxide provisions in the legislation since
CO<INF>2</INF> is not a pollutant, is not regulated, nor
required to be regulated under the Clean Air Act. More
importantly, NAM strongly opposes any legislative proposal that
would establish CO<INF>2</INF> mandates. We urge the committee
to avoid encumbering this vital legislation with such
controversy.
Second, the Clear Skies Act should not extend its mandates
to either current or future industrial boilers or non-utility
combined heat and power systems, CHP systems, but should
provide such industrial units the opportunity to voluntarily
opt into the benefits and obligations of the cap and trade
program.
Finally, the Clear Skies Act must support the continued and
increased use of coal for electric power generation.
Mr. Chairman, NAM is particularly concerned about mercury
emission levels that would be part of final Clear Skies
legislation. Significant reductions of mercury will occur under
the bill's current Phase I caps for SOx and NOx. Going beyond
this level control to soon would force the premature closing of
many existing coal-fired power plants in favor of new natural
gas facilities further straining already limited natural gas
supplies.
In summary, NAM strongly supports the Clear Skies Act as a
way to avoid excessive energy costs while mandating future
dramatic reductions in SO<INF>2</INF>, NOx and mercury.
Senator Voinovich. Thank you very much.
I will begin the round of questions. It will be 5 minutes
for each of the Senators.
Mr. Harper, we heard today some claims that Clear Skies
requires no more reductions in the existing Clean Air Act. You
state it will have significant financial impact. Can you go
into greater detail on this point? If that truly is the case,
why do you support the bill? I think a lot of people feel if
this passes, somehow people are going to get a break. I would
like you to go into that because that is not my understanding
from our utilities who have indicated they are willing to make
investments but also point out it is going to cost the
ratepayers more money.
Mr. Harper. As I have had to step back and take a look at
it, I listen to my staff debate the issues. I have people at
the plants that know how to run plants who come up with new
ideas and thoughts about how to improve efficiencies and then
we go to our environmental and legal people and say who can't
do it because of concern over NSR, not because that is a bad
thing but the clarity is what I am seeing. I am advised the 70
percent reduction in NOx, SOx and mercury is going to be a
tremendous benefit to this country. That will give us targets
to shoot at. Looking at the history, when given targets we have
proven the fact that we can obtain those. Again, all I am
asking for in this whole process is certainty.
The expense of, for instance, a scrubber in today's
technology I am advised is roughly $230 million. You don't put
that thing on overnight. My engineers tell me that it takes 3
to 4 years once you make the decision to go with that
installation. On top of that, you also then have the funding
issues. For instance, the cooperatives are able to get funding
through the Rural Utility Service and in some cases that can
take as much as 1 to 2 years to get that. So when you start
looking at things, time is money and we could be looking at
anywhere from four to 5 to 6 years before you could ever get a
scrubber installed. That is really what I am talking about.
Give us the targets and enough time to go out there and develop
the technology and so on to achieve them and we will go from
there.
Senator Voinovich. You described the Clean Air Act as
actually preventing you from making improvement that would
reduce energy emissions?
Mr. Harper. That is the example that I was explaining.
Senator Voinovich. It is the uncertainty of what this is
all about.
Mr. Harper. Yes.
Senator Voinovich. Mr. Schneider, contrary to your
testimony the Energy Information Administration has found
because of their CO<INF>2</INF> emission cap levels, the shifts
away from coal toward natural gas are projected to be much
larger under the Carper-Jeffords bills. ``Natural gas
generation is projected to be from 4.4 to 6.3 and 22.4 to 22.7
percent higher in 2010 and 2025 respectively in Senator
Carper's legislation. Electricity prices under Senator Carper's
bill are expected to increase twice as much as prices estimated
under Clear Skies in 2025.'' The Jeffords bill is much worse.
These facts lead me to believe that you want to get rid of
coal. On September 17, 2004, Albert Kohl, staff lawyer with the
Sierra Legal Defense Fund, said in general, ``Our long term
objective is to make sure that coal-fired plants get closed.
Eventually with enough attacks against coal-fired plants, there
will be action to shut them down.'' Do you agree with the
Sierra Club's lawyer on this issue, that we ought to get rid of
coal?
Mr. Schneider. Getting rid of coal is not the Clean Air
Task Force's long term goal. Cleaning up the air and protecting
the climate is our goal. That is the principle that we follow
and we think it is a false choice to pose the notion that coal
and clean air or coal and a healthy climate are incompatible.
We have provided briefings to this body and on the Hill to try
to demonstrate there are clean coal technologies so-called that
allow for coal to be gasified, burned and the CO<INF>2</INF>
sequestered in such ways that would allow coal to meet our
energy needs going forward but also being compatible with the
Clean Air objectives that we have enunciated.
Senator Voinovich. You mentioned American Electric Power
and Synergy is going forward with integrated gas combined cycle
facilities but they both are very, very strongly in favor of
our Clear Skies legislation because they say the current
situation today is unwieldy. We don't know where we are, we
have new source review, we have 126 petitions, we feel we are
flying in a plane with all kinds of flak up there and we don't
know when we are going to get hit and we want some clarity on
this and we are willing to go forward with it.
Mr. Schneider. I understand they said to their shareholders
part of that clarity could include from their perspective
reasonable carbon dioxide controls and their analysis showed
they could meet reasonable goals without economic dislocation
to their companies, their shareholders, their ratepayers or
without the impact as you described. I think, Senator
Voinovich, you ordered a look at what it would cost and the
energy mix ramifications from a 2008 cap along with Senator
Smith at that time and Brombeck and determined the same thing
that it is possible to meet the President's objections about
CO<INF>2</INF> with respect to fuel shifting and cost but
nevertheless get started on CO<INF>2</INF> controls.
Senator Voinovich. Senator Carper.
Senator Carper. Thanks to our witnesses for joining us.
EPA year or two ago actually looked at the Jeffords bill,
the Administration's bill and a bipartisan proposal and looked
at the amount of shifting you would find under either bill,
shifting from coal to natural gas. I think they found there
would be reduction under our proposal of maybe 50 to 48 percent
in terms of coal being used for electricity generation.
In terms of cost, I think they estimated the cost per
kilowatt hour of our bill fully implemented of about a cent and
a half per kilowatt hour. I think they said the cost in our
utility bills each month would be less than $1.50 a month.
I was born in West Virginia. My family are generations of
coal miners if you go back far enough and I don't want to do
anything to hurt the coal industry and am very much interested
in what Mr. Schneider said about coal gasification. Why don't
we have more utility companies investing the money for coal
gasification operations? Why is that? It has been around for a
long time, the technology is there.
Mr. Schneider. The fastest way to get them to invest would
be to set hard limits on carbon dioxide especially when we are
on the verge in this country of building a lot of new coal
plants. We track the proposed coal plants around the country.
Our feeling is if we are going to begin to turn the great
freighter of CO<INF>2</INF> emissions increases, the last thing
we need to do is build more conventional coal plants that are
going to continue to emit CO<INF>2</INF> into the air when we
have the opportunity to build coal plants that don't. Probably
one of the things standing in the way of IGCC development, one
of the major signals that could help that would be to send a
signal that carbon has a value. It is a negative value with
respect to the health of the planet but a positive value with
respect to the dollars. If we did that, I think you would start
to see depending on the levels, more development in that
direction. That probably should be part of the consideration of
any bill of this type.
Senator Carper. Let me turn to new source review. Critics
of the Administration's proposal say that the Administration
would largely gut or eliminate new source review. Critics of
Senator Jeffords' proposal say it makes almost no changes in
new source review. Senators Alexander and Gregg and Chafee and
I have sought to see if there is a third way, somewhere in
between basically status quo and find a third way. What might
be that third way with respect to new source review even if you
are wedded to one of the other approaches?
Mr. Schneider. As I said, we judge these proposals based on
principles but the two principles are we would seek to
strengthen not weaken the Clean Air Act and seek to make sure
that we begin the process of regulating carbon. We look to what
the Clean Air Act would achieve, we are one of those
organizations that tries to make sure the letter of the law is
followed because we believe that was the intent of Congress
when it passed legislation.
In my spare time I teach a course at Boden College in
environmental law and policy. I explain to my students that
there are different regimes of environmental regulation
including one called command and control, one called market
mechanisms but sometimes known as cap and trade. The proponents
of using market mechanisms or cap and trade generally defend
that view by saying they can do more faster, cheaper than under
a command and control situation which I think is the way many
would characterize the patch work of regulations we have
currently under the Clean Air Act.
The starting place for the debate should be what we are
getting now, what does the letter of the law require and how
can we use the cap and trade to go further faster, cheaper, not
half as far or not three quarters as far. When we see the
different proposals, we judge them first and foremost on the
basis of the stringency of the reduction requirements. We find
that the Clean Air Planning Act does not go as far as current
law and therefore are reluctant to want to give up a tool such
as the new source review provisions that allow us to drive
continuous progress in clean air.
Senator Carper. My question is whether you like the status
quo or like the Administration's proposal, if you had to help
us craft a third way, a middle ground, what might that be?
Mr. Harper. I would like to give that one some more
thought.
Senator Carper. Come back to us in writing.
Mr. Harper. I heard a lot of discussion this morning as
each of you were giving your overviews about collaborative
processes and I think that would be one of those.
Senator Carper. Mr. Parady, briefly if you could respond?
Mr. Parady. I think NSR is a flat concept and it compares
current actual emissions to potential emissions and would be a
more sound public policy basis to either compare actual to
actual or permit to permit.
Senator Carper. Thank you. I would look forward to your
written response. Mr. Schneider, if you want to add to what you
said, I would welcome that as well.
Senator Voinovich. Senator Jeffords.
Senator Jeffords. I ask unanimous consent to enter into the
record some statements, articles and written materials from the
League of Women Voters, the National Conference of State
Legislatures, the CNN, the Northeast States Air Quality
Managers, the American Academy of Pediatrics, the American Lung
Association, a chart comparing the various multi-pollutant
approaches, the Guardian Newspaper and the Maryland House of
Delegates.
[The referenced document from the Maryland House of
Delegates follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
______
Statements of the National Conference of State Legislatures*
---------------------------------------------------------------------------
* Statements taken from National Conference of State Legislatures'
Web site
http://www.ncsl.org/statefed/environ.htm
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new source review (nsr) program
(Joint policy with Energy and Electric Utilities)
The National Conference of State Legislatures (NCSL) urges the
Environmental Protection Agency (EPA) to reform the NSR program to
achieve improvements that enhance the environment and increase
production capacity, while encouraging efficiency, fuel diversity and
the use of resources without weakening the requirements intended to
reduce emissions from new or modified sources of air pollution. Routine
maintenance, repair or replacement activities which are not major
modifications should not trigger NSR requirements.
July 2005
______
air quality
The Clean Air Act Implementation
The National Conference of State Legislatures (NCSL) supports the
goals embodied in the Clean Air Act Amendments of 1990 (CAAA). The CAAA
represent a major step toward addressing important environmental, air
quality, and public health issues. NCSL fully supports CAAA goals and
urges the U.S. Environmental Protection Agency (EPA) to proceed
diligently with full implementation of the law to achieve clean air for
our citizens. It is essential that Congress and the EPA fulfill their
responsibilities to facilitate implementation by the states.
NCSL makes the following recommendations:
Implementation of the CAAA is the responsibility of the states,
who have a wealth of experience in implementing control programs. NCSL
encourages Congress and the EPA to pay particular attention to the
voices of that state expertise and experience.
Communication with state legislators is of utmost importance
because only state legislators can enact enabling legislation for state
programs and appropriate state funds. Congress and the EPA should
regularly and directly work with state legislators during federal
action on air quality issues.
EPA should work closely with states to ensure states have all
regulations, technical assistance and funding necessary for compliance.
Federal grants authorized under the CAAA provide financial
resources to the states for development and implementation of air
quality programs and other clean air responsibilities. Congress and the
EPA must ensure that states continue to receive adequate funding to
cover all costs of program management including monitoring.
Because the states have existing air pollution control programs
to administer with current federal funding, any new air quality
programs or responsibilities mandated by Congress or EPA should be
accompanied by additional federal funding.
The CAAA contain many sweeping and general mandates which will
involve the exercise of broad discretion and interpretation by the EPA
for their implementation. NCSL urges EPA to provide as much
administrative flexibility as the law allows in order to achieve clean
air goals in the most cost effective and efficient manner.
Cost-effectiveness should be permitted as a factor in state
selection of transportation control measures and emissions control
strategies.
Numerous sections of the CAAA require the EPA to develop
regulations and technical guidance for the states to follow in their
implementation process. The regulations and guidance are essential to
state efforts to implement complete and adequate state programs that
fully comply with the CAAA. Often the EPA is very late in publishing
regulations and technical guidance for state programs and
responsibilities. Such delays leave little or no time between the
publication of the documents and the statutory deadlines for state
compliance. NCSL urges EPA to meet all deadlines for publication of
documents required under the CAAA. NCSL urges Congress to amend the law
to replace statutory deadlines for state action with language that
provides a specific time period for state compliance after document
publication.
EPA should provide training opportunities for states to help
develop the skills and understanding needed to properly implement the
CAAA. In addition, EPA should provide informational resources to help
the public understand its role in achieving CAAA goals.
To address ozone nonattainment problems, the CAAA require
significant nitrogen oxide (NOx) and volatile organic compound (VOC)
emission reductions to be obtained from both stationary and mobile
sources. Since any reductions that are not obtained from mobile sources
must be obtained from stationary sources, Congress and EPA should take
maximum advantage of tools and strategies to reduce emissions from
mobile sources including but not limited to promoting alternative fuels
and encouraging strict exhaust standards for light duty vehicles.
Federal highway legislation should be made consistent with CAAA
objectives. The EPA and the Department of Transportation (DOT) should
work together to ensure coordination of federal policy.
NCSL urges the adoption of national energy, transportation and
other policy that emphasizes energy conservation in order to help
achieve the goals of the CAAA. This should include strengthening of
emission standards for automobiles as technologies improve, more
energy-efficient lighting, buildings, and transportation, and more
research and use of alternative forms of energy.
NCSL urges the federal government to expeditiously apply the same
CAAA requirements to federal facilities and motor vehicle fleets that
are required for state facilities and fleets.
sanctions
States should not be sanctioned for non-compliance if state's
failure to comply was the result of EPA's failure to adhere to CAAA
deadlines for promulgation of regulations or technical guidance that
provide details and requirements of state programs.
EPA should have the authority to waive sanctions on states that
EPA determines are making reasonable good faith efforts to comply with
CAAA requirements and deadlines.
motor vehicle inspection and maintenance
States should be granted flexibility to design inspection and
maintenance (I/M) programs that achieve air quality targets and should
receive full credit for emissions reductions those programs achieve.
Congress and EPA should not require the states to use specific I/
M technologies. Such rigid federal requirements may fail to account for
technological advances in emissions testing programs and equipment.
low emission vehicles and zero emission vehicles
EPA should maintain national Low Emission Vehicle (LEV)
standards, referred to as the 49-state car, that are stricter than the
law requires. States should be allowed, but not required, to adopt Zero
Emission Vehicles (ZEV) requirements.
transportation conformity with state air quality plans
NCSL supports the principles underlying transportation conformity
provisions of the Clean Air Act that requires new or revised state
transportation implementation plans (TIPs) to conform to the purpose of
state air quality plans, also referred to as state implementation plans
(SIPs).
Adequate funding should be made available to cover the cost of
the resource-intensive requirements for development, revision and
implementation of conforming TIPs.
In evaluating the emissions budgets submitted by states, EPA
should ensure state flexibility in balancing the burden of reduction
among all air pollution sources.
Conformity requirements should be limited to nonattainment areas
and areas at risk of becoming nonattainment.
July 2006
Senator Voinovich. The guardian from London or from where?
Senator Jeffords. London.
Do you believe that the Administration has a legal
authority under the current Clean Air Act to issue the Clean
Air Interstate Rule?
Mr. Harper. I am not an attorney and I truly have not paid
a great deal of attention if you will to the CARE rule because
it does not have a direct impact upon our organization. So I
really could not answer that question.
Mr. Schneider. EPA has the legal authority to issue the
CARE rule and they have said most recently that they plan to
sign it on March 15 along with the mercury rule and the parks
protection rule. They are intimately related to each other and
earlier I suggested it would be premature for this body to
legislate before we have seen the results of those rules.
Mr. Parady. Yes, I think the Administration has that
authority. However, I believe it would lead to quite a
substantial cycle of litigation and I prefer legislation to
litigation.
Senator Jeffords. A couple years ago, we had a prestigious
panel of scientists tell this committee that increasing
greenhouse gas emissions increases the risk associated with
global warming. According to EPA modeling, the Clear Skies
approach will result in a 13 percent increase or an additional
425 million tons of carbon dioxide emissions compared to the
base case. Do you think it makes sense for Congress to ignore
the contribution of power plants to global warming?
Mr. Harper. As I look at this bill, it is a utility bill
and it is addressing three important issues, SOx, NOx and
mercury. If you want to bring in the issue of CO<INF>2</INF>
and we are truly as a Nation interested in looking at that, I
think you have to broaden the scope. I would encourage us as
you heard earlier this morning to move forward and take an
opportunity we have before us and getting the 70 percent
reduction in those three areas and at a later date, let us talk
about CO<INF>2</INF>.
Mr. Schneider. The U.S. power industry is the single
largest contributor to CO<INF>2</INF> emissions in the world,
it makes 10 percent of the world's CO<INF>2</INF> emissions.
The global warming issue cannot be addressed without addressing
the emissions from this industry. You have an opportunity here
when you are discussing multi-pollutant legislation to change
the law to be able to include all of the potential regulatory
decisions that an industry is going to face at once rather than
making them piecemeal and one at a time. That is why I think we
all in general support the idea of a multi-pollutant approach.
Why would it make sense if you are going to legislate to do
three and then one where investment decisions are going to be
made to comply with the three which may be inconsistent with a
policy that includes the fourth pollutant, CO<INF>2</INF>.
We would very much support and believe any multi-pollutant
legislation passed in Congress should include CO<INF>2</INF>
provisions.
Mr. Parady. I would like to flip Mr. Schneider's argument.
If power plants represent 10 percent, United States power
plants represent 10 percent of the world emissions, that means
that 90 percent of those emissions aren't affected by this
legislation so the core of the matter, you are putting at risk
the core of America's industrial infrastructure and backbone
and yet you only have the tiniest portion of the tail of the
dog. We all know there are strongly held views on global
warming, what causes it and what should be done about it.
I am deeply concerned that regulating CO<INF>2</INF>
emissions because of multi-pollutant legislation would lead to
greater use of natural gas to generate electricity which is
going to drive up energy prices in the United States, drive up
manufacturing costs and drive jobs offshore. It is that
straightforward and that is exactly what has happened in our
operation.
I also believe that regulating CO<INF>2</INF> in multi-
pollutant legislation will lead to a political impasse that
will jeopardize passage of this bill which directly addresses
three key pollutants I think every person on your committee and
every testifier you have had before you supports the reduction
in those three major pollutants.
Senator Voinovich. Your time is up.
It is interesting that we have had 23 hearings on multi-
emissions legislation. I wonder are we in the real world. We
are in the fourth world war, we are fighting extreme Muslim
fundamentalists which is a whole new deal for us and how we
deal with that when it is different from what we have ever done
before. I think Americans including all of us don't understand
we are in a global marketplace. If you come from a State like
Ohio where you have seen the crap kicked out of manufacturing
and look at the litigation, look at health care costs and
energy costs and see what has happened. The answer is why have
we built more energy plants? Eighty-eight percent are natural
gas fired. Stupid. Why are they doing it. Why are we doing it?
Drive up natural gas costs, twice what they were a couple years
ago, driving jobs offshore. Four manufacturers have come to my
office saying we are pulling our manufacturing out of the
United States, we are going overseas, the chemical industry
where we were exporters and now we are importers. It seems to
me the environmental and business groups ought to sit down and
talk or we are not going to have anything.
The environmental groups have to understand if we don't
have the manufacturing, we are not going to have the money to
invest in dealing with this. If you walk about 10 percent in
the United States, do you know they are building a lot more
coal-fired plants in China today. They are eating our lunch. If
we don't get our act together in the next several weeks, we are
going to do nothing.
For those of you in the environmental, Mr. Schneider, fine,
lawsuit after lawsuit, we do nothing. For those in the business
community, you don't know what you are doing so you just
flounder around and we on both counts don't get anywhere. What
about nothing? Say we can't come to an agreement and we can do
nothing, I guarantee you as chairman of this committee, we are
finished with this. We do something in the next 6 months or it
is over. We will stick with what we have and let it go and you
live with it, both of you.
What is your reaction? Do you want nothing, something?
What?
Mr. Harper. What I want as the CEO of my organization is
ability to meet the demands and requirements of the customers
that I serve. I can't do that if it takes 8 to 10 years to get
a new plant online. A lot of the reasons why gas was viewed
with a great deal of interest is because by the regulations you
can get one online quicker. Unfortunately most of the locations
that the gas turbines went in was near good transmission. They
didn't have to worry about some of the transmissions issues we
face. It all wraps itself around one issue, clarity, on what we
are trying to get accomplished. Basin Electric owns the only
commercial-scale gasification company in this Nation. We
understand gasification, we are looking at gasification, trying
to find all the different options out there available to us,
not being driven there but we think it is the right thing to
do. We have to meet the demands of our customers. When you take
the nine States our members serve, it goes from the largest
surface coal mine in the United States all the way to the
cattle rancher, they all need low cost energy. That is what we
are trying to get them. Again, time is money. We are very
interested in getting something accomplished.
Mr. Schneider. The dialog on this issue has been choked off
for several years. I remember the last best chance that we had
to get it together was when we were in this room 4 years ago.
It was
9/11. The chairman had pulled together the stakeholders from
the utility industry, governmental parties and the
environmental community to try to work out something to meet
all the different needs. That is the right type of process to
get anywhere.
The wrong process is to come in with a bill and tell
everybody it is my way or the highway. All those stakeholders
drifted in Washington, DC to hunker down for the next few days
and were never reassembled and never had another start at
dialog. It is a very important issue. My organization was
founded to deal with this issue. If people are willing to come
and talk about real reductions that improve the Clean Air Act,
that address climate change in a way that meets all the
objections and concerns you have, that is great.
We are not interested in a conversation about a bill that
rolls back the Clean Air halfway and doubles the time by which
we would get clean air in this country. We are willing today
any time, any place about a serious effort.
Senator Voinovich. I can tell you the disagreement over
climate change if it is part of this legislation means it is
going nowhere. If there is some compromise that could be made
on climate that wouldn't cap it or do something else as an
alternative to get started down the road and do some practical
stuff, I think there are some people willing to look at that,
even some members of the utilities. If the game is emissions or
nothing, it is nothing. That ain't going to help the Adirondack
Council or any of the others you talk about. The Council today
supports the legislation. They say we have to get going. A
couple years ago they supported it and the Clean Air Trust gave
them the villain of the month award because they didn't stick
to the game and go for the four pollutants. This has become
politicized to beat the band. In the meantime we are not doing
very much on either account, economy or in terms of the
environment.
Mr. Parady. I just wanted to note I just finished 10 years
of service in the Wyoming House of Representatives finishing up
as Speaker. One of the things I use in talks on this topic is
that the root of the words economic and ecology is the Greek
word eco or home and you have to have a prosperous economy in
order to have a healthy environment. Compare our environment to
conditions in China and recognize you have to be able to have
people at work and generate taxes and revenue and generate
investment funds necessary to achieve pollution control. That
takes a balance and I think this bill represents that balance.
Senator Voinovich. I want to thank you for being here
today. I don't think, Mr. Schneider, you should believe this is
take it or leave it. Senator Carper and I have known each other
a long time and we are going to struggle to see if we can't
come up with something where we can get something done and move
forward, get some certainty and will work at it. To all of you,
I have spent hours and hours and hours and so have a lot of us
and if we can't come up with some kind of compromise on this,
as far as I am concerned as chairman of the committee, it is
over. We will just let you fend for yourselves. I think that is
a good message to you, Mr. Schneider as a representative of the
environmental groups and the National Manufacturers
Association. There may have to be some changes here and there
between now and then. It is either nothing or we do something.
You have to decide is something better than nothing.
Thank you.
[Whereupon, at 1 o'clock p.m., the subcommittee was
adjourned, to reconvene at the call of the Chair.]
[Additional statements submitted for the record follow:]
Statement of Hon. Bob Young, Mayor, City of Augusta, GA, on Behalf of
U.S. Conference of Mayors
I am pleased to be with you today. My name is Bob Young; I am the
Mayor of Augusta, Georgia. I currently serve as the Chair of the
Conference of Mayor's Energy Committee and last year, I served as Chair
of the Environment Committee. These positions make me at least somewhat
familiar with the topic area of today's important discussion--energy
and clean air.
On behalf of the Conference's President, Akron Mayor Don
Plusquellic, I offer you his apologies in not being with you today. As
you know, he was suppose to be here testifying but fell ill yesterday
with a severe respiratory ailment. I offer his sincerest apologies in
not being able to make this hearing.
The U.S. Conference of Mayors is the official, nonpartisan
organization that represents cities throughout the nation through their
chief elected official, the mayor.
First of all I would like to thank Senator Voinovich for not only
his invitation to speak before you today but also for joining us last
week during the Conference of Mayor's Winter Meeting. Your commitment,
Senator, to issues such as Community Development Block Grants and
unfunded mandates is greatly appreciated by the mayors of this nation.
I come before you today not as an expert in clean air policy, but
as a mayor. This means that I am responsible for a wide variety of
activities including: keeping my citizens safe, keeping their
surrounding environment clean and attractive, making sure the roads are
maintained and that the snow gets plowed. It also means doing what I
can to keep and attract new jobs to the area.
When my job is boiled down, I guess that you can say that I am
responsible for making my city a place that is desirable for both
people and businesses to flourish. Every mayor strives to create a
community that has healthy citizens with a healthy economy. And I think
with some common sense, you can have both.
That is why I am here today. In order to remain competitive, this
nation needs a steady, reliable, and inexpensive source of energy.
However, we also need clean and healthy air.
outline of problem
Depending upon the type of business, a number of conditions
influence their decision to locate or expand in a community. Issues
such as workforce availability, access to transportation hubs, and of
course the costs of electricity are factors in their decisionmaking
process.
Besides the cost and reliability of electricity, another factor
that goes into a business location or expansion decision is a
communities' attainment status.
Many communities throughout the nation have been designated as non-
attainment areas for either ozone or particulate matter. I was
originally suppose to be designated in nonattainment for ozone but when
the final numbers came out, I was fortunately not included. Many of my
other mayoral colleagues were not as lucky.
When it appeared that my city was going to be designated as
nonattainment for ozone, my city volunteered for EPA's Early Action
Compact. This program allows cities, counties and states to go through
a series of voluntary measures to reduce air pollution that causes
nonattainment. I want you to know that even though we were fortunate to
not get designated, we are still going through this voluntary program
to demonstrate our commitment to clean air.
And the reasons why we are committed to clean air is not only
because of the health of our citizens but it is a good business
decision as well.
Many businesses won't outright admit it but privately they have
said that when making a decision to locate or expand in an area, one of
the things they do is to find out that community's attainment status.
If a community is in nonattainment, businesses know that to get the
necessary air permits might be difficult and sometimes it just makes
sense to seek out another area to build.
Both the cost of electricity and a city's attainment status puts
many communities at a competitive disadvantage to attract businesses
from other parts of the United States or even the world.
These factors can have a major impact on jobs and job creation.
However, the mayors of this nation don't want to sacrifice public
health for cheap electricity. We are looking for a fair and balanced
approach that cleans our air while keeping costs down.
We are looking for common sense solutions to help us meet our
attainment requirements.
As I mentioned before, many communities have been designated as
nonattainment for particulate matter or ozone or both.
These communities and the states they are located in are required
by the environmental protection agency to meet attainment standards
between 2008 and 2015.
Programs such as CMAQ, the Congestion Mitigation Air Quality
program, as well as the off-road diesel rules have been developed to
assist us with our efforts. And these programs should be maintained or
in the case of CMAQ, increased to further our efforts.
However, these programs are not enough. For many nonattainment
communities, 40 percent of their air pollution comes from coal-fired
utilities. That is a major source of pollution. We need a common-sense
solution that requires these utilities to install pollution control
equipment in a manner that is timely and cost-efficient.
our policy
The Conference of Mayors passed a policy resolution in 2003 calling
on the federal government to address this problem.
Our policy asks that the federal government set national air
emission caps under a multi-pollutant plan at levels strong enough to
protect public health and the environment by substantively assisting
cities in our efforts to attain the national ambient air quality
standards.
We support a comprehensive and synchronized multi-pollutant,
market-based program to reduce regulatory costs, maintain reliable
energy at a reasonable cost for consumers, and to provide regulatory
certainty to the electric power sector.
We encourage Congress to pass national legislation, which will meet
the Conference of Mayors' goals by requiring power plants to reduce air
emissions of sulfur dioxide, nitrogen oxides, and mercury by an average
of 70 percent from 2000 levels by 2020 under a proven market-based cap
and trade program.
It is my understanding, Senator that you have introduced
legislation that reflects many of the concerns of Mayors. We support
many of the goals of your legislation. We do need national policy to
encourage utilities to reduce NOx, SO<INF>2</INF>, and mercury by 70
percent and the utilities do need certainty to know what regulations to
expect and when to expect them by.
Also, given the success of the acid rain program, we think that a
multi-pollutant cap and trade program is potentially the best means of
achieving success.
conclusion
I want to applaud you Senator and the members of this committee for
holding this hearing on this important issue. The Mayors are pleased
that Congress recognizes that power plant emissions are a major source
of pollution in our nation, often preventing cities from reaching clean
air goals.
The Mayors look forward to working with the committee on
legislation that will improve air quality for our nation's cities.
For the nation's mayors, we need as many tools as possible to
assist us with our efforts to have reliable and inexpensive energy
while meeting our attainment standards and providing our citizens with
healthy air.
A national policy is needed to deal with air pollution from
utilities. We are asking Congress to address this issue at the national
level while at the same time asking them not take away our ability at
the state and local level to implement what may be needed on a more
localized basis.
Thank you again for your efforts. I look forward to working with
you and the other members of this committee on this important topic.
______
Response by Mayor Bob Young to Additional Question by
Senator Voinovich
Question. Several members of the Committee have proposed multi-
emissions bills. The Energy Information Administration analyzed the
bills proposed by Senators Jeffords, Carper, and Inhofe and found that
electricity and natural gas costs are substantially higher in the
Jeffords and Carper bills compared to the Inhofe Clear Skies bill. In
terms of your city--and cities across the country--what would be the
impact of increased electricity and gas costs on businesses? What about
those on fixed incomes?
Response. The impact of increased electricity and natural gas costs
on businesses as well as those with fixed incomes would have far-
reaching consequences. The United States needs a reliable, inexpensive
source of energy for both businesses and for people with fixed incomes.
Energy costs are just one of the factors that cities and counties need
to keep in mind in order to remain competitive for jobs. High energy
costs also have the possibility of driving businesses away from a
community in favor of other markets throughout the nation or in other
parts of the world. However, as I mentioned in the testimony, there
needs to be a delicate balance between inexpensive energy and public
health and the subsequent costs. It is important to keep energy
affordable and clean so that there doesn't need to be a choice between
jobs and public health.
______
Responses by Mayor Bob Young to Additional Questions from
Senator Jeffords
Question 1. According to the U.S. Conference of Mayors 2002
resolution, which has not been revised or reversed, the Mayors'
position is that until any new programs have been proven over time to
be as protective as current Clean Air Act programs, they encourage EPA
and Congress to keep those programs in place, with multi-pollutant
legislation as an addition to current clean air law. Obviously, S. 131,
the Clear Skies Act of 2005, as well as its predecessors, S. 1844 and
S. 485 in the 108th Congress, and S. 2815 from the 107th Congress,
eliminate many of the current Clean Air Act Programs without providing
time to prove that replacement programs are protective. Is the 2002
resolution still operative, and, if so, do the Mayors support
legislation that violates the principles in that resolution?
Response. Please note that your question needs to be corrected--the
Conference does have a 2002 resolution but another resolution was
passed in 2003 that dealt with the same topic. Irregardless, the
Conference of Mayors has never officially endorsed the Clear Skies Act.
According to the testimony, based on the 2003 resolution, Mayors
support some of the goals of Clear Skies; specifically a 70 percent
reduction for NOx, SO<INF>2</INF> and mercury, using a proven market-
based program. Our 2003 resolution also states that these goals should
be achieved by 2020.
Question 2. S. 131 allows ``transitional areas'' to be exempt from
the requirements of the Clean Air Act. What requirements should these
``transitional'' areas have to ensure that they are not causing or
contributing to non-attainment downwind from them?
Response. We are not able to answer that question at this time
without further internal discussion.
Question 3. Should downwind states retain their existing ability
under the Clean Air Act, with EPA enforcement of that ability, to seek
reductions in pollution from all sources in upwind states that are
causing or contributing to violations of the ambient air quality
standards in parts of the downwind state?
Response. The Conference of Mayors believes it would be prudent for
states to retain their existing ability to seek reductions from sources
in other states. We also are hopeful that this would not be necessary
given the cap and trade program proposed by all of the multi-pollutant
legislation.
Question 4. Should we amend the Clean Air Act to delay the existing
attainment deadlines therein? If so, why?
Response. The Conference of Mayors is not looking to amend the
Clean Air Act as much as looking for the necessary flexibility so that
cities can meet their attainment deadlines. If, for example, a city is
able to meet their attainment deadline once the utilities finish their
pollution-control upgrades, we believe that this factor should be taken
into consideration.
Question 5. Do the Mayors believe that it is prudent to increase
greenhouse gas emissions?
Response. Given the fact that Mayors have called for cities
throughout the United States to voluntary reduce their own greenhouse
gas emissions by 10 percent, it is probably not prudent to increase
greenhouse gas emissions.
Question 6. The Energy Information Administration has produced an
analysis which demonstrates that Clear Skies (S. 1844) does not achieve
the ``magic'' 70 percent reduction in any of the pollutants that you
mentioned before 2025, if then. In any event, what good will a 70
percent reduction in 2020 do for cities that need to achieve attainment
about 10 years earlier?
Response. The Conference of Mayors is assuming and hoping that the
utilities will act sooner than the 2020 deadline and there will be
overall reductions. We are also looking for the flexibility that may
come with the section on ``transitional communities'' which will allow
cities that are awaiting their utilities to retrofit their facilities
the additional time to come under compliance. However, if the utilities
do not act sooner than their 2020 deadline and no flexibility is given
to those transitional communities, the reduction may not prove useful.
Question 7. Since power plants and all the other major industrial
facilities emitting NOx, SOx or mercury can ``opt-in'' to the
regulatory shield in S. 131 and therefore cannot be effectively or
easily controlled by states or local governments, what sources of
emissions will states and local governments be going after to achieve
healthy air?
Response. Our policy only calls for power plants to be included in
legislation that reduces NOx, SO<INF>2</INF> and mercury. It does not
address other major industrial sources from being included. If,
however, they were included, the reduction would obviously depend on
state by state and what sources are emitting NOx, SO<INF>2</INF>, and
mercury. Of course our jobs will be much more difficult since many of
these sources have already been controlled which leaves us very few
options.
Question 8. Do the Mayors support the exemption of major sources of
toxic air pollutants from the existing MACT requirements of the Clean
Air Act? Do the Mayors support the exemptions for such sources, other
than power plants, included in S. 131?
Response. No we do not support the exemption of major sources of
toxic air pollutants from the existing MACT requirements nor do Mayors
support the exemptions for other sources other than power plants.
Question 9. What would be the change in the City of Augusta's
budget for indigent health care if Congress passed legislation, such as
S. 131, to delay the attainment of health-based air quality standards,
to exempt major sources of pollution from current requirements, and to
allow the designation of ``transitional areas'' that would have no
responsibility to reduce their own pollution even if it were affecting
downwind sources?
Response. Given the time and resource constraints that are needed
for this question, we can not possibly answer that question at this
time.
Question 10. You indicated that ``. . . there is nothing we can do
as a community or the State environmental regulators in Georgia can do
to impact what goes on at a coal-fired plant in South Carolina.'' That
statement is not accurate under current law, since the State of Georgia
has the right to petition the EPA under section 126 of the Clean Air
Act to control that source of pollution, even if it's a power plant, if
it is causing or contributing to nonattainment in the City of Augusta.
That right would be severely limited by S. 131 if not completely
crippled for many years, and EPA would not have the authority that it
has now to stop that pollution. Do you think that states should
continue to have the rights they have now, including Federal
enforceability, under the Clean Air Act to prevent interstate
pollution?
Response. What I meant by my statement is that there is nothing the
City of Augusta can do to impact South Carolina's coal-fired plant. I
am aware that the State of Georgia can petition South Carolina to
reduce their pollution. It is our hope that with a national cap and
trade policy that there would be overall reductions in NOx,
SO<INF>2</INF> and mercury and that more utilities would be motivated
to install pollution control systems. However, if this does not work,
we think states should still have the right to petition to prevent
interstate pollution.
______
Responses by Mayor Bob Young to Additional Questions from
Senator Lautenberg
(Please note that the questions were addressed to the Mayor of
Akron, Don Plusquellic. He, however, did not testify due to illness and
Augusta Mayor Bob Young took his place.)
Question 1. The U.S. Conference of Mayors policy states that multi-
pollutant legislation should be an addition to current law, why do you
support Clear Skies which eliminates key Clean Air Act programs?
Response. The Conference of Mayors has never officially endorsed
the Clear Skies Act. We support some of the goals of Clear Skies
including a 70 percent reduction in NOx, SO<INF>2</INF> and mercury by
2020 using a cap and trade program.
Question 2. Wouldn't it be prudent to enact multi-pollutant
legislation as an add-on to existing law as a way of bolstering EPA's
authority?
Response. As long as there is no conflicting policy or confusion
that will result with adding on existing law that would delay utilities
from installing pollution control equipment, it would probably be
prudent to add-on to existing law.
Question 3. The Clear Skies Initiative would extend attainment
deadlines for meeting PM<INF>2.5</INF> and ozone health standards to
2015 and as late as 2022. Why should we allow this?
Response. We do need to allow for adequate time for pollution
control equipment to be manufactured and installed. The Mayors' policy
simply reflects the understanding that it might take some time for this
to happen. If it can be done sooner or if incentives could be provided
to encourage utilities to not delay, the Mayors would welcome quicker
results.
Question 4. If we can reduce air pollution faster and reduce
premature death and hospitalization sooner shouldn't we do so?
Response. As mentioned in the testimony, it is a delicate balance
between public health and the economy. Mayors believe that policymakers
can and have to balance both. We need a policy that reduces air
pollution but not one that drastically increases the costs of
electricity that causes jobs to move out or for citizens to have to
choose between heat and food, for example. One needs to ask the health
impact of a loss of a job and health insurance to a citizen's overall
health as well. The reverse is also true. Mayors believe that you do
not need to sacrifice public health for inexpensive electricity.
Question 5. The Akron Beacon Journal asserts implementing the CAIR
rule is a better strategy for protecting public health than enacting
controversial new legislation. Do you agree?
Response. Mayor Plusquellic did not testify. As far as the CAIR
rule being a better strategy for protecting public health, it has been
said that it will do a good job in reducing NOx, SO<INF>2</INF>, and
mercury. However, we believe that it is better for legislation to be
passed as opposed to a rule since it is developed by Congress and less
subject to judicial scrutiny.
Question 6. Clear Skies, as introduced by Senator Inhofe (S. 131),
repeals Maximum Available Control Technology standards to control 189
hazardous air pollutants from power plants and possibly a broad variety
of industrial boilers simply because they reduce mercury emissions.
Knowing the lifelong health problems exposures to toxic chemicals can
cause--especially in children--why should Congress support this?
Response. The Conference of Mayors does not support the repeal of
the MACT standards.
Question 7. If Congress passes legislation as controversial as the
Clear Skies Act that allows existing Clean Air Act programs to be
abandoned and deadlines to meet health standards to be extended to
2022, won't this generate more litigation than implementing the
existing law?
Response. It is definitely possible that more litigation will
result as is typical whenever new laws and rules are passed.
__________
Statement of John A. Paul, Supervisor, Regional Air Pollution Control
Agency, on Behalf of STAPPA/ALAPCO
Good morning, Mr. Chairman and Members of the Subcommittee. My name
is John Paul, and I am the Supervisor of the Regional Air Pollution
Control Agency, a six-county local agency centered in Dayton, Ohio. I
am pleased to testify today on behalf of STAPPA--the State and
Territorial Air Pollution Program Administrators--and ALAPCO--the
Association of Local Air Pollution Control Officials, the national
associations of air quality agencies in 53 states and territories and
more than 165 metropolitan areas across the country. I currently serve
as Vice President of ALAPCO and Co-Chair of the STAPPA/ALAPCO Energy
Committee. The members of our associations have primary responsibility
under the Clean Air Act for implementing our nation's air pollution
control laws and regulations and, moreover, for providing clean,
healthful air for our citizens. Accordingly, we are pleased to have
this opportunity to provide our perspectives on the need for
legislation to control multiple emissions from electric utilities.
we have made substantial progress in cleaning up our air, but
significant challenges remain
Over the past three and a half decades, since authorization of the
first federal Clean Air Act, the United States has made substantial
progress in reducing air pollution, while, at the same time,
experiencing strong economic growth. In fact, since 1970, aggregate
emissions of the six criteria pollutants have decreased by 51 percent.
During this same time, Gross Domestic Product has increased by 176
percent, energy consumption by 45 percent, vehicle miles traveled by
155 percent and the U.S. population by 39 percent. However, our nation
continues to face significant public health and environmental problems
as a result of emissions into our air.
Last year, all or part of nearly 500 counties were designated as
nonattainment for the 8-hour ozone standard and earlier this month the
U.S. Environmental Protection Agency (EPA) published a notice in the
Federal Register designating 225 counties, in whole or in part, as
nonattainment for the fine particulate matter (PM<INF>2.5</INF>)
standard. Further, fish consumption advisories have been issued for
some or all of the water bodies in at least 45 states due to elevated
concentrations of the persistent and bioaccumulative pollutant mercury,
which can contaminate aquatic life and pose a serious threat to humans
who consume the contaminated species. In addition to contributing to
tens of thousands of premature deaths and innumerable adverse health
consequences, emissions into our air also cause such damage to our
environment as visibility impairment, eutrophication of waterways and
acid rain.
Emissions From Electric Utilities Are a Key Contributor to Air
Pollution
Electric utilities are the largest remaining stationary source of
air pollution in the United States, an order of magnitude greater than
the second largest category, refineries. According to EPA and others,
power plant emissions each year are responsible for over 20,000
premature deaths. Additionally, according to a recent study by the
Clean Air Task Force, power plant emissions cause over 38,000 heart
attacks, more than 3 million lost work days and in excess of half a
million asthma attacks.
Nationally, utilities are responsible for 68 percent of annual
sulfur dioxide (SO<INF>2</INF>) emissions and 23 percent of nitrogen
oxide (NOx) emissions. Further, it is important to note that in some
areas of the country, power plant contributions to SO<INF>2</INF> and
NOx levels are considerably higher. Add to these no fewer than 67
hazardous air pollutants (HAPs), which power plants also emit in
substantial quantities, including mercury, for which electric utilities
account for 41 percent of the nation's emissions. In addition, electric
utilities are responsible for 39 percent of U.S. carbon dioxide
emissions, which contribute to global warming.
The magnitude of emissions from power plants, and the serious
public health and welfare implications these emissions have, make
controlling electric utilities a top priority. In fact, broad, rigorous
control of this sector is crucial to the success of state and local
efforts not only to attain health-based air quality standards in a
timely manner, but also to ensure maintenance of these standards into
the future.
An additional concern is the age of the coal-fired boilers
operating across the country. Today, nearly three-quarters of all
utility boilers are over 30 years old and most continue to operate
without modern pollution control technology; in 10 years, almost 90
percent of all boilers will exceed 30 years of age. Among the most
important steps we, as a nation, can take to address air pollution and
protect public health is to establish a comprehensive national multi-
pollutant approach for cleaning up these outdated power plants and
ensuring that new plants are dramatically cleaner.
stappa and alapco strongly support an effective multi-pollutant
approach for power plants
STAPPA and ALAPCO endorse the concept of a comprehensive national
strategy for reducing emissions of multiple pollutants from electric
utilities. Such an approach could enhance opportunities for pollution
prevention and sustainability and promote more expeditious compliance.
A comprehensive, integrated approach would also offer important
advantages to the regulated community in the form of increased
certainty and cost efficiencies. Further, it would increase certainty
and efficiency for state and local air quality regulators, both in
terms of the development of our programs and in fulfilling our
obligation to ensure clean, healthful air to our citizens.
In May 2002, as various multi-pollutant proposals were emerging,
STAPPA and ALAPCO adopted a set of principles (copy attached) outlining
what we believe should serve as the foundation of a viable national
multi-pollutant strategy for power plants.
In our principles we call for an integrated approach based on an
expeditious schedule, including interim compliance dates, that will
allow us to reduce emissions as quickly as we can and consistent with
the deadlines by which states and localities are required to meet
health-based air quality standards. We believe firmly that such an
approach--which should address all significant emissions from electric
power generation--should supplement, not supplant, the existing Clean
Air Act. Programs such as New Source Review (NSR), Maximum Achievable
Control Technology (MACT) standards and regional haze, as well as other
important statutory tools and requirements for achieving and sustaining
clean air, must be retained.
In addition, a viable multi-pollutant approach should establish the
most stringent enforceable national emission reduction goals feasible.
In particular, we recommend that national emissions caps be set at
levels that reflect the installation of technology no less stringent
than the best available controls on all existing units nationwide, with
each existing plant required to meet a minimum level of control by the
final compliance deadline. We further believe that in meeting these
emission goals, the regulated community should be afforded flexibility,
including an emissions trading mechanism for NOx and SO<INF>2</INF>,
with appropriate limitations and protections against local adverse
health or environmental impacts. And, very significantly, any multi-
pollutant strategy must ensure that regions, states and localities
retain their authority to adopt and/or implement measures--including
local offset and technology requirements--that are more stringent than
those of the federal government.
STAPPA and ALAPCO used the associations' adopted principles to
evaluate S. 1844, the Chairman's Mark of the Administration's Clear
Skies proposal, introduced on November 10, 2003. After careful study,
we have concluded that the proposal fails on every one of our
associations' core principles. The deadlines are too protracted, and
well beyond those by which we must, and should, meet health-based air
quality standards. The caps are simply not protective enough, and there
is no minimum level of control required of each existing power plant.
And we have tremendous concerns with the fact that this proposal strips
away many of our most essential Clean Air Act tools and authorities.
Accordingly, STAPPA and ALAPCO can not support this proposal.
Although we would prefer that a multi-pollutant approach be
established through legislation rather than regulation, given the
serious deficiencies of this legislative proposal, we believe that
continued implementation of the Clean Air Act will provide far greater,
and more certain and timelier protection of public health and the
environment. Toward this end, we have availed ourselves of every
opportunity to provide EPA with our comments and recommendations to
improve the two rules it has proposed--the Clean Air Interstate Rule
and Utility MACT Rule--using its authorities under the existing Clean
Air Act to address NOx, SO<INF>2</INF> and mercury.
stappa and alapco have significant concerns with s. 1844
I would like to elaborate in a bit more detail on some of our key
concerns with the multi-pollutant approach established in S. 1844.
Deadlines
S. 1844 would postpone until 2018 the final date for industry
compliance with the NOx, SO<INF>2</INF> and mercury caps. Moreover,
compliance will be deferred even further--to the mid-2020s--due to the
impacts of the bill's credit banking and trading program. For mercury,
this protracted compliance schedule is about 15 years later than
Congress allowed under the Clean Air Act for utilities and other
sources to comply with MACT. And for NOx and SO<INF>2</INF>, it is not
only nearly a decade later than state and local attainment deadlines,
it is also clearly counter to the Clean Air Act requirement for
attainment as expeditiously as practicable. Since each year of delay
will take an additional and unwarranted toll on public health and
welfare, the solution is not to defer public health deadlines but,
rather, to accelerate industry compliance dates. For this reason, we
are also concerned with the bill's transitional area provisions, which
could impede timely implementation of state and local regulatory
initiatives and interfere with EPA's recent 8-hour ozone and
PM<INF>2.5</INF> nonattainment designations. In an analysis conducted
last year, which I will discuss further in a moment, our associations
concluded that an interim compliance date of 2008 and a final
compliance date of 2013 are appropriate and feasible deadlines for the
type of national multi-pollutant approach we envision.
Caps
As I have already noted, we believe the caps in S. 1844 are far too
lenient and do not reflect what is necessary and achievable for this
source sector. Last spring, our associations completed a deliberative
analysis (copy attached) of our multi-pollutant principles--
specifically, estimating what national caps could result from
application of those principles, which call for installation of best
available controls on electric utilities. What we found is that
application of air pollution control technologies consistent with what
various states across the country have committed or proposed to
implement over the next decade (i.e., through state permits, court-
ordered settlements agreements or state regulations) would achieve NOx,
SO<INF>2</INF> and mercury caps that are significantly more protective
than those in S. 1844, remain cost effective and still provide a
reasonable margin of flexibility and opportunities for increased power
generation.
With respect to NOx, our analysis identifies an interim cap of
1.51-1.87 million tons per year (tpy) by 2008 and a final cap of 0.88-
1.26 million tpy by 2013, compared to S. 1844's NOx caps of 2.1 million
tpy by 2008 and 1.7 tpy by 2018. For SO<INF>2</INF>, our analysis
identifies an interim cap of 3.0-4.5 million tpy by 2008 and a final
cap of 1.26-1.89 million tpy by 2013, compared to S. 1844's
SO<INF>2</INF> caps of 4.5 million tpy by 2010 and 3.0 million tpy by
2018. A regional SO<INF>2</INF> cap for Western States should not
interfere with the regional haze rule's SO<INF>2</INF> annex. And for
mercury, our analysis identifies an interim cap of 15-20 tpy by 2008
and a final cap of 5-10 tpy by 2013, compared to S. 1844's caps of 34
tpy (which is even weaker than the already-too-weak 26-tpy cap
originally included in Clear Skies) in 2010 and 15 tpy in 2018.
Our concerns regarding S. 1844's weak caps are further compounded
by the inclusion in the bill of provisions for early reduction credits.
Although we favor early reductions and encouraging sources to reduce
emissions as soon as possible, we firmly believe that if early
reduction credits are provided, the use of such credits must be
appropriately limited. However, because S. 1844 would provide credits
for early reductions above the cap without limit, the already weak
emission caps will be further diminished. The bill exacerbates this
concern by granting early reduction credits above the cap and without
limit to so-called ``opt-in'' units--non-utility industrial units that
may elect to be designated as affected units--thereby ensuring that the
bill will not achieve even its own claims regarding the levels of
required reductions from the utility sector. This opt-in feature also
appears likely to push back achievement of the 70 percent reduction
targets even past mid-2020.
EPA has estimated the benefits of Clear Skies to be $110 billion at
a cost of $6 billion--a benefit-to-cost ratio of about 20:1. Clearly,
then, more rigorous and timely caps would not only yield substantially
increased benefits, but could do so while still remaining very cost
effective. In contrast, leaving such a significant level of feasible,
cost-effective emission reductions behind--as S. 1844 does--comes at a
very high cost. It will be difficult to return to the utilities to seek
further reductions once the program is put into place, and because air
pollution control is a zero-sum calculation, we will be forced to seek
those reductions from other sources--including ones that are already
well regulated and/or for which controlling emissions is far more
costly and less cost effective, such as small businesses--and through
strategies that may be publicly unpopular. Such an alternative is not
only unfair to those sources doing their fair share to clean up our
air, it may well not result in sufficient emission reductions, leaving
our nation with a serious environmental and public health problem and
few tools to adequately address it.
Statutory Rollbacks
As troubling as these problems are, of even greater concern to us
is the fact that S. 1844 abolishes some of the most important statutory
tools and requirements for achieving and sustaining clean air.
Contrary to STAPPA and ALAPCO's firm belief that new and existing
power plants must continue to be subject to NSR, S. 1844 repeals this
important program for affected sources, including requirements for new
units to install state-of-the-art Lowest Achievable Emission Rate
control technology and acquire emission offsets in nonattainment areas,
and install Best Available Control Technology and protect air quality
increments to guard against adverse local air quality impacts in
attainment areas. Existing sources making major modifications should be
required to install the best available controls on affected units at
the time of modification, acquire any emission allowances required to
address emission increases and ensure against adverse local health or
environmental impacts. However, in place of all this, S. 1844 regresses
to seriously outmoded New Source Performance Standards (NSPS) and,
further, rescinds requirements to update the NSPS on a periodic basis.
Further, this bill would allow non-utility units from other industries
to qualify for this same regulatory relief, as well.
S. 1844 also eliminates all the requirements of sections 169(A) and
(B) of the Clean Air Act, including not only Best Available Retrofit
Technology (BART) requirements, which the original Clear Skies bill
repealed, but all visibility requirements and regional haze rules.
Further, it revokes many Prevention of Significant Deterioration (PSD)
requirements and relaxes protections for Class I areas. Moreover, the
bill also includes provisions that prevent states from taking credit in
their State Implementation Plans for any NSR or PSD requirements they
seek to apply to affected units. Opt-in units would also be able to
take advantage of these relaxations.
With respect to toxic air pollutants, S. 1844 repeals the utility
MACT rule, including the regulation of non-mercury HAPs, and rescinds
residual risk requirements for HAPs, which, under current law, protect
the public with an additional margin of safety following application of
stringent technology requirements. Once again, the bill would allow
non-utility opt-in units to escape these requirements.
The bill also seriously undermines states' abilities to protect air
quality in their jurisdictions by prohibiting compliance with any
petition under section 126 until 2014. Further, it impedes potential
use of this important authority by requiring a downwind area to first
demonstrate that all more cost-effective measures have been
implemented--a process that will surely result in delay and lead to
litigation. In addition, EPA is prevented from exercising its authority
to issue a SIP call under section 110 until 2014.
conclusion
Once again, I would like to reiterate that STAPPA and ALAPCO
endorse a national multi-pollutant approach for power plants. Such a
program should institute appropriately rigorous emission reductions on
a timely schedule and compel use of state-of-the-art technology. We are
disappointed that S. 1844 not only falls far short of our associations'
adopted principles, but also strips states and localities of our
critical tools and authorities for providing clean, healthful air. On
behalf of STAPPA and ALAPCO, I thank you for this opportunity to
present our associations' views on this very important issue. We look
forward to working with you in the weeks ahead.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Responses by John A. Paul to Questions from Senator Voinovich
Question 1. Your testimony states that ``. . . continued
implementation of the Clean Air Act will provide far greater and more
certain and more timely protection of public health and the environment
[than S. 131].'' Has litigation ever delayed implementation of any
Clean Air Act requirements? Please explain how your statement takes
into account the possibility of implementation delays due to
litigation. Do you expect litigation over EPA's final regulations in
the Clean Air Interstate Rule, Clean Air Mercury Rule, and Regional
Haze Rule? Do you think litigation could delay the implementation of
these rules?
Response. STAPPA and ALAPCO are concerned about any delays that
would impede successful achievement of our primary goal of attaining,
as expeditiously as practicable, and maintaining health-based air
quality standards. Delays due to protracted compliance dates are of key
concern relative to S. 131. Litigation can also cause delay and, with
respect to S. 131, is likely, given the controversial nature of this
program and its complexity. Further, under S. 131, EPA is required to
make a number of ``determinations'' over the next 15 years; each of
these determinations will he subject to judicial challenge at the time
they are made, with the possibility for delay each time.
Question 2. Your testimony states that ``. . . mercury emissions
have resulted in the issuance of fish consumption advisories in 45
States.'' Please provide a detailed comparison of the number of fish
consumption advisories expected under the bills proposed by Senators
Jeffords and Carper with the number of advisories under Clear Skies.
Response. The reference in STAPPA and ALAPCO's testimony to the
number of fish consumption advisories due to mercury contamination was
obtained from EPA's National Listing of Fish Advisories (please refer
to http://epa.aov/waterscience/fish/advisories/index.html for
additional information). We have not analyzed the impact of proposed
legislation on the number of fish advisories expected nor are we able
to make such a projection.
Question 3. Your testimony states that ``most of the litigation is
from the utility industry.'' Would you please provide detailed
information to support your statement, including a list of non-utility
litigants in each of those cases?
Response. My comment regarding litigation and the utility industry,
which was part of my response to a question from Senator Lautenberg
during the question and answer session, was in reference to the level
of litigation involving utilities, particularly related to New Source
Review.
Question 4. In a 2004 report (``Air Quality Management in the
United States'') the National Research Council--part of the National
Academy of Sciences--stated: ``The implementation of air quality
regulations should be less bureaucratic--with more emphasis on results
than process . . .'' Do you disagree with Council?
Response. No, we do not disagree with the National Research
Council's statement--the ultimate success of state and local air
pollution control agencies' efforts to achieve as expeditiously as
practicable and sustain clean air will be determined by results.
However, the process in which we engage as we work toward our goals
will have a significant bearing on our ultimate success. We note that
much of the bureaucracy that frustrates implementation efforts is due
to the complexity of regulations that seek to provide the regulated
community with flexibility.
______
Responses by John A. Paul to Additional Questions from Senator Inhofe
Question 1. In previous appropriations measures, members of both
the House and Senate Appropriations Committees have expressed concerns
over the U.S. Environmental Protection Agency's misappropriation of
Clean Air Act 105 grant funds to ``activities and national
associations'' taking away from grant funds statutorily designed to be
awarded to state and local governmental air agencies. Prior concerns
have been expressed in at least the following two reports.
``The Subcommittee is concerned that EPA has been
inappropriately setting aside and spending portions of Section
105 air grants to support activities that were historically
funded and should continue to be funded through EPA's own
budget (i.e., not federal grant funds intended for state and
local air agencies). In the fiscal 2001 budget, EPA was
intending to use Section 105 grants to support training
activities, an emission inventory improvement program and a
heavy-duty truck and bus idling study, for example. These are
very important activities that should be funded; however, the
resources to support them should not be taken from state and
local air grants.
EPA's practice of setting aside and spending Section 105
grants, rather than distributing them to state and local air
agencies, is particularly troublesome because the Agency has
decided to make these expenditures unilaterally. There are
certainly instances in which it is expeditious for EPA to
withhold grant funds from state and local agencies to be spent
at the national level, including making equipment purchases on
behalf of state and local air agencies or to pay for projects
or activities that state and local agencies have decided to
support collectively and for which it is administratively more
advantageous to have EPA fund directly. However, the decision
to withhold state and local grant funds for expenditure
directly by EPA should only be made after conferring with state
and local air agencies and obtaining their concurrence. This
should be done only for activities that are the responsibility
of state and local air agencies.
In this fiscal year and in the future, the Committee directs
EPA to fund activities such as those identified above (i.e.,
training, the emission inventory project, the heavy-duty bus
and truck idling study), and similar activities that are
federal responsibilities, from within the agency's own budget
and to allow state and local agencies to use the funds that
Congress has earmarked for the many important responsibilities
facing them. Additionally, in fiscal 2001 and in the future,
EPA should withhold state and local grant funds at the national
level to pay for activities or programs only if such activities
are efforts that will benefit state and local air agencies, if
the activities are the responsibility of state and local air
agencies and if state and local air agencies have provided
their concurrence.'' (Emphasis added).
h.r. rep. no. 106-674, departments of veterans affairs and housing and
urban development, and independent agencies appropriations bill, at 61-
62 (2001).
``In addition, the Committee directs the EPA not to use any of
the funds appropriated or otherwise made available in this Act
to make a direct assistance grant to a national association or
group of associations whose membership includes State program
administrators without such association or group of
associations first obtaining written approval from each member
State. If one or more member States do not give their advance
approval, EPA may make the direct assistance grants to the
association with an amount deducted from the total available
direct assistance grant amount based on the States' population
as a percentage of the total membership's population times the
available amount and direct those deducted funds to the
individual States.'' (Emphasis added).
s. rep. no. 108-353, departments of veterans affairs and housing and
urban development, and independent agencies appropriations bill, at 111
(2005).
Question 1a. Please provide copies of all written approvals from
each member state and local governmental agencies indicating permission
to withhold financial assistance under any environmental statute to be
directly provided to STAPPA-ALAPCO.
Response. STAPPA and ALAPCO are familiar with the House and Senate
Appropriations Committee language that was quoted in the question. The
excerpt from H. Rept. 106-674 (2001) was not related specifically to
funding for national associations, but, rather, was in response to the
fact that EPA was setting aside and spending portions of Section 105
air grants on activities that the state and local air agencies did not
wish EPA to fund through federal air grants and that EPA should have
been using its own budget to support. These included certain training
activities, an emission inventory project and a mobile source study, as
identified in the report language. The language was designed to ensure
that EPA obtained the concurrence of state and local air agencies prior
to setting aside funds for those types of activities.
The second excerpt, from S. Rept. 108-353, pertained to fiscal year
2005 appropriations. However, the Conference Committee subsequently
superseded that passage in its report, stating ``The conferees have not
included language that directed EPA to deduct from grants to state
associations for a state that does not wish to participate in the
association, as proposed by the Senate. The conferees believe that
current recipients of such grants have administratively addressed this
issue.'' (H. Rept. 108-792).
Question 1b. Please provide copies of all documentation from
STAPPA-ALAPCO to member agencies disclosing their rights in providing
funding and dues to STAPPA/ALAPCO.
Response. On August 24, 2000 (and updated on December 15, 2003)
STAPPA, ALAPCO and EPA jointly developed a comprehensive document
explaining how the STAPPA/ALAPCO headquarters is funded and providing
details on how contributions from individual agencies are determined
and handled. This document, entitled ``Policy Statement on Funding the
Secretariat of the State and Territorial Air Pollution Program
Administrators and the Association of Local Air Pollution Control
Officials,'' which was shared with the Senate Environment and Public
Works Committee last summer, is enclosed for your convenience. This
document has been provided to the members of STAPPA and ALAPCO on
several occasions, most recently in November 2004.
Additionally, in May 1999, the members of STAPPA and ALAPCO adopted
a resolution instructing EPA to provide federal grants each year to
help support and operate the STAPPA/ALAPCO Secretariat and specifying
that the funds should be reserved from the national grant total, prior
to allocation to the EPA regions. This resolution is also enclosed for
your information.
Question 1c. Please disclose a listing of all STAPPA/ALAPCO member
agencies and the dues paid by each member agency to STAPPA/ALAPCO.
Response. The membership of STAPPA includes 48 states (Colorado and
South Dakota are not members), the District of Columbia and four U.S.
territories. Their financial support of STAPPA varies based on their
respective populations. ALAPCO includes more than 165 local air
agencies around the country. EPA maintains a listing of each state and
local agency's individual financial contribution to STAPPA and ALAPCO.
Question 2. Please disclose information regarding all federal
funding and assistance agreements including grants, cooperative
agreements, and contracts (herein after simply referred to as
assistance agreements) provided from any federal agency to STAPPA/
ALAPCO for the present fiscal year and five prior fiscal years. Such
information shall include copies of the assistance agreements, the
terms of the assistance agreements, the amounts of the assistance
agreements, documentation of expected deliverables, all documentation
indicating compliance with the terms of each assistance agreement, and
all documentation indicating whether each assistance agreement was
subject to competition prior to award.
Response. Please see enclosures.
Question 3. Please disclose all annual filings with the Internal
Revenue Service including annual Form 990 filings for STAPPA-ALAPCO and
the State and Territorial Air Pollution Program Administrators and
Association of Local Air Pollution Control Officials individually for
the most recent tax period and previous five tax periods. Such
disclosure shall include annual schedules of contributors and grants.
Response. Please see enclosures.
Question 4. Please disclose all annual financial statements for
STAPPA-ALAPCO and State and Territorial Air Pollution Program
Administrators and Association of Local Air Pollution Control Officials
individually for the previous five years.
Response. Please see enclosures.
Question 5. Please disclose copies of all STAPPA-ALAPCO by-laws
governing the ``rights of member agencies and explain the process by
which STAPPA-ALAPCO involves its member agencies in developing
organization positions and policy statements.
Response. Please see enclosures.
Question 6. Does STAPPA-ALAPCO have a position on regulating
CO<INF>2</INF>?
Response. STAPPA and ALAPCO do not have a position on regulating
CO<INF>2</INF>. One of STAPPA/ALAPCO's Principles for a Multi-Pollutant
Strategy for Power Plants, adopted in May 2002, is to ``address all
significant emissions from electric power generation.'' STAPPA and
ALAPCO have two resolutions related to greenhouse gas emissions: a
Resolution on Early Reduction of Greenhouse Gas Emissions, adopted in
October 1998, and a Resolution on Global Climate Change, adopted in
October 1997. These principles and resolutions are enclosed.
______
Responses by John A. Paul to Additional Questions from Senator Jeffords
Question 1. Should we amend the Clean Air Act to delay the existing
attainment deadlines therein? If so, why?
Response. No.
Question 2. Based on the States' experience and data, what are the
lowest cost control options available to achieve attainment with the
ozone and fine particulate matter air quality standards by the
deadlines in the Clean Air Act?
Response. As noted in our testimony, utilities are responsible for
68 percent of annual SO<INF>2</INF> emissions and 23 percent of NOx
emissions. By an order of magnitude, they are the most cost-effective
category of sources to control because of their contribution to
pollution, their size and the ready availability of control
technologies. Local control measures are not as cost-effective--nor
will they be sufficient to attain the health-based ozone and fine
particulate matter air quality standards by the deadlines in the Clean
Air Act. As EPA explained in its analysis for the Clean Air Interstate
Rule, ``a substantial part of local emissions is attributable to mobile
sources, small business, and household activities for which practical,
large-reduction, and quick-acting emissions reductions measures could
not be identified at this time'' (69 Federal Register 4599, January 30,
2004). A strong national program to control electric utility steam
generating unit emissions is needed for states and localities to attain
the ozone and fine particulate matter air quality standards by the
deadlines in the Clean Air Act.
Question 3. EPA estimates that the 1990 Clean Air Act Amendments
may have already reduced some 70 million tons of pollution. Could you
compare the pollution that would be reduced by application of the
STAPPA principles and the amount reduced by S. 131 (or S. 1844) over
the course of the next 20 years?
Response. The difference in annual emissions between application of
the STAPPA/ALAPCO principle of best available controls and Clear Skies
can be estimated using the associations' analysis dated March 15, 2004,
which was attached to my written testimony and enclosed with this
response. Attachment 3 of that analysis summarizes the caps proposed in
key legislative proposals and EPA's 2001 straw proposal, and caps
achievable with today's best available controls as estimated in STAPPA/
ALAPCO's analysis. These technology-based cap ranges were calculated by
the associations using a range of reasonable best available control
technology determinations for retrofits of existing units. Focusing on
the final caps, following is the relevant comparison requested. In
general, today's air pollution control technology can achieve caps that
are about one-half the final caps in Clear Skies.
------------------------------------------------------------------------
Clear Skies Final Best Technology
Pollutant Cap Cap Range
------------------------------------------------------------------------
NOx............................. 1.7............... 0.88-1.26 million
tons/yr
SO2............................. 3.0............... 1.26-1.89 million
tons/yr
Hg.............................. 15*............... 5-10 tons/yr
------------------------------------------------------------------------
*Note that if the new Clear Skies de minimis exemption of 50 lbs of
mercury per year per unit is adopted, the resultant cap would be
greater than 27.5 tpy since there are about 1,100 coal-fired electric
generating units.
Following is the annual difference between Clear Skies and the
average of today's best retrofit technology range and what would be the
cumulative difference over a 20-year period:
------------------------------------------------------------------------
Annual Difference 20-Year Difference
in Caps in Caps
------------------------------------------------------------------------
NOx............................. 0.63 million tons/ 12.6 million tons
yr.
SO2............................. 1.43 million tons/ 28.6 million tons
yr.
Hg.............................. 7.5 tons/yr....... 150 tons
Hg*............................. over 20 tons/yr... over 400 tons
------------------------------------------------------------------------
* Difference in mercury emissions with the 50 lb/yr/unit Clear Skies
exemption.
Question 4. What impact is S. 131 likely to have on visibility and
regional haze?
Response. S. 131 dramatically weakens current provisions in the
Clean Air Act designed to improve visibility and reduce regional haze.
It would repeal not only the current Clean Air Act requirement that
affected facilities apply the Best Available Retrofit Technology to
protect visibility in national parks (retaining it only for sources
within 50 kilometers of a Class I park area), but all the requirements
of sections 169(A) and (B), pertaining to visibility and regional haze.
Congress in the Clean Air Act recognized that sources all over the
country--not just near Class I park areas--contribute to regional haze
and affect park visibility. Thus, the Clean Air Act requires, among
other things, that 26 categories of major sources put on control
technology if they emit any air pollutant which may reasonably be
anticipated to cause or contribute to any impairment of visibility in a
Class I area.
Question 5. Do you think it's appropriate for the EPA to go back in
time to reverse regulatory determinations, like they are proposing to
do on the mercury finding from 2000?
Response. No, we do not believe it is appropriate. The regulatory
determination was based on, among other things, the Mercury Study
Report to Congress (December 1997) and the Utility Air Toxics Study
(February 1998). These studies and other information the agency
gathered confirmed that it was ``appropriate and necessary'' for EPA to
establish regulations under Section 112 to control emissions of
hazardous air pollution from electric utility steam generating units.
Nothing has changed since December 2000 to make the establishment of
standards under Section 112 no longer ``appropriate and necessary.''
Question 6. What impact will S. 131 have on the States ability to
protect their citizens from transported pollution and unhealthy air
quality?
Response. S. 131 expressly rescinds important tools states and
localities have to address unhealthy air quality and transported
pollution. All sources participating in the emissions trading scheme
are exempted from NSR requirements until 2015, regardless of whether or
not these sources impact air quality in the area or downwind. States
are also prohibited from applying NSR to modified sources under their
EPA-approved SIPs, and even if they are able to retain a program as a
matter of state-law only, they cannot take credit for it in their
attainment or maintenance plans. This preempts more stringent state
programs. Section 3(a)(3) bars the application of any 126 interstate
air pollution remedy to affected facilities before 2014, thus
preventing states and localities from addressing transported air
pollution in sufficient time for attainment deadlines. More
importantly, it requires EPA to make a nearly impossible showing before
it can apply such a remedy--the remedy would only be available if EPA
determined that there were no other possible cost-effective measures to
apply to any other source category. S. 131 also prohibits states from
restricting electric steam generating units (EGUs) in their
jurisdiction from selling their allowances out-of-state. Accordingly,
if a state adopted more stringent emission caps instate, there is
nothing to prevent the EGUs from selling allowances to upwind EGUs,
thereby exacerbating transported air pollution.
Question 7. What impact could or would the ``transitional'' area
classification have on the existing system aimed at achieving the
health-based NAAQS?
Response. The ``transitional'' area classification will delay
achievement of the health based NAAQS. The Clean Air Act requires
attainment as expeditiously as practicable, with an outer date of 2010
(with the possibility of a five-year extension) for PM<INF>2.5</INF>
and with dates between 2007 and 2014 for most areas under the 8-hour
ozone standard. S. 131 provides that an area can be labeled
``transitional'' rather than ``nonattainment'' if it can use modeling
to show that it will attain these standards by 2015. Therefore, S. 131
automatically delays achievement of the NAAQS for several years at the
outset. In addition, labeling these areas ``transitional'' rather than
``nonattainment'' has the following implications: (1) these areas are
exempted from the statutory requirement to attain as expeditiously as
practicable; (2) these areas will have less stringent NSR requirements,
exempting all sources in the area--not just those participating in the
cap-and-trade scheme--from more stringent control and offset
requirements; and (3) there is no meaningful remedy for nonattainment--
if a state fails to attain by 2015, it merely needs to submit a SIP
showing it will attain by 2020 and is given until 2022 to attain.
Furthermore, to the extent these ``transitional'' areas are
transporting pollution downwind, less stringent cleanup requirements in
these areas and longer attainment deadlines will impede downwind areas'
ability to achieve the health-based NAAQS on a timely basis.
Question 8. What changes to the Clean Air Act would you recommend
to enhance the ability of areas to achieve attainment of the NAAQS more
quickly than the current path?
Response. STAPPA and ALAPCO's Principles for a Multi-Pollutant
Strategy for Power Plants (enclosed), adopted by our associations on
May 7, 2002, outline what we believe should serve as the foundation of
a viable integrated national approach for regulating air emissions from
electric power plants on an expeditious schedule with synchronized
deadlines.
______
Responses by John A. Paul to Additional Questions from
Senator Lautenberg
Question 1. Can you explain why it is so important that a multi-
pollutant program for power plants be enacted that supplements existing
law and not as a substitute?
Response. A number of tools and requirements provided for by the
Clean Air Act--including those related to New Source Review,
visibility, the control of hazardous air pollutants from utilities and
states' abilities to protect air quality in their jurisdictions--have
proven to be essential to state and local air agencies in their efforts
to achieve and sustain clean air; these tools and requirements must be
retained. In addition, we believe that, given the deficiencies of the
multi-pollutant control program established under the proposed Clear
Skies legislation, a program based instead on the existing law will
provide far greater, and more certain and timelier protection of public
health and the environment.
Question 2. S. 1844 would repeal many provisions of the existing
Clean Air Act in order to ``simplify'' it. Isn't this essentially
returning to the failed approaches of the past before 1990?
Response. We do not believe it is necessary to repeal provisions of
the Clean Air Act in order to ``simplify'' it for the purposes of
controlling emissions from utilities, particularly if repealing
provisions will compromise our ability to protect public health and the
environment, which we believe the rescissions in S. 1844 will do.
Instead, as the Acid Rain Program established in the 1990 Clean Air Act
Amendments demonstrates, it is possible to establish and implement a
viable new pollution control strategy within the framework of the
existing law.
Question 3. All of New Jersey's counties are currently out of
attainment for PM<INF>2.5</INF>. EPA is claiming all these counties
will be brought into attainment under Clear Skies--do you agree? If so,
by what date would they reach attainment?
Response. All of New Jersey's counties are out of attainment for
the 8-hour ozone National Ambient Air Quality Standard (NAAQS) and 13
of New Jersey's 21 counties are out of attainment for the
PM<INF>2.5</INF> NAAQS.
Ozone--Clear Skies will not bring any additional New Jersey's
counties into attainment for ozone. This is because Clear Skies
achieves little, if any, further NOx reductions during the ozone season
than is being achieved with existing rules (the NOx SIP call). Also,
there is the possibility that NOx emissions could increase during the
summer ozone period, because the Clear Skies cap is annual, and non-
ozone season decreases in NOx could be used to increase NOx emissions
during the ozone season.
PM<INF>2.5</INF>--While Clear Skies would improve air quality in
New Jersey, it is not clear whether these improvements will be
sufficient to attain the NAAQS. It is clear that Clear Skies would not
result in New Jersey's attainment of the PM<INF>2.5</INF> NAAQS by the
deadlines established in the Clean Air Act: 2010, with the possibility
of an extension to 2015. We understand that New Jersey is reluctant to
seek an extension to 2015, because of the adverse health effects of
PM<INF>2.5</INF>. Further, attainment by even the 2015 extension date
is unlikely because trading allowed for under Clear Skies will push
compliance with the Clear Skies' 2015 cap well beyond 2015. Since
sulfates from coal-fired power plants are the largest category of
PM<INF>2.5</INF> emissions and reductions of SO<INF>2</INF> emissions
from power plants are the most cost-effective way of reducing
PM<INF>2.5</INF> emissions, it is economically efficient and
environmentally appropriate that all reasonable emission reductions
(not just the least expensive) be achieved from coal-fired power
plants.
__________
Statement of Senator Beverly Gard, Chair, Energy and Environment
Affairs Committee, Indiana State Senate
Mr. Chairman and members of the subcommittee: Thank you for the
opportunity to testify. My name is Beverly Gard and I have served as a
member of the Indiana State Senate for 16 years. I am chairman of the
Senate Energy and Environmental Affairs Committee, and the Public
Health Subcommittee. I serve on the Environment Committee of the
National Conference of State Legislators and previously served as the
committee chairman. Previously, I worked as a biochemist in the
healthcare industry.
My approach has been to balance the need for cleaner air and water
with our responsibility to promote economic growth, jobs and
opportunity for the citizens of my state. I believe very strongly that
such a balance can be found. It is possible to both promote a cleaner
environment and ensure a healthy economy. I'm pleased to testify today
on legislation that I believe strikes that appropriate balance and I
appreciate the opportunity to share my views.
I am pleased to see that the committee is, again, considering a
multi-emissions approach which, if properly crafted, would result in
the largest power plant emissions reduction program in history. Multi-
emissions legislation enjoys the support of a diverse group of
organizations such as the National Governors Association, the National
Association of Counties and the Environmental Council of States. It has
also garnered support from labor organizations such as the
International Brotherhood of Electrical Workers and the United
Mineworkers of America and business groups such as the U.S. Chamber and
the National Association of Manufacturers.
This range of support indicates to me that the multi-emissions
approach hits that ``sweet spot''--it's both good for the environment
and the economy. That's critical to a state like Indiana where our
opportunity to grow economically is directly linked to the ability of
our state's electricity providers to keep costs competitive.
In Indiana, approximately 95 percent of the electricity generated
comes from coal-fired power plants, second only to West Virginia. This
compares to 70 percent for all upper Midwest States and 52 percent for
the national average. Indiana has the 9th lowest retail electricity
prices in the nation and 24 percent below the national average. Indiana
utilities consume over 48 million tons of coal a year with over 32
million tons of that coal coming directly from Indiana mines.
Yet, since the Clean Air Act was last amended in 1990,
SO<INF>2</INF> emissions are down over 45 percent, and NOx, have been
reduced by roughly 70 percent. The state's utilities have spent in
excess of $3 billion to reduce emissions since 1990 and the utilities
in the state have recently estimated that they may have to spend $3
billion more to comply with new pending EPA regulations.
Today, nearly 15 years after the passage of the 1990 Clean Air Act,
Americans are enjoying significantly better air quality, not at an
insignificant cost, but at a price our economy has been able to bear.
So, if the Act has worked why do we need a new multiemissions bill?
The answer is litigation and uncertainty. The Act includes multiple
regulatory approaches to reduce the same emissions. In addition,
despite the onset of regulations, those regulations will be in court--
creating uncertainty for the states that must comply with nonattainment
designations already made and for the utilities that must comply with
whatever the final outcome might be. There is even a question in the
regulations as to whether certain coal types will gain favored status
over others.
But let me tell you what else is at risk. The longer rules are
fought over in court, the longer the breathing public remains at risk.
And, the longer the rules are in court, the more difficult the task of
meeting new EPA air attainment guidelines will be--with states battling
each other to secure emission reductions from sources outside their
region.
However, with legislation, states are provided the roadmap to
reaching these reductions. In fact, using the NOx caps set in Clear
Skies Indiana utility NOx emissions would be reduced from 262,260 tons
annually to 106,000 tons in Phase I and less than 79,000 tons in Phase
II. This represents a 60 percent reduction in Phase I and a 70 percent
reduction in Phase II from actual 2003 levels. Using EPA's projections
for the impact of Clear Skies all counties in Indiana should be in
attainment for ozone by the first phase in 2010.
And, under the new fine particles nonattainment designations of
January 2005, 14 full counties and five partial counties in Indiana
were labeled as nonattainment. Using 2001 to 2003 data from fine
particle monitors in the state most counties were no more than 10
percent above the standard. With the SO<INF>2</INF> caps set in Clear
Skies Indiana Utility SO<INF>2</INF> emissions would be reduced from
805,000 tons annually to 253,000 tons in Phase I and less than 171,000
tons in Phase II. This represents a 69 percent reduction in phase I and
a 79 percent reduction in Phase II from actual 2003 levels. Using EPA's
projections for the impact of Clear Skies all counties in Indiana
should be in attainment for fine particles by the first phase in 2010.
I would also like to spend a couple of minutes talking about
another benefit that a multiple pollutant bill will provide in the form
of mercury reductions. As presented, the emissions reductions required
under the Clear Skies initiative will provide companies with a clearly
defined and efficient market based trading program for all three
pollutants. This creates planning certainty for utilities as they
integrate all pollution control retrofits for all three pollutants.
More importantly, from my perspective, it minimizes the financial
impact to consumers. In addition, it allows mercury emissions to be
addressed on a national basis, providing uniformity and consistency
among the many states under a trading program run by EPA.
Multi-emissions legislation saves States environmental agencies
large personnel and budget resources which would otherwise be required
to develop 48 individual state programs which could be more efficiently
implemented by EPA. I have heard that it takes less than 20 people at
EPA to run the entire SO<INF>2</INF> and NOx trading program. That
level of efficiency could not be duplicated by a piecemeal approach to
emissions reductions.
I realize that much of the debate around multi-emissions focuses on
how much and how fast. I have already outlined the significant emission
reductions that will be achieved through this bill in a key coal
burning state. And, while I believe that reducing mercury is extremely
important, it is also imperative for Congress to recognize that there
remains a debate about the role of utility emissions in reducing
mercury levels in fish. Mercury as you know is transported far and wide
and counties burning coal with no controls also contributes
significantly to the mercury levels in the United States.
Therefore, I am convinced that a phased in reduction over a
reasonable time period will provide the impacted utilities to get the
reductions they can from SO<INF>2</INF> and NOx controls while
providing the time needed to test new mercury specific controls. The
adoption of the SO<INF>2</INF> and NOx caps in Clear Skies will help
Indiana remove the stigma of nonattainment and help Indiana businesses
remain competitive and encourage new economic development.
Again, let me emphasize that these reductions do not come cost-
free. Indiana has already experienced significant economic losses as
many of you on this committee have felt in your own states. I want to
emphasize that we need to ensure that caps which are enacted, are
achievable without breaking the bank. I live in this state, my family
lives in this state. I plead with you today that approaches to set in
motion all of these controls be fair, be balanced, do not disadvantage
Indiana coal or the economies that thrive on that industry, and are
enacted sooner rather then later.
The planning certainty provided by a 3P legislation also sends the
signal to power companies and coal companies that coal will be an
important and reliable long term source of energy for our country. We
have over a 250-year supply of useable coal reserves in our state
alone. A manageable implementation of emissions reductions gives new
clean coal technology, like IGCC and other new and clean ways to burn
coal a chance to develop and mature. This will help reduce the
country's reliance of foreign energy sources, improves our energy
security and has the added benefit of keeping natural gas prices down.
Only Congress can take the guess work out of this public policy
issue by passing legislation that sets a long-term emissions reduction
schedule to make the deepest reductions in power plant emissions at the
lowest possible cost to the consumer.
I would hope that the irony of arguing over specific cap levels
beyond 70 percent reductions is not lost on the members of this
committee nor Congress as a whole. Delay only brings with it, continued
emissions and escalating costs. Those are not things that I want to
bring home to Indiana citizens. I close by asking that you work
together, irrespective of political party or geography, to pass this
vitally important piece of legislation.
I look forward to working with the Committee, the Administration
and other key members of Congress to help make this legislation a
reality.
Thank you.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
______
Responses by Beverly Gard to Questions from Senator Jeffords
Question 1. Should we amend the Clean Air Act to delay the existing
attainment deadlines therein? If so, why?
Response. I don't have evidence that Clear Skies would delay
implementation of the Act. Even under the existing CAA structure, both
the 8-hour ozone and PM<INF>2.5</INF> standards are new health
standards that present new challenges to the EPA as it develops new
guidance documents for the states to use in developing attainment
strategies. The EPA has been slow in getting guidance documents out and
more time will be needed before the states know what the final guidance
will require. In the case of PM<INF>2.5</INF> in particular the states
must start from scratch in developing the analytical tools and data
needed to evaluate the large number of sources of fine particles, how
much of the problem is local versus from regional sources, and then how
to control those sources that ultimately will bring their states into
attainment.
As the states, EPA and Congress learned with the one-hour ozone
standard it took decades of hard work and scientific research to
understand how best to control ozone pollution for the varying mixes of
sources in different regions of the country. All the while the states
continued to develop and modify attainment SIPs and sources installed
controls as expeditiously as they could. It is possible that we are
facing a similar situation with the new PM<INF>2.5</INF> standard. Many
believe that solving the PM<INF>2.5</INF> health standard around the
country will be more difficult than the ozone experience.
Protecting the public's health is important to all of us but states
and affected sources would be burdened with an immensely complicated
process and there is no way to predict if deadlines will or can be met.
This would all be simplified under a multi-emissions approach.
Question 2. Do you think that it is prudent to increase gas
emissions?
Response. No, it is important to continue the long term trend since
1990 of steadily reducing SO<INF>2</INF> and NOx emissions which is
precisely what would happen under Clear Skies legislation. I know that
Senator Jeffords voted for the 1990 Clean Air Act amendments which
called for only a 50 percent reduction in emissions and included the
very popular Acid Rain provision on which Clear Skies is modeled. As I
noted in my testimony, since the Clean Air Act was last amended in
1990, SO<INF>2</INF> emissions are down 45 percent, and NOx have been
reduced by roughly 70 percent. The state's utilities have spent in
excess of $3 billion to reduce emissions since 1990 and the utilities
in the state have recently estimated that they may have to spend $3
billion more to comply with new pending EPA regulations.
With the SO<INF>2</INF> caps set in Clear Skies Indiana utility
SO<INF>2</INF> emissions would be reduced from 805,000 tons annually to
253,000 tons in Phase I and less than 171,000 tons in Phase II. This
represents a 69 percent reduction in phase I and a 79 percent reduction
in Phase II from actual 2003 levels (and almost 90 percent below 1990
levels). Using the NOx caps set in Clear Skies Indiana utility NOx
emissions would be reduced from 262,260 tons annually to 106,000 tons
in Phase I and less than 79,000 tons in Phase II. This represents a 60
percent reduction in Phase I and a 70 percent reduction in Phase II
from actual 2003 levels.
Question 3. How would you advise this Committee to determine
whether the value of the existing provisions of the Clean Air Act are
worth more in health and environmental benefits than any possible
replacement provisions? What kind of information would you use?
Response. As I noted above, my written testimony provided estimates
the emission reductions that would be achieved in my state alone if S.
131 is enacted. Beyond the 70 percent reduction in utility NOx
emissions already achieved since 1990, another 60 percent reduction
will occur by 2010. And beyond the 45 percent reduction in utility
SO<INF>2</INF> emissions achieved since 1990, another 69 percent
reduction will occur by 2010. These percentages are the equivalent of
nearly 700,000 tons of NOx and over 1.2 million tons of SO<INF>2</INF>.
The cap-and-trade systems in S. 131 are modeled on the Acid Rain
Program, which produced the largest and most cost-effective emission
reductions ever achieved under any Clean Air Act program. The benefits
are easily calculable because of the statutory emissions caps, and will
extend far beyond Indiana's borders.
In contrast, the recent interim report from the National Research
Council demonstrates the difficulty of attempting to quantify the
relative benefits of just one Clean Air Act program--the New Source
Review program--when the statutory prerequisites are not clear
emissions goals, but regulatory consequences that are triggered by
periodic investment decisions and other independent factors. The
benefits of the proposed legislation are certain in both quantity and
timing, and deserve careful consideration by this Congress so that
further progress is not unduly delayed.
Question 4. What are the lowest cost control options available to
achieve attainment with the ozone and fine particulate matter air
quality standards on the existing schedule in the Clean Air Act?
Response. The EPA and the states have been working on these
problems for many years and will continue to work to find the best
balance between achieving air quality goals and minimizing the cost of
compliance on its businesses and citizens. Since the sources of
precursor emissions for both the ozone and fine particulate standard
are comprised of a local and a regional source component the lowest
cost controls will vary in different regions of the country. There is
no silver bullet that will solve all air quality problems in all areas
of the country.
Large reductions from the electric power sector as contained in
Clear Skies will help lower the regional component of ozone and fine
particulate and will likely bring the vast majority of the American
heartland into attainment with ozone and fine particulates. But
reductions in the Midwest will have little or no affect on achieving
attainment in the heavily urbanized areas in the Northeast. Pollution
reductions targeting local sources in large urban areas will be needed
if these areas are ever expected to reach attainment.
Question 5. You used the phrase ``. . . as demographics change, as
states' priorities change and technology changes . . .'' to suggest
that the Clean Air Act needs to be modernized. What exactly does that
phrase mean?
Response. In response to a question regarding my opinion of the
power industry's support for improving air quality, I referred to
changes in economies, demographics and technology, subsequent to the
enactment of the Clean Air Act. I believe that the power industry wants
to improve air quality. But from my perspective as a legislator
interested in achieving environmental improvements at costs that are
affordable to the citizens of my state, S. 131 is a policy that will
employ economic and technological efficiencies far better than the
current approach we are using. Much progress has been made to improve
air quality, but it will be increasingly costly to improve it even
more. I trust that all of the committee members are as concerned as I
am about increases in the price of energy and the real impact this has
on particular demographic groups. According to the U.S. Department of
Energy, families with annual incomes under $10,000 spend 29 percent of
their income on energy while families with incomes over $50,000 spend
just 4 percent. Emission reductions that are faster and deeper than S.
131 requires will disproportionately affect lower income families.
Question 6. According to EPA modeling of the Clear Skies approach,
there are ten coal-fired power plants in Indiana that EPA believes will
not put on advanced NOx or SOx controls before 2020. These represent
one-third of the electric plants in Indiana. They generate about 5,000
megawatts, have an average age of 49 years, and in 2001 about 70,000
children with pediatric asthma lived within 30 miles of them. Since
Clear Skies will not clean them up any time soon, what should we do?
Response. There are two answers to this question. First, what is
important for Indiana and the country as a whole, are the levels of air
emissions and emission reductions attained overall, not the specific
levels of controls at each specific power plant unit. As I have noted
above, Clear Skies will reduce emissions substantially and continue the
long-term emission reduction trend for SO<INF>2</INF> and NOx in our
state.
Second, it is anticipated that by 2020 the vast majority of coal-
fired generation will be scrubbed in the state. Consider that the
average allowance emissions rate assuming no growth in demand in coal
use in Indiana is less than 0.3 lbs. SO<INF>2</INF> per million Btu by
2018 and about 0.4 lbs. in 2010. These rates simply cannot be achieved
without the vast majority of coal fired power plant capacity being
scrubbed. A similar picture emerges regarding the installation of SCRs
given the large NOx reductions required under Clear Skies.
Question 7. Should downwind states retain all of their existing
rights under the federally enforceable Clean Air Act to ensure that
upwind sources of pollution are not significantly contributing to or
causing nonattainment in the downwind states? If not, why not?
Response. Federalism is at the very foundation of the Clean Air
Act. The Act expressly preserves the right of States to make decisions
regarding the nature, extent and scope of the emissions reductions and
controls necessary to achieve and maintain the national ambient air
quality standards within their states and in downwind areas. States
should be free to develop and implement a suite of emission reductions
and control measures that are based on the specific factors and
criteria set forth in the state legislation authorizing the development
of their state implementation plans. Each State has a unique inventory
of emissions sources, particular geographic features, and specific
economic and energy concerns that must be accommodated in the design
and implementation of a successful air pollution control program.
The existing Clean Air Act authorities for addressing interstate
air quality problems were initially utilized to deal with multi-state
urban areas or large sources whose downwind impacts were direct and
quantifiable. More recently, these authorities have been utilized to
deal with smaller and smaller increments of ``regional contributions,''
whose total elimination would have no impact on the attainment status
of the downwind area. The massive reductions required by the proposed
legislation should be accompanied by a period of repose, to allow an
opportunity to determine in fact whether these reductions and other
existing Clean Air Act programs will be sufficient to eliminate any
``contribution'' from identifiable utility sources to a downwind
nonattainment area.
Question 8. How many major sources of toxic air pollution in
Indiana would be exempt, for any period, from the current requirement
in the Clean Air Act to use maximum achievable control technology, if
S. 131 were signed into law?
Response. S. 131 establishes a mercury cap-and-trade program that
includes an emissions cap for all coal-fired electric utility units
that goes far beyond the levels proposed by EPA as the maximum
achievable control technology (MACT) standard. Consistent with the
effective cap-and-trade programs developed for the Acid Rain Program
and the NOx SIP Call, very low emitting units (under 50 pounds per
year) are not included in the program. Discussions with electric
company representatives in the state indicate that several dozen
electric facilities emit below this level, and make up a small
percentage of total mercury emissions. The only other hazardous air
pollutant that EPA considers to be a health concern at present for
electric power generators is nickel from oil-based plants. Such plants
are a very small percentage of the electric generation in Indiana, and
EPA is working on a regulation for this source.
In addition, some non-electric sources could ``opt-in'' and, while
reducing mercury to a required level, could be exempted from reducing
emissions of other hazardous air pollutants. It is not possible to
estimate the number of ``opt-in'' facilities or how this might affect
their emissions of hazardous air pollutants.
Question 9. The cap-and-trade program for SOx emissions created in
1990 handed out permits to pollute, also known as allowances, to coal-
fired power plants for free or at zero cost to them. A 2004 report from
the national Academy of Science said that the social cost of an
allowance auction is expected to be dramatically less than allocation
at zero cost. So, an auction results in greater value to society and
the consumer, but it obviously costs power generators more. Which
system do you favor, or would a hybrid system be best?
Response. Under the current Clean Air Act Amendments of 1990,
SO<INF>2</INF> allowances are for the most part allocated directly to
power plants as opposed to being auctioned. This system has worked very
well and has achieved significant reductions at a relatively low cost
to customers. It is the most equitable system with electric power
companies and their customers that are incurring the added costs to
comply with the emission reduction requirements receive the emission
allowances in order to continue running their plants at significantly
reduced emission levels. I support the continuation of this type of
allocation system in the future as embodied in Clear Skies legislation.
Some have noted that auctions provide lower costs to society than
allocation to generators. However, this is usually predicated on how
the proceeds from the auctions are redistributed by the federal
government and assumes that the government would redistribute the
proceeds ``efficiently'' in economic terms. (One method of reallocating
proceeds that would increase economic efficiency would be cutting
marginal income tax rates, for example.) Unfortunately, I am not very
convinced that this would happen based on past Congressional actions
and would be concerned that we would be creating another federal agency
and another set of federal costs to collect and redistribute the
auction proceeds and these proceeds could total in the tens of billions
of dollars.
Most importantly, I am concerned how this system would affect
electricity customers in Indiana. We continue to have regulated
electricity rates, so the higher costs to electric companies to buy the
auctioned allowances would result in still higher costs to Indiana
customers.
Question 10. What effect has the 29 or more legal actions filed by
the utility industry against EPA Clean Air Act standards and
regulations since 1990 had on certainty?
While your question refers to legal actions filed by the utility
industry, I am also aware that many (perhaps more) legal actions
challenging Clean Air Act standards and regulations have been filed by
environmental organizations, states, and others. As you are doubtless
aware, such litigation is brought to resolve uncertainties created by
ambiguous or conflicting statutory directives, or to challenge new or
innovative methodologies developed by EPA in the exercise of its
administrative discretion, and generally involves questions about the
nature and scope of EPA's regulatory authority. The proposed
legislation would address the proliferation of Clean Air Act litigation
by providing clearer statutory directives and resolving conflicts among
overlapping statutory programs.
Question 11. You suggest that 3P legislation sounds a signal to
invest in IGCC and cleaner ways of burning coal. Please explain that,
referencing any supporting economic data or analyses.
Response. Properly designed multi-pollutant legislation can help
play a role in promoting the continued use of the nation's abundant and
low-cost coal resources which will alleviate pressure on the US natural
gas demand. Over the past decade most new power plants have relied on
natural gas to produce electricity. This has helped to drive up natural
gas prices for all customers and lead to many companies making
decisions to leave the country and take those jobs with them.
As utility companies plan their approach on how to comply with the
significant SO<INF>2</INF>, NOx and mercury reductions over the
upcoming decade they must also meet the ever increasing demand for more
power. This means that new base load coal fired power plants that are
inexpensive to operate as well as having the lowest possible emissions
profile will need to be available to fill the gap otherwise utilities
will have to pick more expensive power generation options meaning more
natural gas units.
Question 12. You indicated that you would support the deepest
reductions at the lowest possible cost to the consumer. The Clear Skies
bill is designed to be the lowest cost to the producers, not the
consumers. If we can make deeper cuts in emissions without appreciably
increasing the costs to consumers, would you support it?
Response. First of all, I don't agree that Clear Skies is designed
to be lowest cost to producers and not consumers. In fact, producer
costs are typically passed through to consumers through regulated rates
such as in Indiana or indirectly in fully deregulated states through
power market prices. This means that lower costs to producers is
generally synonymous with lower rate impacts for consumers.
Second, I don't believe we can make significantly deeper cuts in
emissions without appreciably increasing the costs to consumers. In the
near term (the next five years), there are already massive pollution
control construction plans for scrubbers, SCRs and other equipment
ongoing. (For scrubbers alone, some 50 to 60 thousand megawatts have
already been announced for completion by the end of the decade.
Already, there are shortages in raw materials, equipment, and workers.
Further, the lead time for constructing a scrubber is three to five
years given permitting needs as well as engineering and construction
schedules. Longer term in Phase II of Clear Skies, as I noted the
reduction requirements would already require that the vast majority of
coal fired generation in Indiana would be installing scrubbers and
SCRs. Significantly greater reductions would require that coal units be
retired or mothballed and replaced with much more expensive natural gas
in many cases leading to significantly higher consumer costs.
As I indicated in my answer to Question 5, higher energy costs
disproportionately impact low and lower income families. Every dollar
spent on emission reductions is an appreciable increase in cost that
especially harms these families.
Question 13. Do you think it's appropriate for the EPA to go back
in time to reverse regulatory determinations, like they are proposing
to do on the mercury finding from 2000?
Response. As I understand it, the determination made by EPA in 2000
was merely the first step in a detailed investigation into utility
emissions and control technologies--and that detailed investigation has
not yet been concluded. I believe it is both necessary and appropriate
for regulatory agencies to continue their investigations and re-
evaluate preliminary decisions as additional information becomes
available, so that all relevant information is included in the final
determination.
Question 14. Would you support a binding global treaty that
required all nations to reduce their mercury use and emissions?
Response. I could support an international treaty that implements
U.S. law but goes no further. First ever regulations to significantly
reduce electric power company mercury emissions are due to be finalized
by March 15, 2005. Other sources such as municipal solid waste
incinerators have already been regulated. I have been briefed that the
United States is already complying with the existing international
``Long Range Transport of Air Pollutants'' treaty, which requires
mercury reductions. Regardless of what we do here at home, sources
outside our borders will continue to be the dominant source of mercury
deposition in the United States. Recent research indicates that up to
75 percent of the mercury deposited over most of the United States
comes from outside our country (almost 700 tons of mercury from China
is annually transported through the atmospheric across the Pacific
Ocean towards the US according to EPRI scientists who have taken the
measurements); U.S. emissions of mercury are only 1 percent of the
total global pool; and the Americas (North Central and South)
contribute only 11 percent of the total anthropogenic emissions of
mercury in the Northern Hemisphere (compared to 34 percent from China
and 14 percent from Central Asia). The United States is a leader in
global efforts to control mercury use and emissions.
Question 15. A recent Florida study showed that when power plant
emissions were stopped the deposition of mercury in waterways radically
dropped. Are you at all concerned that toxic hot-spots might develop if
we use a cap-and-trade system for toxics like mercury and don't require
at least some minimal reductions at each unit?
Response. It is my understanding that the Florida study you are
referring to tried to link reduced mercury emissions from local
municipal and medical waste incinerators to reduced mercury levels in
fish in the Everglades. It did not pertain to power plants. Significant
scientific questions have been raised regarding the validity of the
study's conclusions According to EPA, mercury emissions from these
incinerators are different from emissions form power plants.
Incinerators release mercury in short bursts from much shorter stacks
whenever material containing mercury is combusted. The Everglades is a
unique water body, with distinctive water chemistry and ecological
processes. The atmospheric transport model used by the state of Florida
does not account for chemical reactions in the atmosphere and global
sources of mercury outside the state. Studies show that the amount of
mercury being deposited in Florida has changed very little, despite
emissions reductions from in-state incinerators. The attached comments
from EPRI discuss more of the study's errors and misconceptions.
From what I've read and heard, no one can agree as to what a ``hot-
spot'' is. It seems like anyone can describe a lake or water body as a
``hot-spot'' if it has a state fish advisory. I do not believe that a
cap-and-trade program for mercury like the one proposed in the Clear
Skies Act or in EPA's proposed mercury rule would cause so-called ``hot
spots.'' Studies of the acid rain allowance trading program and many
years of real-world experience show that trading does not significantly
affect where decreases in sulfur deposition actually occur. The overall
success of the acid rain SO<INF>2</INF> trading program leads me to
believe that localized effects will not occur with a mercury cap-and-
trade program. Also, I understand that cap-and-trade programs promote
economically efficient decisions to reduce emissions from power plants,
so that plants with higher mercury emission rates will find it more
cost-effective to control mercury right away. No matter what, Clear
Skies would dramatically reduce power plant mercury emissions (to a
level well below the estimated 40 percent reduction in mercury
emissions from power plants due to the installation of conventional
control technologies to reduce sulfur dioxide, nitrogen oxide and
particulate matter).
Question 16. How much will Indiana's utility NOx emissions be
reduced by the NOx SIP Call in 2010? How does this compare to the
reduction required by S. 131 in the same year?
Response. Based on readily available information from EPA all
electric utility sources in the state of Indiana emitted 334,100 tons
of NOx in calendar year 2000. Under the NOx SIP call utilities are
projected to emit approximately 236,000 tons annually in the year 2010.
With the implementation of Clear Skies Act utilities are projected to
emit approximately 97,400 tons annually in the year 2010. These
reductions work out to be a 29 percent reduction in 2010 with just the
SIP Call and a 71 percent reduction by 2010 with Clear Skies, with
additional reductions continuing to occur after 2010.
Question 17. How would Indiana coal production be disadvantaged by
a mercury reduction requirement of 70-90 percent to be achieved by
2010?
Response. Indiana electric rates are some of the lowest in the
nation. A primary driver for the low rates that are enjoyed by our
customers, businesses, and industries is that 95 percent of our
generation is produced from an abundant, reliable resource--coal. In
fact, it is estimated that Indiana has a 300 year supply of coal.
Any mercury regulation that would require a 70-90 percent reduction
by 2010 presents two major issues. First, I am unaware of any mercury
specific commercially available technology that has been proven to be
available at this time. There have been a number of pilot projects that
have provided promising results, but, once again, have not been proven
on large coal-fired units. Therefore, it is not technologically
feasible to meet this reduction requirement at this time without
significant disruptions to the electric power system. This is
documented in the January 2005 study by the Energy Information
Administration study entitled ``Analysis of Alternative Mercury Control
Strategies'' where they projected over a 30 percent increase in
electricity prices in the Midwest if a 90 percent reduction was
required.
Second, even if the technology were generally available, not every
power plant may be able to reduce mercury emissions by 90 percent and
continue to afford to operate. Such a sudden and major requirement to
reduce mercury emissions may force specific power plants to seek
alternative fuels. One option for alternative fuels could be a further
push toward an already strained gas supply option. This increased
pressure on gas utilization could lead to higher gas prices that would
negatively impact all sectors of the economy including those on fixed
incomes.
It should be pointed out that a major mercury reduction requirement
that is not reasonably phased in would not only disadvantage Indiana
but the fuel diversity for the nation. It is imperative that any future
environmental regulation, including mercury regulations, must allow
regulated entities the opportunity to plan for the required reductions
so as to not unduly impact the fuel diversity of the nation.
Question 18. You suggested that greenhouse gases should be
addressed in a different forum, not in multi-pollutant legislation
regarding power plants. What would be a more appropriate forum?
Response. Greenhouse gas issues are complex and they are not easily
resolved. However, I have observed that the power industry already has
voluntarily taken substantive actions to address emissions and is
committed to doing more while the science continues to evolve. Indiana
is rich in coal and Cinergy and American Electric Power are national,
perhaps world leaders in pushing the design envelope for gasifying coal
and commercializing large scale IGCC plants by the end of this decade.
It should be easier and less costly to remove CO<INF>2</INF> from the
flue gas of these new plants compared to pulverized coal units once the
removal technology is perfected. AEP is supporting research to dispose
of the gas underground at its Mountaineer Plant in West Virginia.
As a legislator dedicated to improving the welfare of the citizen
of my state, I prioritize my work to bring results to my constituents
on issues that are having an immediate and real impact on them. I'm
urging you and your colleagues to pass S. 131 now because I believe
that the emission reductions for NOx, SO<INF>2</INF> will address
nonattainment areas for fine particulates and ozone and substantial
emissions reductions for Hg will be made very cost effectively as a co-
benefit of the harmonized NOx, SO<INF>2</INF> and Hg reduction
programs. I don't believe that there is such urgency on the greenhouse
gas issue. In my experience trying to pass legislation, loading bills
with too many provisions usually causes them to die or be terminally
delayed. I fear that trying to force the greenhouse gas issue into this
bill will deny all of us healthier air to breathe when this bill dies.
In my opinion, the proper place to debate this issue is in a global
forum. But all of the countries that emit greenhouse gases should be
required to participate and not be exempted. My understanding is that
China, for instance, emits more CO<INF>2</INF> than the United States,
but isn't required to make reductions under the Kyoto Protocol.
______
Responses by Beverly Gard to Additional Questions from
Senator Lautenberg
Question 1. Senator Gard, we have made good progress in reducing
air pollution under the Clean Air Act Amendments of 1990, why not
implement the existing law?
Response. As noted in my testimony, the primary advantage of the
proposed legislation is the certainty associated with statutorily
establishing a clear timetable and emissions cap for utility sources of
SO<INF>2</INF> and NOx. The unparalleled success of the Acid Rain
Program provides assurance that the proposed reductions will be
achieved in a timely fashion at the lowest cost for energy providers
and their customers.
Question 2. I understand that Indiana has higher rates of cancer,
relative to the national average. So you think CSI should repeal the
application of Maximum Achievable Control Technology requirements that
apply to cancer-causing pollutants for those facilities that reduce
mercury?
Response. I do not believe that experts in the health field would
agree that mercury causes cancer. My understanding is that mercury is a
potential neurotoxin and women who eat fish containing large amounts of
methylmercury during pregnancy can put their fetuses at risk for the
brain and nervous system damage it can cause. The FDA has issued
guidelines regarding fish consumption by pregnant women and young
children. On average, less than 10 percent of the fish eaten in the
United States comes from freshwater sources.
The mercury cap and trade program in S. 131 is appropriate to
reduce this risk.
In the short time available to respond to the questions, my limited
investigation suggests that Indiana's cancer rate is lower than the
national average. As a cancer survivor myself I am very sensitive this
issue.
Question 3. According to the Energy information Administration
(EIA) CSI would not reach the SO<INF>2</INF> reduction goals of the
bill until after 2025 because of ``early reduction'' banking. Isn't
this too long to wait?
Response. In ``From Obstacle to Opportunity: How acid rain
emissions trading is delivering cleaner air'', a 2000 report by
Environmental Defense, a leading national, New York-based nonprofit
organization, represents 300,000 members, states that it has been
``widely credited for advancing the cap and trade proposal to reduce
acid rain.'' The report discusses the basics of emissions trading and
also the concept of ``early reduction'' banking. It explains the
environmental benefits of early reductions in detail. On page 8, ED
states:
``The common understanding of the adverse ecological effects of
acid deposition strongly suggested both that reducing cumulative
SO<INF>2</INF> emissions should be the goal of the program, and that
early reductions were of significant environmental value. The earlier
the reductions, the sooner the ecosystems affected by acid deposition
could begin to recover their acid-neutralizing capacity. As a result,
the economic dynamic created by an emissions cap with banking favored
the environmental benefit of early, extra emissions reductions.
Question 4. Don't we need to reach health standards sooner than
2025?
Response. As explained in the response to question 3, substantial
environmental benefits will accrue due to early reduction banking. The
principle of market based trading programs is that sources are given
economic incentives to reduce emissions early and this encourages
companies to install and operate control equipment earlier. In contrast
a command and control program provides no such incentives because
companies just have to have to equipment operating by the compliance
deadline and not before since it will cost them money to operate the
controls before the requirement actually starts with no corresponding
economic benefit for the reductions.
In fact, in Indiana the early reduction program included in the
recent NOx SIP call resulted in the states power plants reducing their
NOx emissions by thousands of tons prior to the May 2004 deadline. Thus
a large part of the emissions reductions from the trading programs in
Clear Skies will occur early than they would otherwise and thus provide
better air quality earlier as well. And as my written testimony cited,
the EPA's Clear Skies results showed that the nonattainment areas in
the state would be achieved by 2010.
__________
Statement of Ronald R. Harper, Chief Executive Officer and General
Manager, Basin Electric Power Cooperative
My name is Ron Harper and I serve as the CEO and General Manager of
Basin Electric Power Cooperative. I appreciate the invitation to
testify today, and I am here to provide you with Basin Electric's views
concerning the Clean Air Act's current regulatory framework, how that
framework impacts decision making within the energy industry and how
that process might be improved upon. Specifically, I am here to support
the passage of the Clear Skies Act.
Basin Electric is an electrical generation and transmission
cooperative with 120 member cooperatives located in nine states. Our
generation sources include approximately 3,400 megawatts of coal, gas,
oil and wind, but we are primarily a coal-based utility. The three
base-load coal plants we own or manage are located in North Dakota and
Wyoming and use both lignite and subbituminous coal.
Basin Electric is growing and we are looking at developing new
base-load generation. After reviewing all of our options, it became
clear to us that to meet our needs for low cost base-load power, the
best choice was coal. Both North Dakota and Wyoming have ample supplies
of coal and we have considerable knowledge of building and operating
coal-based generation plants. We have built gas generation for peaking
purposes and will build more. However, we do not believe it is prudent
to build base-load gas generation and expose our membership to the
rapid fluctuations in natural gas prices. Further, we hope to grow our
wind portfolio but due to the intermittent nature of wind generation,
it is not base-load generation.
To provide base-load power, Basin Electric is developing two coal-
based facilities, one to be developed in Wyoming and the other located
either in North Dakota, South Dakota or Iowa. Planning is proceeding.
However, building a coal plant takes long-term commitment. It takes 8
to 10 years to build a coal generation plant. The confusion surrounding
the current regulatory programs makes any business decision made today
risky. The planning horizons of the regulations and the regulated
industry simply do not match.
The development of any facility is predicated on the new plant
meeting the necessary emission levels required to be compliant with the
regulation of the Clean Air Act. Industry must know what the emission
level targets are going to be once the plant is commissioned to make
the correct choices today. I believe that Clear Skies will give us
those targets and give industry the regulatory certainty that is
missing today.
elements of clear skies
That being said, I would like to discuss Clear Skies and its impact
to industry. The current patchwork of regulations is duplicative and
inconsistent, often with conflicting compliance objectives and
deadlines. Clear Skies would improve this situation by providing a
clear program to improve our nation's air quality. Even so, it should
be noted that this legislation would have a significant financial
impact on Basin Electric. As I mentioned, Basin Electric runs three
base-load coal facilities. Two of them have advanced environmental
controls while the other, Leland Olds Station, meets all current
regulatory requirements but is not scrubbed.
Under Clear Skies, we would need to substantially upgrade our
Leland Olds facility. Further, because of the structure of the
emissions allocations under Clear Skies, it is likely that we would
also need to buy allocations for our units that are already scrubbed.
This is an expensive prospect for our members that will be paying the
bill. We are willing to take that risk because it allows us to be more
flexible in addressing future power needs. However, we believe that
coal-based units having emission controls as required under the present
New Source Review (NSR) and Prevention of Significant Deterioration
(PSD) provisions of the Clean Air Act should not be subject to new and
onerous emissions reductions.
The current regulations also prevent us from making prudent
business decisions. We have the opportunity to upgrade two currently
scrubbed facilities with new steam turbines. These new turbines would
be capable of producing up to 45 megawatts more energy at our Wyoming
plant and 30 megawatts more at one of our North Dakota plants with no
additional fuel requirement or added emissions. We have not upgraded
these turbines because of our concerns over the NSR program. Due to the
present structure of NSR, reasonable decisions to maintain and upgrade
facilities with no adverse impact to the environment are not being
made. We believe the ability to upgrade these units should be clearly
allowed under the Clear Skies Act without further emission reduction
penalties.
The issue of protecting clean units from further reductions is
something that is important to Basin Electric. One way to address this
issue is to recognize some of the proactive and long-term planning that
has already taken place on this issue. For example, the Western States,
through the Western Regional Air Partnership (WRAP), have developed
their own goals for a viable process. This effort should be recognized
and kept intact through Clear Skies.
Another issue of importance is coal sub-categorization for mercury.
As the committee is aware, the various types of coal have properties
that make regulating them with absolute uniformity very difficult.
Applying regulations in blanket form without sub-categorization by coal
classification would adversely impact the use of coal across the
country for future energy development.
The development of new units is also of concern. The current
legislation creates a small pool of allocations for new units, and we
appreciate that improvement upon the original legislation. This will
lessen the barriers facing new units and encourage newer, cleaner
plants to come on-line.
In short, Mr. Chairman and members of the committee, for Basin
Electric, Clear Skies provides the opportunity to make difficult
decisions with a higher degree of certainty, whereas the current
regulatory process is extremely cumbersome and uncertain for us to plan
with the knowledge and foresight necessary to make an informed
decision. The passage of the Clear Skies Act is important to Basin
Electric and I look forward to working toward its passage with the help
of the committee.
I want to thank Chairman Voinovich for taking the time to hold this
hearing and the Committee members for their attention to this issue.
______
Responses by Ron Harper to Questions from Senator Voinovich
Question 1a. The Energy Information Administration estimates that
the bills proposed by Senators Jeffords and Carper would reduce coal
production and generation much more than Clear Skies. In your opinion,
is that an impact that the coal industry, specifically miners, can
withstand?
Response. Basin Electric does not own or operate any coal mines;
therefore we do not have specific knowledge regarding the impact of the
Clear Skies Act, Senator Jeffords or Senator Carper's bills on the coal
industry, specifically miners.
I would suggest that information be solicited from the National
Mining Association or a coal mining company who would be better able to
provide both quantitative and qualitative responses to your question.
Question 1b. What would be the impact of decreased coal use on the
consumers you serve--businesses and those on fixed incomes?
Response. We would anticipate that the decrease of coal as the fuel
source for our electrical generating units would result in the increase
of other fuel sources, such as natural gas--a fuel that is much more
volatile in price than coal. Coal reserves are normally dedicated for a
specific project and for the life of the project. This results in very
long-term source and price stability for fuel supply. Natural gas
prices experience a great deal of volatility depending on the time of
year, the month and even the week of the sale. Natural gas prices are
simply not as predictable as coal. Therefore, we would anticipate the
decreased use of coal would (1) result in greater volatility and (2)
greater cost of electricity to our consumers.
Question 2a. Some of the Members on the Committee and witnesses
argue that every power plant should be required to reduce mercury
emissions by 90 percent in the next several years. Is this possible?
Response. No, 90 percent reductions in mercury emissions from
lignite and subbituminous coals are not possible with today's available
technology.
Question 2b. What would happen to your existing coal-fired plants
and to the consumers that rely on it for electricity?
Response. The result would be less generation from coal, more
generation from natural gas and increased cost to our consumers.
______
Responses by Ron Harper to Additional Questions from Senator Jeffords
Question 1. Should we amend the Clean Air Act to delay the existing
attainment deadlines therein?
Response. No
Question 2. Do you think it is prudent to increase gas emissions?
Response. No
Question 3. Would you support a binding global treaty that required
all nations to reduce their mercury use and emissions?
Response. I do not think it is possible to have a ``binding''
global treaty regarding mercury emissions. Many countries would not be
able to undertake this type of obligation given their current economic
status.
Question 4. A recent Florida study showed that when power plant
emissions were stopped the deposition of mercury in downwind waterways
radically dropped. This should give us serious concern about trading
toxics. Are you at all concerned that toxic hot-spots might develop if
we use a cap-and-trade system for toxics like mercury and don't require
at least some minimal reductions at each unit?
Response. Although I am not familiar with this report, I have seen
other reports that have a different conclusion on deposition of mercury
and hot spots. I understand that there is considerable research being
conducted by government agencies and private research institutes that
addresses this issue over a broad region. I would defer any opinion on
this issue until the research is completed and conclusive.
Question 5. If S. 131 were to become law, how would that change
your organizations' pattern of investment over the following time
frames: 1 year, 3 years, 5 years?
Response. If S. 131 became law and we were certain of New Source
Review reform, our cooperative would upgrade the turbines in two of our
existing plants resulting in greater generation without the creation of
increased emissions. I would expect these upgrades to occur within 5
years.
Question 6. You indicated that Clear Skies will be expensive. How
expensive will it be for your organization and your ratepayers?
Response. It is our projected estimate that to comply with the
Clear Skies Act, Basin Electric would need to invest approximately $270
million at our existing generation stations. In addition our annual
operating costs would increase by approximately $55 million.
Significant rate increase to our membership would be required.
______
Responses by Ron Harper to Additional Questions from Senator Lautenberg
Question 1. Your testimony stresses the importance of regulatory
certainly. But S. 1844 significantly re-writes the Clean Air Act which
is likely to provoke litigation over the interpretation of the new law.
Won't this create greater uncertainty than implementing current law?
Response. If S. 131 is enacted and incorporated into the Clean Air
Act with greater clarity and greater certainty than current rules and
regulations, I would expect less litigation to occur. After 20 years
the current law is still producing litigation not only with respect to
what constitutes ``a major modification'' under the New Source Review
provisions, but also constantly producing questions regarding what
constitutes Best Available Control Technology. It is not likely that
greater uncertainty would occur with new legislation.
Question 2. According to Mr. Schneider's testimony, if the existing
Clean Air Act were fully enforced, we would obtain greater reductions
in air pollution sooner than under S. 1844 and save thousands of
additional lives each year. Why shouldn't we do this?
Response. I do not agree with Mr. Schneider that greater reduction
in air pollution will occur with the existing Clean Air Act. In my
opinion, I believe that S. 131 would achieve greater reductions in a
shorter time frame.
Question 3. Senator Inhofe's bill repeals existing Maximum
Available Control Technology standards applicable to facilities in
several major industries, if they cap and trade any pollutants under
the bill, and requires only an EPA study instead. Is this wise public
policy? Does it make more sense to study the effects of removing these
controls for toxic chemicals before they are enacted?
Response. I can only respond as a coal-based generation
cooperative, there is no relief from MACT for us in the Clear Skies
Act.
__________
Statement of Conrad G. Schneider, Advocacy Director,
Clean Air Task Force
Mr. Chairman and distinguished members of the Subcommittee, my name
is Conrad Schneider, and I am the Advocacy Director of the Clean Air
Task Force, a nonprofit organization dedicated to restoring clean air
and health environments through scientific research, public education
and legal advocacy. The Task Force appreciates the opportunity to
appear before you today and offer our views on the President's proposed
Clean Skies Act (referred to hereafter as ``CSA'').\1\ Today, I am also
representing three other organizations: Clear the Air, the National
Environmental Trust and the United States Public Interest Research
Group.
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\1\ Two versions of the ``Clear Skies Act of 2003,'' the Bush
Administration's multi-pollutant legislative language, were introduced
in Congress in 2003. The first set of bills, S. 485 and H.R. 999,
appeared on February 27, 2003. The bills were then revised and
reintroduced as S. 1844 on November 10, 2003.
The two Clear Skies bills introduced in 2003 are collectively
referred to in this testimony as ``CSA.'' In instances where it is
necessary to distinguish between the February and November versions of
Clear Skies, the bills will be referenced by their Senate designations,
S. 485 (February) and S. 1844 (November).
---------------------------------------------------------------------------
overview
We strongly urge you to oppose CSA for the following reasons:
1. CSA offers pollution reductions of sulfur, nitrogen and mercury
that are too little and too late to adequately protect human health and
the environment in a timely way. Faster and deeper cuts are necessary,
feasible, and cost effective, as the Administration's own models and
methodologies--and in some cases its own written analysis--demonstrate.
2. CSA is inadequate even as a ``down payment'' towards attainment
of the nation's soot and smog standards. By EPA's own models, CSA
leaves 33 million people in 27 counties in Georgia, Ohio and Illinois
and other states breathing air that flunks those standards at the
attainment date of 2010.
3. CSA fails to address global warming pollution from the nation's
and the world's biggest single source of that pollution--U.S. power
plants--despite the opportunity to take action at what the
Administration's own analysis demonstrates is in some cases a very
modest to negligible cost.
4. Finally, in addition to setting targets that fail to adequately
protect human health and the environment, CSA would strip away
virtually all existing provisions of the Clean Air Act that could
potentially require future emission reductions beyond these weak
targets. These include provisions to protect local air quality, clean
air in our national parks, apply maximum available control technology
to reduce hazardous air pollutants from power plants, and abate
interstate pollution that prevents downwind states from assuring their
own attainment of clean air standards. Even worse, CSA would
effectively move back the attainment deadlines for national clean air
standards themselves--in effect, delaying the standards to accommodate
the weak emissions requirements of CSA. In short, CSA trades nearly all
the protections of the current Clean Air Act and its promise of
continuous progress in cleaning the air for a set of half-measures that
will not achieve the Act's air quality objectives.
Speaking for the Clean Air Task Force, I should note that I do not
come to this hearing room today opposing in principle the concept of
multi-pollutant power plant legislation. To the contrary, my
organization was one of the earliest and most vocal proponents of such
legislation and has twice testified before this subcommittee that such
legislation, if it provides the maximum available and cost-effective
protection of health and the environment, is worthy of consideration.
However, CSA does not meet that standard. (And, unfortunately,
despite bipartisan criticism of CSA, it is highly unlikely that multi-
pollutant legislation that meets that standard will see approval in the
current Congress or be signed into law by this President.)
Fortunately, this subcommittee, and America's citizens, are not
stuck with a choice between flawed multi-pollutant legislation such as
CSA and no progress on cleaning up power plant pollution. For example,
The EPA has proposed the Clean Air Interstate Rule, or CAIR, that
would address soot and smog pollution from power plants in two dozen
Eastern and Central States. My organization and many states and others
have urged EPA to tighten that rule and move forward its effective
dates.\2\ If EPA does so, this will be a major step forward for clean
air.
---------------------------------------------------------------------------
\2\ Comments on Proposed Rule to Reduce Interstate Transport of
Fine Particulate Matter and Ozone (Interstate Air Quality Rule), 69
Fed. Reg. 4566 (January 30, 2004). Docket No. OAR-2003-0053.
---------------------------------------------------------------------------
In addition, EPA has before it a remand from the courts to issue
a new rule to protect clean air in the nation's parks; if EPA does its
job properly, we can substantially reduce power plant pollution in the
West as well as the East.
The EPA has pending before it a rulemaking concerning Maximum
Achievable Control Technology to control the hazardous pollutant
mercury, in which the weight of evidence supports a 90 percent
reduction in the nation's power plant mercury emissions, as well as
other hazardous air pollutants from power plants.\3\ As with the CAIR
rule and the national parks rule, the Administration could, with the
stroke of a pen, embrace the evidence of technical feasibility, as it
recently did with diesel emissions from new on and off-road diesel
engines, and effectively take this mercury issue off the table for the
foreseeable future.
---------------------------------------------------------------------------
\3\ Comments on Proposed Emission Standards for Hazardous Air
Pollutants; and in the Alternative, ``Proposed Standards of Performance
for New and Existing Sources: Electric Utility Steam Generating
Units,'' 69 Fed. Reg. 4652 (January 30, 2004) and Supplemental Notice,
69 Fed. Reg. 12398 (March 16, 2004), Docket No. OAR-2002-0056.
---------------------------------------------------------------------------
Finally, the EPA and Department of Justice have brought cases for
New Source Review violations affecting more than one-quarter of the
nation's coal-fired generating capacity. Several of these cases have
been settled in a way that significantly improves regional and local
air quality. Diligent prosecution of the remaining cases, and others
that can likely be brought--rather than undercutting the regulations
themselves, equivocation on the existing cases, and failure to
prosecute new ones--would further improve air quality.
With real and tangible clean air opportunities like these pending,
one could conclude that it is effectively a waste of time for this
subcommittee--and even more so the Senate--to even consider such a
flawed and controversial piece of legislation such as CSA.
Accordingly, I first urge you to reject CSA. And, second, because
EPA has all the authority it needs to make major strides forward on
power plant pollution, and the prospects are dim for legislation that
will achieve greater, faster gains, I urge you to use your energy and
influence to secure a tightening and swift issuance of the CAIR, clean
air in the parks, and mercury rules.
Let me now turn to the evidence in support of each of my major
criticisms of CSA.
1. CSA Offers Too Little, Too Late And Feasible and Cost-Effective
Alternatives Are Available
First, let me address the evidence that the Clear Skies offers too
little, too late as compared with feasible and cost effective
alternatives. To do so, let us compare several multi-emission proposals
against Clear Skies for costs and benefits.
Below is a chart outlining the major legislative proposals and
their major cap and deadline features. This chart includes CSA, as
proposed to date; the Jeffords/Lieberman/Collins Clean Power Act; the
Carper/Gregg/Chafee Clean Air Planning Act; and the EPA's own ``Straw''
proposal of 2001.
(Let me note at the outset that I do not intend to get into a
discussion of whether certain presentations of EPA's position in the
past represented the agency's view of current regulatory requirements
under the Clean Air Act or, as some EPA staff now claim, were instead
simply a tactic to ``scare'' industry into accepting multi-pollutant
legislation. The undeniable fact is that, in a very deliberate
interagency review process, EPA submitted a ``Straw'' proposal for
legislation on power plant emission reduction targets and timetables
that presumably represented its best view of what was necessary and
achievable to protect human health and the environment. The ``Straw''
proposal is thus surely at least one appropriate benchmark against
which to compare CSA, as we have done.)
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
CATF has commissioned a comparison of these proposals using EPA's
own traditional power system cost modeling, emission dispersion
modeling and cost-benefit methods, and employing consultants routinely
retained by EPA to do this work. In all cases, the model assumptions
were calibrated to run ``apples to apples'' comparisons with EPA's 2003
modeling of CSA.
The results are instructive: Each one of the competing proposals
provides significantly greater health benefits than CSA and those
additional benefits far outweigh the additional costs. This analysis is
very conservative because it completely ignores the added environmental
benefits from the added acid rain reduction, added visibility gains,
reduced nitrogen saturation, additional reduced mercury deposition and
constraint of global warming pollution that CSA lacks.
For example, each of the alternative proposals results in
significantly fewer deaths per year in 2020 as compared with CSA--
roughly 2,000 fewer in the case of the Clean Air Planning Act and
nearly 8,000 fewer in the case of the Clean Power Act:
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
These data can be seen geographically in the following maps
illustrating mortality shrinking in the central United States with each
more stringent proposal:
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
On the cost side, the analysis shows that the alternative, tighter
caps and timetables result in very little additional retail cost of
electricity, essentially in the ``noise'' level of the models. This
result is especially notable since the Clean Air Planning Act and Clean
Power Act also include carbon caps that CSA and the ``Straw'' proposal
do not:
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Finally, putting both costs and benefits together, and comparing
the alternative proposals to CSA, it is clear that the additional
benefits in human health and life from the alternative proposals
substantially outweigh their additional costs (including the carbon cap
and added mercury control costs, for which no benefits are counted), by
anywhere from $14 billion to $34 billion annually. Put another way, the
health benefits of additional improvements beyond CSA exceed the
additional costs by as much as 8-to-1:
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
These results are quite consistent with EPA's own analysis
comparing CSA to the Clean Air Planning Act, which found roughly $50
billion in additional annual health benefits in 2020 from the latter as
compared with CSA, with a little bit over $2 billion in added annual
costs:
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
CSA fails to deliver adequate ecological and aesthetic protection
to natural resources as well. For mercury, CSA will result in 284 more
tons of mercury emitted into the environment than the 90 percent
reduction required by a faithful reading of the Maximum Achievable
Control Technology (MACT) requirements of the Clean Air Act (See graph
below):
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
According to EPA's Mercury MAPS tool which predicts how watersheds
will respond to changes in mercury deposition, CSA by 2020 would result
in measurable improvement in only 18 percent of modeled watersheds.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
With respect to Acid Rain, CSA's nitrogen and sulfur caps are too
weak and late to allow recovery of damaged ecosystems even to begin by
2050! At the Hubbard Brook Experimental Forest in New Hampshire,
reductions in sulfur and nitrogen emissions from electric utilities
comparable to those in CSA have been evaluated. These results show
improvements in the pH and acid neutralizing capacity of surface water,
as well as soil percent base saturation and aluminum. However, given
the acid-sensitivity of this site, these emissions reductions would not
achieve full recovery even 50 years after their implementation. The
graph below shows the results for acid-neutralizing capacity relative
to a target of 50 micro-equivalents per liter. These results suggest
that additional reductions in atmospheric deposition of nitrogen and
sulfur would be required to mitigate ecosystem stress due to acid
inputs at the Hubbard Brook Experimental Forest by 2050. A similar
analysis was conducted looking at the current 1990 Clean Air Act,
moderate, and aggressive emission reductions. As shown in the second
graph below, these results also show that chemical recovery would not
be fully achieved under these scenarios at the Hubbard Brook
Experimental Forest.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Likewise, the CSA caps are too lax to yield any noticeable
improvement in visibility in our nation's national parks. The images
below demonstrate the lack of improvement in polluted vistas at two of
our most visited parks: Acadia National Park in Maine and Great Smoky
Mountains National Park between North Carolina and Tennessee.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
In sum, it clearly cannot be said that CSA provides as much human
health preservation of life and environmental protection as can be
cost-benefit justified. To the contrary, on this score, CSA well
underperforms all the other proposals.
But what of feasibility? Critics of more stringent proposals do not
contend that technology to reduce sulfur dioxide emissions (flue gas
desulfurization) or nitrogen oxide emissions (selective catalytic
reduction) are not available to meet the more stringent caps associated
with the ``Straw'' proposal. These are proven, off-the-shelf
technologies. Instead, they contend a bottleneck of labor will prevent
meeting the deadlines of tighter legislation such as the straw proposal
due to a bottleneck of labor availability--chiefly of skilled
boilermakers.
As shown in Appendix 1 to my testimony, and as summarized in the
chart below, this claim does not withstand scrutiny. Using EPA's own
estimates and analysis, the available labor supply is more than
sufficient to meet the deadlines outlined in the ``Straw'' proposal
(which is similar in timing and levels to the Clean Power Act and more
stringent than the Clean Air Planning Act):
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
In sum, CSA offers far too little, too late by way of human health
and environmental protections, while much better alternatives are
available and cost effective. On this ground alone, the subcommittee
should reject CSA.
2. CSA Provides Too Little, Too Late to States Seeking Attainment of
National Soot and Smog Standards
There is another measure by which we can judge the adequacy of CSA:
how well it assists states and cities in meeting their legal
obligations to comply with the 2010 deadlines for attainment of
national soot and smog standards. By this measure, CSA also fares
poorly in comparison to alternative proposals.
Clean Air Act soot and smog attainment is not a theoretical issue
for Governors and Mayors in the South and Midwest. It is one with
important and immediate economic implications. When a region does not
meet clean air standards, it must additional clean-up burdens on new
and existing industrial facilities and can be denied federal highway
funds. At a minimum, nonattainment can--rightly--stigmatize a region
for people who would live or establish businesses there.
Because of CSA's looser caps, and delayed implementation, however,
CSA offers the least help to states and regions seeking attainment, as
shown by the charts below, again from analysis commission by CATF using
EPA's models and methodologies:
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
As the charts demonstrate, CSA leaves 27 counties and 33 million
people breathing unlawfully dirty air in 2010, double the number of
people and a 60 percent increase in counties and left with dirty air by
even the next least stringent bill, the Clean Air Planning Act. Worse,
even in 2020, CSA leaves some 25 million people still in non-attainment
areas--their health and economies unnecessarily threatened. The
adjacent maps below, comparing non-attainment counties (in red) under
CSA and the ``Straw'' proposal in 2010, show that Ohio, Georgia, and
Illinois are among the states that face a noticeably bleaker attainment
situation due to CSA's laxer, slower power plant emission curbs:
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
3. CSA Fails to Address Global Warming, Despite the Availability of a
Variety of Policy Approaches That Address the President's
Concerns
This is not the place to debate the details of global warming
science. This subcommittee has heard extensively from a range of
scientists on this issue. I only note in passing that the National
Academy of Sciences, at President Bush's request, has reviewed the
available science and concluded that the Intergovernmental Panel on
Climate Change had ample evidence for its conclusion that we may see a
warming of as much as 5 degrees Fahrenheit by 2100 due substantially to
human influence.\4\ I also note that the recent Arctic Climate Impact
Assessment, of which the United States was a co-sponsor, concluded that
the Arctic is already showing real evidence of ecological distress due
to human-induced warming.\5\ We can debate the degree of warming likely
to occur, and its ultimate impacts, but the evidence is surely stronger
even than when President Bush first took office in 2001 that human
activity, including fossil fuel combustion from power generation, is
warming the planet.
---------------------------------------------------------------------------
\4\ ``Climate Change Science: An Analysis of Some Key Questions,''
Committee on the Science of Climate Change, Division on Earth and Life
Studies, National Research Council National Academy Press (2001).
\5\ See Arctic Climate Impact Assessment, Impacts of Warming
Arctic, Cambridge University Press, 2004. p. 8.
---------------------------------------------------------------------------
America's power plant fleet accounts for roughly 40 percent of the
nation's anthropogenic CO<INF>2</INF> emissions, and 10 percent of the
world's total anthropogenic CO<INF>2</INF> emissions. Clearly,
addressing global warming will require the US power sector to do its
share.
In his 2000 election campaign, President Bush acknowledged this
evidence and called for capping of CO<INF>2</INF> from U.S. power
plants. In March 2001, the President reneged on that pledge. His stated
reasons were that capping of power sector carbon dioxide would ``lead
to an even more dramatic shift from coal to natural gas for electric
power generation'' and ``significantly higher electricity prices
compared to scenarios in which only sulfur dioxide and nitrogen oxides
were reduced.'' \6\ Presumably reflecting those concerns, CSA contains
no CO<INF>2</INF> limits.
---------------------------------------------------------------------------
\6\ Letter March 13, 2001 from President George W. Bush to Senators
Craig, Roberts, and Hagel.
---------------------------------------------------------------------------
This omission is not only inexcusable as a matter of environmental
policy; it is also unexplainable by the President's own logic. By the
President's own rationale, the authors of CSA should have been open to
discussing power sector CO<INF>2</INF> policies which do not lead to a
``dramatic shift'' from coal to natural gas, or ``significantly higher
electricity prices.''
Several such policies have been proposed, either in legislation or
in public debate, whose effects would not include appreciably greater
gas use or higher electricity prices. For example:
EPA concluded that the price effects of the CO<INF>2</INF> limits
contained in the Clean Air Planning Act were likely to be
``negligible'' assuming availability of worldwide carbon offsets, and
the combined effect of all the Act's requirements, including
CO<INF>2</INF>, would be a mere 6 percent increase in the country's
natural gas-fired generation by 2020 with coal retaining a 45 percent
market share.\7\
---------------------------------------------------------------------------
\7\ As EPA stated, ``Offline analysis showed that the costs of
compliance for the CO<INF>2</INF> constraint would be low due to the
wide availability of inexpensive GHG offsets. The net cost of the
CO<INF>2</INF> cap is negligible.'' EPA Powerpoint Presentation, ``S.
3135, The Clean Air Planning Act of 2002 Presentation for Jeff
Holmstead,'' November 2002, p. 8. For generation figures, see page 13.
---------------------------------------------------------------------------
The McCain-Lieberman bill and other CO<INF>2</INF> constraint
policies were recently evaluated by American Electric Power, the
largest user of coal in the Western hemisphere, and Cinergy
Corporation, the fourth largest. While neither utility endorsed a
specific bill, Cinergy stated its view ``that under a "moderate'
scenario for GHG emission reductions, the necessary rate increases
would not place our region at a competitive disadvantage within the
United States or among most industrialized countries.'' \8\ And AEP
concluded from a similar review that CO<INF>2</INF> curbs in the range
of the McCain-Lieberman bill would not uneconomically strand investment
in existing coal plants.\9\ Both utilities have begun to undertake
voluntary CO<INF>2</INF> reduction programs in the range of those
required by the Clean Air Planning Act and the McCain-Lieberman
bill.\10\
---------------------------------------------------------------------------
\8\ Cinergy Corp. ``Air Issues: An Analysis of the Potential Impact
of Greenhouse Gas and other Air Emissions Regulations on Cinergy
Corp.'' (December 2004) at p. 41.
\9\ American Electric Power Inc., ``An Assessment of AEP's Actions
to Mitigate the Economic Impacts of Emissions Policies,'' (August 31,
2004).
\10\ Bruce H. Braine, ``AEP's Strategy for Managing Climate Change
Risks: The Value of GHG Reductions, EPA's SF6 and the Environment
Conference'', December 1, 2004, p. 10; The Cincinnati Enquirer,
Wednesday, September 10, 2003, ``Cinergy to reduce airborne emissions:
Voluntary effort aims at greenhouse gases''.
---------------------------------------------------------------------------
In a response to a request from Senators Voinovich and others,
EIA estimated the cost of a 2008 power sector carbon cap at roughly
$630 million annually in 2020--a small fraction of 1 percent of power
sector revenues in that year.\11\
---------------------------------------------------------------------------
\11\ Energy Information Administration, ``Reducing Emissions of
Sulfur Dioxide, Nitrogen Oxides, and Mercury from Electric Power
Plants,'' Office of Integrated Analysis and Forecasting U.S. Department
of Energy (September 2001) SR/OIAF/2001-04.
---------------------------------------------------------------------------
In December 2004, the National Commission on Energy Policy, an
expert panel representing the electric, oil, labor, academic,
government and environmental sectors recommended a gradually
implemented economy-wide CO<INF>2</INF> cap, reflecting a reduction in
carbon intensity, with a safety valve and future parameters depending
on developing country measures.\12\ The United Mine Workers
International President welcomed the proposal as ``responsive to the
prior objections of the UMWA and other labor groups concerning the
Kyoto Protocol and other recent climate change legislation circulating
in Congress.'' \13\
---------------------------------------------------------------------------
\12\ National Commission on Energy Policy, ``Ending the Energy
Stalemate: A Bipartisan Strategy to Meet America's Energy Challenges,''
(December 2004).
\13\ United Mine Workers International Press Release, ``United Mine
Workers of America Commends Newly Released Report by The National
Commission On Energy Policy,'' December 8, 2004.
I do not mean specifically to endorse these alternative
CO<INF>2</INF> proposals or analyses. I cite them merely to illustrate
how inexcusable it is that CSA's proponents have not even engaged in a
discussion of potential CO<INF>2</INF> policies based on the
President's own articulated principles. In this respect, CSA reflects a
stance on this important issue well outside the policy and even
electric industry mainstream. For this reason alone, CSA should not be
even seriously considered as a starting point for debating reformed
power sector emissions law.
4. CSA Would Repeal or Undercut Key Protections and Policies in the
Clean Air Act Without Adequate Substitute Safeguards
In general, CSA repeals or significantly weakens many provisions of
existing law that have protected health and the environment since the
enactment of the 1970, 1977, and 1990 Clean Air Act (CAA) amendments,
including:
Interstate air pollution protections;
New Source Review requirements;
Air Toxics controls applicable to the electric power industry;
Provisions designed to bring air quality into attainment with
national standards and to protect areas from air quality degradation;
The deadlines by which states must attain national air quality
standards; and
Visibility protections for National Parks.
For example:
CSA would effectively repeal New Source Review (NSR) for power
plants by:
Changing the definition of the term ``modification'' to mean
a change that ``increases hourly emissions at the unit's
maximum capacity.'' (483(d)(3)) The Clean Air Act currently
applies NSR to a facility if it undergoes a physical or
operational change that causes its annual emissions to increase
significantly. The approach taken in CSA would allow power
plant operators to keep plants operating for a 100 years
without applying modern emission controls. This is a regulatory
immortality provision.
Prohibiting states from applying NSR to modified sources
under their EPA-approved State Implementation Plans. Even if
they are able to retain a program as a matter of state-law
only, see the Savings Clause of 483(e), they cannot take
credit for it in their attainment or maintenance plans. This
preempts more stringent state programs. (483(a) (``An affected
unit shall not be considered a major emitting facility or major
stationary source . . . for purposes of compliance with Part C
and Part D of Title I.'')
Effectively ignoring the effect of emissions from new
facilities on non-attainment areas. Under language inserted
into S. 1844, regulators must ``deem'' that a new facility will
not interfere with attainment efforts in areas with dirty air,
regardless of the data, as long as those areas have been in
``full compliance'' with the Clean Air Act for the preceding
three years (non-attainment designations notwithstanding).
(483(c)(2))
Requiring only ``reconstructed units''--and not ``modified
units''--to ``comply with the either the performance standards
of Section 481 or best available control technology as defined
in Part C of title I for the pollutants whose hourly emissions
will increases at the unit's maximum capacity.'' Compare
483(c) of S. 1844 (preconstruction review requirements
applicable only to ``reconstructed units'') with 483(c) of S.
485 (preconstruction review requirements applicable to
``modified units'').
CSA would repeal the requirements that certain power plants apply
Best Available Retrofit technology (BART) to protect visibility in
National Parks. The requirement is only retained for sources within 50
kilometers of a Class I park area.\14\ (483(a) and (b))
---------------------------------------------------------------------------
\14\ The language of S. 485 would have indirectly repealed the
current case-by-case BART performance standards for new power plant
units. See 483(a) and (b) (new sources located within 50 km of a Class
I area are subject only ``to those provisions under part C of title I
pertaining to the review of a new or modified stationary source's
impact on a Class I area''). The repeal of BART is made clear in S.
1844. See 483(a) (``nor shall [an affected unit] otherwise be subject
to the requirements of [Clean Air Act] section 169A or 169B'').
---------------------------------------------------------------------------
CSA would repeal the requirement that EPA establish a Maximum
Achievable Control Technology (MACT) standard for air toxics emission
from power plants. EPA is left with establishing controls for non-
mercury toxic pollutants with the residual risk provisions of CAA
112(f) in the period 2010-2018. See Section 3(a)(5) of CSA. The effect
is to delay power plant MACT for at least 10 years. Furthermore, new
language inserted into Section 3(a)(5) of S. 1844 establishes
additional criteria that EPA must meet before it can determine whether
it should regulate the emission of non-mercury toxics from power
plants.
Section 3(a)(3) of CSA would eliminate protections against
interstate air pollution by barring the application of any CAA 126
interstate air pollution remedy to power plants before 2012. More
importantly, it creates an impossible showing--the remedy would only be
available after all more cost-effective measures have been applied by
the petitioning state.
CSA would repeal the existing New Source Performance Standard
(NSPS) program (which is designed to evolve with technology) for new
power plants and replace it with a one-shot statutory standard
(essentially foregoing benefits of advances in pollution control
technology) 481. EPA would have no mandatory duty to review and
upgrade the standard to reflect technological advances in pollution
control. CSA would also exempt modified units from NSPS. This section
can be read to exempt new power plants from current NSPS even if EPA
misses deadline for promulgating 481 standards.\15\
---------------------------------------------------------------------------
\15\ 481(c) of CSA would establish the following emissions
standards for new power plants (in lieu of NSPS):
(A) sulfur dioxide in excess of 2.0 lb/MWh;
(B) nitrogen oxides in excess of 1.0 lb/MWh;
(C) particulate matter in excess of 0.20 lb/MWh;
(D) if the unit is coal-fired, mercury in excess of 0.015 lb/GWh,
unless:
(i) mercury emissions from the unit are reduced by 80 percent;
(ii) flue gas desulfurization (FGD) and selective catalytic
reduction (SCR) are applied to the unit; or
(iii) a technology is applied to the unit and the permitting
authority determines that the technology is equivalent in terms of
mercury capture to the application of FGD and SCR.
The performance standards for mercury set forth in the bills were
weakened when the requirements in S. 485 that controls be ``operated so
as to optimize capture of mercury'' were deleted from S. 1844.
---------------------------------------------------------------------------
Section 3(a) of CSA would relax the deadlines by which areas must
attain the revised ozone and PM<INF>2.5</INF> standards by providing
non-complying areas with an automatic extension of their attainment
date to 2015. Current law (CAA 172) requires attainment as
expeditiously as practicable but not later than 5 years after
designation (subject to another 5-year extension, again conditioned on
passing the ``expeditious as practicable test''). Because designations
for the new 8-hour ozone and PM<INF>2.5</INF> standards were made in
2004 and 2005, respectively, the Clean Air Act currently allows
citizens to compel their states to adopt measures that will ensure
attainment no later than 2009 (for ozone) or 2010 (for
PM<INF>2.5</INF>). The current law also allows downwind states to use
CAA 126 to petition for more timely pollution abatement and attainment
planning in upwind states. In contrast, CSA would in effect insulate
states from having to attain before 2015. This is a change made
``necessary'' by the Administration's acceptance of the electric
industry's preferred weak targets and timetables for SO<INF>2</INF> and
NOx controls. By choosing weak cleanup requirements, the Administration
would set in motion a guaranteed delay in meeting health standards from
what would otherwise be feasible (resulting in thousands more premature
deaths, asthma attacks, etc.).
CSA would weaken requirements in existing law designed to bring
areas into attainment with national standards. Section 3(a)(3)(B)
repeals the requirement for application of Lowest Achievable Emission
Rate (LAER) and offset requirements for all sources in areas that get a
new ``transitional'' designation. Under CSA, a nonattainment area can
qualify for the ``transitional'' designation by submitting modeling
that purports to demonstrate that the area will come into attainment by
2015. Facilities in ``transitional'' areas would be subject to the
requirements of the Prevention of Significant Deterioration program
(e.g., BACT), rather than the requirements of the more stringent
nonattainment NSR program (e.g., LAER). In addition:
Under CSA there is no meaningful remedy for continued
nonattainment--if an area is still violating a NAAQS in 2015,
the area is merely required to submit another attainment plan
in 2019. (Section 3(a)(3)(B))
The bills would also weaken requirements that keep clean air
areas from being degraded by repealing the PSD Class II program
as it relates to power plants. Class II PSD areas today protect
the entire country (outside nonattainment and Class I areas).
Instead of having to show protection of Class II PSD increments
(in the law since 1977), a new or modified plant would only
have to show noninterference with NAAQS. As a result, a new or
modified power plant could increase emissions that degrade air
quality all the way up to the level of the NAAQS health
standards.
It would be hard to imagine a more thorough evisceration of
existing Clean Air Act protections than would be performed by CSA.
conclusion
CSA is the wrong policy at the wrong time. It offers too little,
too late in emission reductions to meet key environmental and health
concerns. It strands too much of the country in violation of clean air
standards. It ignores global warming entirely without even attempting
to find a cost effective way forward. And it strips away the procedural
heart of the Clean Air Act while offering only weak and unacceptably
delayed emission caps in return.
Despite the inevitable bureaucratic and legal implementation
challenges of the current Clean Air Act, America would be far better
served by tightening and finalizing the current power sector emission
rules currently in progress than by enacting CSA. We urge the
subcommittee to support that task, and refrain from serious
consideration of CSA as a basis for future power sector policy.
Thank you for your kind attention. I would be happy to answer any
questions the subcommittee may have.
______
APPENDIX 1
availability of boilermaker labor to retrofit power plants with
emission control equipment to meet the requirements of the straw
proposal
David Schoengold
MSB Energy Associates, Inc.
January 17, 2005
Analysis of the available labor pool suggests that under reasonable
assumptions, sufficient boilermaker labor should be available to
implement these scenarios.
The main source of data on labor availability and requirements is
the EPA's ``Final Report--Engineering and Economic Factors Affecting
the Installation of Control Technologies for Multi-Pollutant
Strategies,'' October 2002 (EPA-600/R-02/073). This report analyzes the
need for boilermaker labor to install FGD, SCR, and ACI on a per MW
basis. It also analyzes the availability of boilermaker labor,
including those currently in the work force, the projected increases in
availability of boilermaker labor, and other needs for this resource.
EPA also reported on labor availability and requirements in its
materials in support of the Clear Skies Initiative--specifically in
``Section F--Engineering and Economic Factors Affecting the
Installation of Control Technologies''--however, Section F is less
detailed than the October 2002 report.
According to the EPA report, building an SO<INF>2</INF> scrubber
requires approximately 304 boilermaker man-hours per MW\16\, building
an SCR for NOx removal requires approximately 350 boilermaker man-hours
per MW\17\, and building an ACI for mercury control requires about 5
boilermaker man-hours per MW\18\. Thus, a total of 664 boilermaker man-
hours per MW will provide SO<INF>2</INF>, NOx, and mercury control.
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\16\ A total of 760 man-hours per MW are required, of which 40
percent are boilermakers (page 41 of EPA-600/R-02/073).
\17\ A total of 700 man-hours per MW are required, of which 50
percent are boilermakers (page 41 of the EPA report).
\18\ A total of 10 man-hours per MW are required, of which 50
percent are boilermakers (page 41 of the EPA report).
---------------------------------------------------------------------------
The EPA report also goes through a calculation of the number of
boilermaker man-hours available for the addition of emission controls
(after adjusting for the availability of boilermakers, and the other
needs for boilermaker labor). According to EPA, there were 17,587
boilermakers in 2000 of which 60 percent are available for utility
projects. This number is projected to grow at 5.3 percent per year. To
quote the EPA report,
``Since boilermakers earn more money than most other craft
trades and the demand for boilermakers should be steady and
increasing, it is reasonable to expect that the growth in
boilermaker numbers experienced these last few years should
continue for many more years. To assess the impact of this, it
was assumed that the boilermakers in the United States
continued to grow at the 5.3 percent pace that the
International Brotherhood of Boilermakers, Iron Ship Builders,
Blacksmiths, Forgers, and Helpers have set as a minimum growth
target.'' \19\
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\19\ EPA Report at page 45.
The EPA report assumes that there will be other requirements in the
utility industry for boilermakers (for maintenance and other
construction) of approximately 13.5 million man-hours per year.\20\
---------------------------------------------------------------------------
\20\ EPA Report at page 44-45.
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Based on the current and projected availability of boilermaker
labor and the other demands for that labor, the projected availability
of boilermaker labor for the purpose of constructing emission control
equipment is 13.8 million man-hours in 2005 growing to 21.9 million
man-hours in 2010 and continuing to grow from there. This is enough
boilermaker labor to build add FGD, SCR and ACI to 160 GW by 2010 and
375 GW by 2015. This is shown in Figure 1 below.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
In contrast, the requirements of the Straw Proposal would mean the
installation of 94 GW of FGD and 123 GW of SCR by 2010, and 133 GW of
FGD and 158 GW of SCR by 2015. By 2020, the Straw Proposal would
require the installation of 145 GW of FGD and 164 GW of SCR.\21\ This
is far less than the projected capability of boiler maker labor to
install control equipment.
---------------------------------------------------------------------------
\21\ Requirements for new FGD and SCR equipment to meet the
emission limits of the Straw Proposal and Clear Skies come from the
outputs to the EPA's Integrated Planning Model (IPM) which is used for
analyzing different emissions standards. Modeling of Clear Skies was
done by the EPA, while modeling of the Straw Proposal was done for the
Clean Air Task Force by ICF using the EPA's IPM model.
---------------------------------------------------------------------------
Figure 2 below shows the comparative availability of boilermaker
labor for adding emission control equipment with the need for this
equipment under both the Straw Proposal and Clear Skies.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Figure 3 below shows the equivalent data expressed in boilermaker
man-hours.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
In conclusion, Figures 2 and 3 show clearly that there is expected
to be sufficient boilermaker labor available to meet the requirements
of either the Clear Skies Initiative or the Straw Proposal.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Responses by Conrad G. Schneider to Additional Questions from
Senator Voinovich
Question 1. You claim in your testimony that Clear Skies would not
sufficiently improve watersheds with regard to mercury. We know that
the exposure pathway of concerts is the amount of mercury contained its
fish consumed by women of child-bearing age. Studies such as that
conducted by the Energy Information Administration indicate that
mercury reductions from U.S. power plants will not significantly
decrease the amount of mercury found in fish, given that the amount of
mercury emitted by U.S. power plants is a very small percentage of
total global mercury emissions from man-made and natural sources.
Please provide a list of studies that lead you to conclude that
reductions from U.S. power plants would significantly lower the amount
of mercury contained in fish consumed by woven in the United States of
child-bearing age.
Response. The Clean Air Task Force performed an analysis of the
impact Clear Skies would have on fish mercury concentrations. We
utilized EPA's REMSAD model to estimate mercury deposition under Clear
Skies in 2010 and 2020. The REMSAD results were then used in
conjunction with EPA's Mercury Maps tool to estimate how fish
concentrations would decrease in response to decreases in deposition.
We found that even under the 15-ton cap in 2020, 80 percent of the
modeled watersheds had a reduction in fish mercury concentration of 10
percent or less. This implies that deeper cuts in mercury emissions,
beyond those required by Clear Skies will be needed.
We are aware that the Electric Power Research Institute (EPRI) has
conducted an analysis that concludes that a 70 percent reduction in
power plant mercury emissions would not significantly decrease human
exposure to mercury in the United States. We disagree with many of the
assumptions EPRI uses in this modeling analysis as described below, but
even EPRI's analysis illustrates that for the Midwest and Mid-Atlantic
States, the primary source of mercury deposition is from U.S. sources.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
The primary driver for EPRI's modeling results which indicate
reducing U.S. power plant emissions would not result in decreases in
U.S. deposition, are EPRI's assumptions concerning the magnitude,
atmospheric transport and ultimate deposition of global emissions in
the United States. Basically, EPRI's analysis is driven by assumptions
concerning the contribution of mercury emissions from China. These
assumptions have not been vetted by the broader scientific community
and others, using different assumptions have come to different
conclusions. For example, as shown below, Cohen, et al. in conducting a
similar analysis concluded that the impact of local and regional
sources to mercury deposition in the Great Lakes is far greater than
those of global sources--in contrast to EPRI's findings that global
sources play a larger role in this region.\1\
---------------------------------------------------------------------------
\1\ Cohen et al., in press. Seigneur et al., 2004. As summarized in
Mercury Science Briefing for U.S. EPA, June 23, 2004. Briefing
coordinated by Hubbard Brook Research Foundation.
----------------------------------------------------------------------------------------------------------------
Model 1: Cohen et al.
Lake Regional Component to Model 2: Seigneur et al.
Deposition (EPRI) % USA Sources
----------------------------------------------------------------------------------------------------------------
Superior............................................ 51% 26%
Michigan............................................ 60% 33%
Erie................................................ 93% 60%
----------------------------------------------------------------------------------------------------------------
Similarly, Nelson, et al. have concluded in a recent analysis that
sources within the U.S. play a far greater role than global sources in
U.S. deposition than EPRI estimates.\2\ The fact is that the use of
global models is highly dependent on the assumptions within those
models and there remains considerable scientific uncertainty as to the
validity of those assumptions.
---------------------------------------------------------------------------
\2\ Nelson, S. Mercury Transport and Deposition: Alternate Data
Sets. Presented at the 2005 Electric Utility Environmental Conference.
Tucson, Arizona.
---------------------------------------------------------------------------
In addition, the use of national scale models to assess fish
consumption patterns in the U.S. population and mercury exposure masks
the impact of decreased deposition at the local level. This discrepancy
in predicted impacts is readily apparent when studies using measured
data are consulted. These extensive studies have shown that the primary
source of mercury to aquatic ecosystems is atmospheric deposition.
Reducing mercury emissions will reduce mercury deposition, which in
turn reduces fish concentrations. Two recent studies support a
quantitative link between decreases in mercury deposition and mercury
levels in fish.
In South Florida, incinerator mercury emissions have declined
more than 90 percent since the mid-1980s as a result of pollution
prevention and the issuance of stringent State emission limits. As a
result, mercury in the fish and wildlife of the Everglades has declined
by more than 75 percent since the mid-1990s--a recovery that the
researchers called ``remarkable'' (for both the extent of the recovery
and how quickly it occurred).\3\
---------------------------------------------------------------------------
\3\ Florida Department of Environmental Protection, 2003.
Integrating atmospheric mercury deposition and aquatic cycling in the
Florida Everglades: An approach for conducting a Total Maximum Daily
Load analysis for an atmospherically derived pollutant. Integrated
Summary: Final Report. October.
---------------------------------------------------------------------------
In Wisconsin, researchers found that changes in atmospheric
mercury deposition can have rapid effects on fish mercury
concentrations. A 10 percent decline in mercury deposition correlated
with a 5 percent decline in fish mercury concentration over a period of
1 year.\4\ A 30 percent decline in fish mercury concentration was
measured over a 6-year period. In addition, a concurrent reduction in
acid rain deposition contributed to an additional 30 percent decline in
fish mercury concentrations over the same time period.
---------------------------------------------------------------------------
\4\ Hrabik, T.R. and C.J. Watras, 2002. Recent declines in mercury
concentration in a freshwater fishery: isolating the effects of de-
acidification and decreased mercury deposition in Little Rock Lake. The
Science of the Total Environment, 2002.
As we note in our response to Senator Jeffords' question infra
concerning hotspots, we agree that different mercury species deposit
locally to varying degrees. However, as explained below we disagree
with the assertion that the elemental mercury emissions emitted by U.S.
power plants do not affect waterways in the continental U.S. The fact
is that coal-fired power plants are the largest source of mercury
emissions in the U.S. They are a significant part of the mercury
contamination problem and therefore must be part of any solution. To
reduce fish contamination in U.S. waters, it is evident that mercury
reductions from domestic sources--and power plants in particular--are
---------------------------------------------------------------------------
required.
Question 2. You indicated in your testimony that you prefer EPA's
rules under the existing Clean Air Act to the requirements in Clear
Skies. However, your preference for EPA rules appears to be predicated
on those rules being ``strengthened'' before they are finalized. If
EPA's proposed Clean Air Interstate Rule, Clean Air Mercury Rule, and
Regional Haze Rule are finalized without changes that you believe are
necessary, will you or other environmental groups litigate the rules?
Do you think litigation could delay the implementation of those rules?
Response. The Clean Air Task Force represents a number of
environmental organizations in each of the three pending regulatory
proceedings relating to the power sector: the Clean Air Interstate
Rule, Clean Air Mercury Rule, and Regional Haze Rule. Because no final
rules have yet been issued in any of these proceedings, no decision has
been made to challenge them if, and when, they become final. However,
if the rules are finalized in a form that fails to meet the
requirements of the Clean Air Act, as the current proposals fail to do,
we are confident they will be challenged.
Our position is that under the law, a Maximum Achievable Control
Technology (MACT) rule for utility air toxics must be fully implemented
by 2008 and that the Clean Air Interstate Rule (CAIR) must be fully
implemented by 2010. It is possible that challenges to any final rules
could delay implementation beyond those dates. But the real question
being asked here is whether Clear Skies will deliver superior
environmental performance compared to enforcement of the current Clean
Air Act? In our view, passage of the proposed ``Clear Skies''
legislation would guarantee that the power sector achieves much less
pollution reduction than required under current law much later in time,
even assuming any reasonable delay due to litigation. In fact, Clear
Skies' weak emission targets are not fully achieved until after 2025
(see answer to Senator Lautenberg's Question 1 infra). So, the question
for the environmental community boils down to whether we: (a) fight in
court to achieve pollution cuts twice as deep as those in Clear Skies
achievable potentially by 2010; or (b) lock-in pollution levels twice
as high as allowed under current law and not fully effective until
after 2025? Not surprisingly, our answer is that we will take our
chances in court to achieve the pollution reductions necessary to
protect human health and the environment rather than guarantee failure
by agreeing to Clear Skies' weak and delayed caps.
______
Responses by Conrad G. Schneider to Additional Questions from
Senator Jeffords
Question 1. Should we amend the Clean Air Act to delay the existing
attainment deadlines therein? If so, why?
Response. No. Clear Skies would delay the dates by which areas must
attain the national ambient air quality standards for PM<INF>2.5</INF>
and 8-hour ozone from 2010 to 2015. Additional flaws in the legislation
could allow the delayed 2015 deadline to be pushed back to 2022.
According to U.S. EPA, attainment of the annual PM<INF>2.5</INF>
standard nationally could save the lives of 15,000 people each year.\5\
Thus, Clear Skies 5-year delay in attainment of the PM<INF>2.5</INF>
standard could mean up to 75,000 unnecessary premature deaths. Add an
additional 7 years of delay and the toll could be over 150,000
preventable premature deaths.
---------------------------------------------------------------------------
\5\ U.S. Environmental Protection Agency, Office of Air Quality
Planning and Standards, 1996 Staff Papers on Smog and Soot Pollution:
``Review of the National Ambient Air Quality Standards for Ozone and
Particulate Matter.'' (1996).
Question 2. Do we have a natural gas crisis and will a multi-
pollutant bill that includes carbon dioxide cause it to continue or
start anew?
Response. There is no natural gas ``crisis''. Instead of a crisis,
we have a supply/demand imbalance that needs to be resolved by the
natural gas industry over the next decade.
Natural gas prices today are much higher than prices over the 15-
year period through 2000. The roots of this change have been quite
visible in the last few years and reflect the end of the ``gas bubble''
of the 1990s or more precisely the fact that the balance of supply and
demand for natural gas has been growing tighter in recent years. A
tighter balance between supply and demand results in higher prices and
increased volatility. This does not mean that we are in crisis or are
``running out'' of natural gas; it does mean that gas producers need to
look further afield and spend more money to meet the demand for gas,
and that is reflected in the price.
Resolving our current supply/demand imbalance will require
realistic, though challenging period of growth. It will require large
investments of capital, though not more than has been invested in the
past. It also requires a variety of positive policy decisions such as
support for an Alaskan gas pipeline, development of LNG terminals,
construction of other new pipelines, etc.
More extensive discussion of how our natural gas supply/demand
imbalance evolved and steps the natural gas industry needs to take to
address this imbalance are provided in the following attachments:
A. ``Natural Gas Update'', Energy and Environment Analysis, Inc.,
September, 2003.
B. Testimony of Joel Bluestein, before the Committee on Environment
and Public Works, United States Senate Subcommittee on Clean Air,
Climate Change and Nuclear Safety, Hearings on Power Plant Multi-
pollutant Legislation, May 8, 2003.
Moreover, a multi-pollutant bill should have little or no impact on
natural gas prices and availability. Analyses by the EIA and analyses
by EPA and the Clean Air Task Force (using EPA's IPM model as set up
for EPA's analysis of Clear Skies) show that several proposed power
plant multi-pollutant proposals have little or no impact on natural gas
consumption and prices, as shown in the tables below:
Table A.--Selected results from EIA's ``Analysis of S. 485, the Clear Skies Act of 2003, and S. 843, the Clean
Air Planning Act of 2003 September 2003 Energy Information Administration, September 2003.''
----------------------------------------------------------------------------------------------------------------
Category Base Year (2001) CSI 2025 Carper 2025
----------------------------------------------------------------------------------------------------------------
Natural gas prices................... $4.12/mmbtu $4.14/mmbtu $4.16/mmbtu
Gas-fired power generation........... 411 billion kwh 1452 billion kwh 1637 billion kwh
National natural gas consumption..... 23.26 TCF 35.55 TCF 36.64 TCF
----------------------------------------------------------------------------------------------------------------
Table B.--Projected natural gas generation in 2020 from IPM model analyses of S. 485, S. 843 and the EPA ``Straw
Proposals'' \6\
----------------------------------------------------------------------------------------------------------------
CSI Carper EPA Straw
----------------------------------------------------------------------------------------------------------------
Natural gas and oil power generation. 1531 billion kwh 1560 billion kwh 1590 billion kwh
Natural gas consumption for power 11617 TBTU 11836 TBTU 11617 TBTU
generation.
----------------------------------------------------------------------------------------------------------------
Joel Bluestein's testimony (Attachment A) provides an explanation of why power plant multi-pollutant policies
will have little impact on natural gas prices.
Question 3. Would you support a binding global treaty that required
all nations to reduce their mercury use and emissions?
---------------------------------------------------------------------------
\6\ Clear Skies results are from EPA's IPM analyses; results for
the EPA Straw Proposal and the Carper Bill are from IPM runs conducted
by ICF, Inc for CATF using the same model ``set-up'' assumptions as
used by EPA for their analysis of the Clear Skies Initiative.
---------------------------------------------------------------------------
Response. Yes. Such a global treaty must complement--not replace--
our national efforts to reduce mercury emissions in this country as
required by the Clean Air Act. The U.S. is currently party to such a
treaty, albeit one that needs to be strengthened, as discussed below.
The U.S. is one of 49 members of the 1979 Geneva Convention on
Long-range Transboundary Air Pollution, and one of 24 countries
currently party to the 1998 Aarhus Heavy Metals Protocol to the
Convention. That Protocol, which became effective in December 2003,
initially targets emissions of mercury, lead and cadmium. Among other
things, it requires each party to reduce its national mercury emissions
to 1990 levels, and to set emission limits reflecting best available
control techniques on new sources by 2005 and existing sources by 2011.
The Executive Body for the Convention has recently established a Task
Force to review the effectiveness and adequacy of the Protocol. Metals
may be added and existing requirements strengthened by amendment to the
Protocol.
We support the work of the Convention (although we note that the
U.S. is not a party to a majority of the Convention's substantive
protocols). We believe, however, that the application of best available
control techniques can produce substantially greater reductions in
mercury emissions than presently required under the Heavy Metals
Protocol. Therefore, we believe that the Protocol must be strengthened,
and we would urge the U.S. to propose, or at the least support, an
amendment to accomplish that. We would also urge the U.S. to ratify
those protocols that it has not yet ratified.
We strongly also believe, however, that the Heavy Metals Protocol
should not serve as an excuse to avoid reducing mercury from U.S. power
plants and other sources to the maximum level of achievable reduction
as required by the CAA.
Question 4. A recent Florida study showed that when power plant
emissions were stopped the deposition of mercury in downwind waterways
radically dropped. This should give us serious concern about trading
toxics. Are you at all concerned that toxic hot spots might develop if
we use a cap-and-trade system for toxics like mercury and don't require
at least some minimal reductions at each unit?
Response. Yes. We are concerned about toxic hotspots in the context
of a cap and trade system for mercury. First of all, many regions of
the U.S., particularly the eastern seaboard, are already experiencing
high levels of mercury contamination as evidenced by widespread fish
consumption advisories. At this point in time we are already faced with
``hot regions'' of mercury contamination, not isolated hotspots. The
cleanup of these regions is dependent on reducing the deposition of
mercury.
The local deposition of mercury is highly influenced by the mixture
of different chemical species of mercury emitted by the power plant
because each of these chemical species are deposited locally to a
varying degree.\7\ It is well established that mercury emitted by coal-
fired power plants is a mixture of 3 chemical species: elemental
(Hg<SUP>0</SUP>) oxidized (Hg<SUP>2+</SUP>) and a very small fraction
of particulate-bound mercury. The types of mercury most likely to
deposit close to the source are oxidized mercury and particulatebound
mercury. Elemental mercury is more likely to circulate in the global
atmosphere, however, at some point even elemental mercury is oxidized
(e.g., by ozone) and deposits. Some argue that the elemental mercury
emitted by coal-fired power do not contribute to mercury deposition in
the U.S. However, significant conversion between mercury species may
occur during atmospheric transport, and elemental mercury emitted in
the Western U.S. could well deposit in the eastern U.S. The notion that
elemental mercury emissions simply disappear into the global atmosphere
and never affect the U.S. is incorrect.\8\
---------------------------------------------------------------------------
\7\ EPA, 1997. Mercury Study Report to Congress. Volume III: Fate
and Transport of Mercury in the Environment. 452/R-97-005. December.
\8\ See Mercury Science Briefing for U.S. EPA, June 23, 2004.
Briefing coordinated by Hubbard Brook Research Foundation.
---------------------------------------------------------------------------
In addition, other factors besides mercury species also influence
deposition including the physical characteristics of the power plant
and its location. Characteristics of the boiler, such as the quantity
of coal burned, stack height and the type of air pollution control
device in place, all influence the amount and type of mercury emitted,
and when and where it is deposited. The location of the boiler is
important for a number of reasons:
The climate will affect the wet deposition of air toxics with a
wet climate generally having higher deposition than a dry climate. Also
the predominant wind direction and surrounding terrain influence where
pollutants are deposited.
Watershed characteristics such as erosion potential affect how
much mercury enters the aquatic environment. Erosion potential is
influenced by topography, extent of plant cover, soil erodibility, etc.
The air quality in a region can affect mercury deposition. Ozone
and acid gases (e.g., hydrogen chloride (HCl)) can promote mercury
oxidation, which increases local deposition. High particulate
concentrations could increase dry deposition of mercury.
The health or environmental impact of the emissions will depend
on where people or sensitive ecosystems are located relative to the
power plant, how many people or sensitive organisms are in that
location and whether they are exposed (e.g., to contaminated fish).
The following table summarizes how each of these different
variables may increase or decrease local deposition.
Effect of Various Factors on Local Deposition and Human Exposure
------------------------------------------------------------------------
Effect on Local Mercury
Factor Deposition or Human Exposure
------------------------------------------------------------------------
Air pollution control device........... Generally decrease; more likely
to decrease oxidized Hg
emissions.
High stack height...................... Decrease.
Terrain................................ Variable. Increase where air
dispersion is minimal.
Climate................................ Increase in humid climate;
decrease in arid climate.
High ambient ozone concentration....... Potential increase.
High HCl concentration................. Potential increase.
Reduction reactions in clouds or plume. Potential decrease.
Coal type
Bituminous............................. Increase.
Subbituminous.......................... Decrease.
Lignite................................ Decrease.
Proximity to water body................ Increase.
Consumption of locally caught fish..... Increase.
Poorly buffered or acidic water body... Increase.
------------------------------------------------------------------------
The point is that there are multiple factors that influence when
and where mercury deposits and the subsequent impacts on public health
and wildlife. EPA simply cannot model with certainty whether or where
hotspots will occur. EPA can only predict with a high degree of
uncertainty the likelihood of hotspots and this, in our view is
insufficient for the protection of public health and welfare.
Furthermore, it is particularly troubling that the Clear Skies
legislation effectively removes the authority a state may have to
address local issues with a tighter cap or reduced allowances. The only
way to ensure that deposition is reduced in the most sensitive areas is
to require, as the current CAA does, emission reductions at every
plant. At a bare minimum, any cap and trade legislation should have a
requirement that ensures there are no emission increases at any power
plant from the current year's emissions.
Question 5. What are the costs of not attaining the health-based
NAAQS on the schedule in the current Clean Air Act?
Response. U.S. EPA in its regulatory impact analyses and cost
benefit analysis of Clear Skies values each premature death at roughly
$6 million.\9\ As described above in answer to your first question,
Clear Skies would entail a minimum 5-year delay in attainment of the
annual PM<INF>2.5</INF> ambient air quality standard. EPA calculates
that attainment of that standard would result in 15,000 fewer premature
deaths per year. Thus, the 5-year delay could result in as many as
75,000 unnecessary premature deaths. Failure to meet the attainment
date on time will lead to costs of tens of billions of dollars for each
year of delay.
---------------------------------------------------------------------------
\9\ Source of $6 million figure--EPA Technical Addendum:
Methodologies for the Benefit Analysis of the Clear Skies Act of 2003,
September 2003, page 35.
---------------------------------------------------------------------------
______
Responses by Conrad G. Schneider to Additional Questions from
Senator Lautenberg
Question 1. I understand that under the Clear Skies Act the
reduction goals for SO<INF>2</INF>, NOx, and mercury which are set out
for 2018 aren't actually achieved until after 2025. Can you explain how
power plant operators can delay compliance for such a long time?
Response. The Clear Skies Act allows power plant operators who
reduce their emissions (below the limits set forth in the current Acid
Rain law) ahead of the deadlines in the Clear Skies Act to ``bank''
(i.e., collect) additional emission allowances for those reductions.
Then, they can use those additional allowances after 2018 to cover
emissions which are above the levels set forth in the Act. Only when
the additional emission allowances are used up will the plant operators
actually have to reduce their emissions to the levels set forth in the
Clear Skies Act. The computer models used by the EPA to analyze the
Clear Skies Act (and other approaches to emission reductions) keep
track of the accumulation of allowances for early reductions and show
the expected delay in meeting the preliminary and final goals
accordingly. EPA's own modeling analysis of the Clear Skies bill
predicts that the bill's nominal caps will not be reached until after
2025. See EPA's graphic of sulfur dioxide emissions vs. the cap under
Clear Skies below:
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Question 2. Your testimony discusses a wide variety of weakening
changes found in Senator Inhofe's bill. S. 1844. Do these apply to
industries and pollution sources besides the electric utility industry?
Response. Yes. A wide range of industrial facilities other than
power plants can opt into Clear Skies under 407 of the bill. According
to the bill, ``any unit''--that is, any stationary source of
SO<INF>2</INF>, NOx, or mercury emissions--can opt into Clear Skies
through 407 as long as: (a) it is not an ``affected EGU'' and (b) its
SO<INF>2</INF> and/or NOx emissions are discharged ``through a stack or
duct.'' \10\ If an industrial facility meets those criteria, its
application to opt into Clear Skies cannot be denied by the EPA
Administrator, even if the Administrator determines that approving the
application would be harmful to public health.\11\ In return for their
compliance with Clear Skies' caps on SO<INF>2</INF>, NOx, and mercury
(if applicable), industrial sources that opt in will be exempt from
critical Clean Air Act provisions that limit toxic air emissions,
require new and modified sources to install modem pollution controls,
and reduce the pollution that contributes to visibility-impairing haze
in national parks and wilderness areas.
---------------------------------------------------------------------------
\10\ See S. 131 407(a), 402(30), 402(32). Industrial facilities
that opt in under 407 would be subject to Clear Skies' mercury limits
if they burn solid fuel and vent mercury emissions through a stack or
duct. S. 131 407(a)(2).
\11\ S. 131 407(c).
---------------------------------------------------------------------------
Specifically, Clear Skies could substantially reduce the number of
industrial facilities that are subject to the following pollution
programs:
MACT. Toxic air pollution is addressed under the Clean Air Act
through the establishment of industry-specific pollution control
standards that require facilities to install the ``maximum achievable
control technology'' (MACT).\12\ Under Clear Skies, MACT standards that
regulate toxic emissions from four major industries\13\ would no longer
apply to facilities that opt into the bill's emissions program for
SO<INF>2</INF>, NOx, or mercury. Indeed, even if an opt-in facility
emits only one of the three pollutants regulated under Clear Skies,
that facility would be exempt from MACT requirements that apply to
numerous toxic pollutants. Facilities that are currently subject to
those regulations would not have to control their emissions of any
toxic air pollutant other than mercury.\14\ The list of pollutants for
which this provision of Clear Skies would eliminate existing
regulations includes many that cause cancer and birth defects.
---------------------------------------------------------------------------
\12\ CAA 112.
\13\ If an industrial facility opts into Clear Skies, it will be
exempt from MACT standards that apply to the following industries:
industrial, commercial, and institutional boilers and process heaters;
plywood and composite wood panel manufacturers; reciprocating internal
combustion engines; and stationary combustion turbines. S. 131
407(j)(1)(A).
\14\ S. 131 407(j)(1)(A).
---------------------------------------------------------------------------
NSR. The Clean Air Act's New Source Review (NSR) and Prevention of
Significant Deterioration (PSD) programs currently requires existing
industrial facilities to install modern pollution controls when they
make a physical or operational change that causes their actual annual
emissions to increase significantly.\15\ Under Clear Skies, however,
industrial facilities that take advantage of the bill's opt in
provision are exempt from NSR and PSD until 2025, as long as they limit
their emissions of particulate matter.\16\ In effect, these facilities
are given a 20-year grace period during which they can make any number
of changes that cause significant amounts of new pollution, all without
having to update their pollution control systems.
---------------------------------------------------------------------------
\15\ CAA 111(a)(4), 165(a), 173(a).
\16\ S. 131 407(k)(1).
---------------------------------------------------------------------------
VISIBILITY IMPROVEMENT. Additionally, the Clean Air Act requires a
broad range of industrial facilities to install the ``best available
retrofit technology'' (BART) if such a facility emits pollution ``which
may reasonably be anticipated to cause or contribute to any impairment
of visibility'' in national parks and other specially protected Class I
areas.\17\ That requirement would no longer apply to the vast majority
of industrial facilities opting into Clear Skies. Instead, these
facilities will be exempt from the Clean Air Act's BART requirement
until 2025, provided they limit their particulate matter emissions.\18\
The only visibility improvement provision that would apply to
industrial facilities that opt into Clear Skies is a requirement that
new or modified facilities comply with PSD if they are located within
50km of a Class I area.
---------------------------------------------------------------------------
\17\ CAA 169A.
\18\ S. 131 407(k)(1).
Question 3. Aren't there available technologies that can reduce
mercury from coal-fired power plants to a far greater degree than
required by S. 1844?
Response. Yes. There are several approaches\19\ available to reduce
mercury emissions to a greater degree that the 70 percent national
reduction required by S. 1844, including:
---------------------------------------------------------------------------
\19\ U.S. EPA, 2002. Control of mercury emissions from coal-fired
electric utility boilers: Interim report including errata dated 3-21-
02. Office of Research and Development. EPA-600/R-01-109. April.
Coal cleaning as a pre-combustion alternative,
Installing conventional controls,
Optimizing the mercury capture of existing control devices,
Adding mercury-specific controls, and
Multipollutant approaches (e.g., strategies to simultaneously
reduce mercury, NOx, SOx and particulate matter (PM)).
Coal cleaning removes about 23 percent of the mercury in the coal
and is currently used for about 77 percent of eastern coals.\20\ Coal
cleaning can thus offer additional mercury reduction for units not
already burning cleaned coal and a new precombustion cleaning
technology is now available for subbituminous coals that remocs on
average 70 percent of the mercury.\21\
---------------------------------------------------------------------------
\20\ U.S. EPA, 2002. Control of mercury emissions from coal-fired
electric utility boilers: Interim report including errata dated 3-21-
02. Office of Research and Development. EPA-600/R-01- 109. April
\21\ See http://www.kfx.com.
---------------------------------------------------------------------------
Conventional NOx and SO<INF>2</INF> controls on existing boilers
already capture on average about 36 percent of the mercury--with some
configurations capturing well in excess of this amount. In addition, we
have seen from EPA's own analysis that adding conventional controls to
existing boilers will capture an additional 29 percent of the
mercury.\22\ For boilers that already have controls, optimizing the
performance of these devices for mercury removal (e.g., adding a bag to
an existing fabric filter) has the potential would increase mercury
capture by these controls at least 10 percent.
---------------------------------------------------------------------------
\22\ U.S. EPA, 2003. Performance and cost of mercury and
multipollutant emission control technology applications on electric
utility boilers. Prepared for Office of Research and Development. EPA-
600/R-03-110. October.
---------------------------------------------------------------------------
Technologies designed to specifically capture mercury, or that
offer Multipollutant benefits are in various stages of development
ranging from commercially available to bench-scale testing. The mercury
capture efficiency of several of these technologies is summarized in
Table 1.
---------------------------------------------------------------------------
\23\ NESCAUM, 2003. Mercury emissions from coal-fired power plants:
the case for regulatory action.
\24\ U.S. EPA, 2003. Performance and cost of mercury and
multipollutant emission control technology applications on electric
utility boilers. Prepared for Office of Research and Development. EPA-
600/R-03-110. October.
\25\ Environmental Energy Insights. M.J. Bradley and Associates.
Volume VII, Issue 1, January/February 2004.
\26\ ADA-ES, Inc. Presented at PowerGen, December 2004.
Table 1.--Mercury-Specific or Multipollutant Control Technologies 23,
24, 25, 26
------------------------------------------------------------------------
Percent Mercury
Mercury Control Approach Capture Comments
------------------------------------------------------------------------
Conventional coal cleaning..... 23%................ Average removal
for eastern
bituminous coals.
Optimization of existing Variable........... Incremental
controls. increase in
performance.
Installation of conventional 29%................ National reduction
controls. achievable
through
implementation of
proposed CAIR
rules.
Activated carbon injection with 60%................ Addition of a
ESP for PM control. small fabric
filter would
increase the
capture
efficiency to
90%. Saving in
sorbent costs
would payback the
cost of the
fabric filter in
3 to 4 years.
Halogenated activated carbon 90+%............... Month-long test
injection with ESP for PM achieved average
control. 94% control
efficiency.
Activated carbon injection with 90%................ For subbituminous
existing fabric filter for PM and lignite
control. coals, an
activated carbon
that is treated
with iodide,
sulfur or bromine
would probably be
needed to achieve
this high level
of reduction.
COHPAC-TOXECON................. 90+%............... This configuration
is a small fabric
filter in
combination with
activated carbon
injection. High
capture
efficiency for
all coal types.
Enhanced wet scrubbing......... 50-80%............. Control
efficiencies vary
with scrubber
chemistry. Avoids
excess carbon in
the fly ash.
K-Fuel........................ 70%................ Advanced coal
cleaning
techniques for
subbituminous
coals.
Powerspan--ECO................ 80-90%............. Multipollutant
control. Also
removes 98% of
SO2, 90% of NOx,
and 99.5% of
PM2.5.
Advanced Hybrid FilterTM....... >90%............... Used in
conjunction with
activated carbon
injection.
Airborne Process............... Up to 75%.......... Multipollutant
control. Also
removes >95
percent of SO2,
60 to 79% of NOx.
LoToxTM Process................ >90%............... Multipollutant
control. Also
removes >90% NOx.
MerCAPTM....................... >80%...............
------------------------------------------------------------------------
ESP = electrostatic precipitator, PM = particulate matter
To address the question of control technology availability, in 2003
Senator Jeffords requested information concerning the availability and
performance of mercury control technologies.\27\ In response, five
pollution control equipment vendors reported the following regarding
commercial availability of mercury controls:
---------------------------------------------------------------------------
\27\ The Real Status of Mercury Control Technology--December 3,
2003. Statement of James M. Jeffords, Ranking Member, Senate
Environment and Public Works Committee Pending EPA Proposal to
Deregulate Mercury. December 3, 2003.
Two companies were confident their technologies can reduce
mercury emissions from power plants by at least 80-90 percent from all
types of coal combustion.
One of these two technologies can achieve even greater than 90
percent capture of mercury from the harder-to-control western
subbituminous and lignite coals.
Three out of the five companies responding indicated that their
technologies are currently available commercially.
The remaining two planned to enter the market in 2004 and 2005.
In addition, options for optimizing criteria pollutant controls for
mercury capture are immediately available, as is the option for adding
additional conventional controls (e.g., NOx and SO<INF>2</INF>
controls) to existing units. Table 2 summarizes the current state of
development of some mercury controls. There are numerous other
variations of these technologies under development (e.g., different
activated carbon-based sorbents) that are too numerous to list here.
---------------------------------------------------------------------------
\28\ NESCAUM, 2003. Mercury emissions from coal-fired power plants:
the case for regulatory action.
\29\ U.S. EPA, 2003. Performance and cost of mercury and
multipollutant emission control technology applications on electric
utility boilers. Prepared for Office of Research and Development. EPA-
600/R-03-110. October.
\30\ Environmental Energy Insights. M.J. Bradley and Associates.
Volume VII, Issue 1, January/February 2004.
Table 2.--State of Development of Mercury Controls 28, 29, 30
----------------------------------------------------------------------------------------------------------------
Projected Availability
Mercury Control Approach Commercial Status Date Comments
----------------------------------------------------------------------------------------------------------------
Conventional coal cleaning........... Available.............. Currently available.... An option for 23
percent of eastern
coals. See K-Fuel for
western coals.
Optimization of existing controls.... Available.............. Currently available.... Additional 10% control
achievable on existing
units.
Installation of conventional controls Available.............. Currently available.... 30% reduction projected
to meet other emission
limits for PM2.5.
Activated carbon injection........... Available.............. Currently available.... Systems for power
plants now being
offered by ADA-ES a
and Sorbent
Technologies.
COHPAC-TOXECON....................... Available.............. Currently available.... Both components now
commercially
available. Full-scale
tests complete on
integrated system. 5-
year full-scale test
will finish in 2007.
Enhanced wet scrubbing............... Near commercial........ 2005...................
K-Fuel.............................. Near commercial........ Early 2005.............
Powerspan--ECO...................... Near commercial........ 3rd qtr 2004...........
Advanced Hybrid FilterTM............. Emerging............... ....................... Pilot-scale tests.
Airborne Process..................... Emerging............... ....................... Pilot-scale tests.
LoToxTM Process...................... Under Development...... ....................... Bench-scale tests.
MerCAPTM............................. Under Development...... ....................... Bench-scale tests.
MB Felt Filter....................... Under Development...... ....................... Bench-scale tests.
----------------------------------------------------------------------------------------------------------------
aSee http://www.adaes.com
More recently, on January 31, 2005, the Institute of Clean Air
Companies (ICAC) presented a briefing to Senate staffers entitled
``Advances in Mercury Control Technology to Meet Future Needs.'' In
this briefing, ICAC states that primary mercury capture technologies
are available. These include activated carbon injection (with several
different types of sorbent), flue gas desulfurization, advanced
precombustion coal cleaning, particulate matter collection devices and
multipollutant controls. In addition, continuous mercury monitors are
now on the market from at least 6 suppliers. There is currently
sufficient supply of activated carbon to supply the needs of States
with new mercury rules with additional needed to meet the needs of a
Federal standard.
In response to EPA's Notice of Data Availability, Sorbent
Technologies Corporation states that activated carbon injection (ACI)
systems are simple and easily commercially available. Full-scale ACI
systems have already been installed on at least 20 U.S. coal-fired
boilers in temporary ACI trials and about another 20 systems will be
installed over the next 2 years in additional full-scale ACI
demonstrations. According to Sorbent Technologies, little distinguishes
these temporary full-scale installations from permanent ACI systems
except, perhaps, permanent piping rather than flexible hoses, more
permanent foundations, or larger activated carbon storage silos.
Sorbent Technologies Corporation's first B-PACT<SUP>TM</SUP> mercury-
sorbent manufacturing plant became available for continuous power plant
use in September of 2004. Sorbent Technologies states:
Consequently, all EPA utility mercury policymaking
deliberations, including modeling analyses, should consider
brominated ACI technology available for full-scale retrofit
implementation with every coal type, on every coal-fired
utility boiler, in 2005.\31\
---------------------------------------------------------------------------
\31\ Sid Nelson, Jr., President, Sorbent Technologies Corporation
to William Maxwell, U.S. EPA. Part I of comments filed by Sorbent
Technologies in response to the Notice of Data Availability. December
30, 2004.
Despite statements by the manufacturers of pollution control
equipment that mercury control technology is available and there is
sufficient labor to install it, industry has and will argue that the
availability of control technology means more than simply having the
equipment on hand. In industry's view, there must be adequate testing
and long-term demonstrations before a technology is really
``available'' to reliably meet emission controls requirements. Taking
that view, can we really say that mercury control technology is
currently available? We believe the answer is yes. ADA-ES, Inc. has
explored the issue of new technology acceptance in the electric power
sector and their analysis lends valuable insight into where mercury
control technology is today in terms of commercialization and
adoption.\32\ Basically, the development and acceptance of new
technology has followed 6 steps. They are:
---------------------------------------------------------------------------
\32\ Bustard, J. and Durham, M., 2004. Air Pollution Control
Equipment New Technology Acceptance Process. Presented at: AWMA 97Th
Annual Conference and Exhibition, Indianapolis, IN. June 22-25, 2004.
1. Laboratory testing,
2. Pilot-scale testing,
3. Full-scale field tests,
4. Full-scale tests at multiple sites,
5. Long-term demonstration at several sites, and
6. Widespread implementation.
Regarding the first 2 steps, laboratory and pilot-scale testing of
mercury control technologies took place in the early to mid-90s. Full-
scale field tests, including full-scale tests at multiple sites were
completed during 2001-2003 as Table 3 illustrates. In Table 3, the
facilities are listed by coal type and within each coal type by roughly
a chronological order. Thus, it is apparent that during the later
tests, as the technology has rapidly advanced, the mercury capture
efficiency has increased to the 90 percent range across all coal types.
In addition, it can be seen that the earlier tests required
considerably more carbon to achieve the same results as the later tests
with halogenated sorbents. The need for less carbon will considerably
reduce control costs.
Step 5 entails long-term demonstrations at multiple sites. A year-
long test has already been completed at the Gaston plant (average
reduction 86 percent with an average-performing sorbent) and 3 other
month-long tests have also been completed with success.\33\ \34\ As
shown in Table 4, numerous other full-scale tests at a variety of
plants are either ongoing or scheduled in the 2004-2005 timeframe.
---------------------------------------------------------------------------
\33\ ADA-ES, Inc. Presented at PowerGen, December 2004.
\34\ Sid Nelson, Jr., President, Sorbent Technologies Corporation
to William Maxwell, U.S. EPA. Part I of comments filed by Sorbent
Technologies in response to the Notice of Data Availability. December
30, 2004.
---------------------------------------------------------------------------
We also note that state mercury rules will be going into effect by
2008, which will provide additional long-term commercial experience
with mercury controls. Compliance with some of the state rules begins
in 2008; consequently these facilities will have installed, tested and
operated ACI systems long before the compliance date. By 2008, 15
boilers in Massachusetts, Connecticut and New Jersey will be
controlling mercury by more than 90 percent. These bituminous-fired
boilers have control configurations that are similar to 60 percent of
the fleet and will provide the early proving ground that industry
maintains is needed prior to widespread implementation of this
technology.
Given this systematic evolution of the adaptation of activated
carbon technology to the power sector, we are confident that this
technology will be available prior to 2010. We also note once again for
the record that not all plants will need to use ACI to achieve a
stringent standard. Conventional controls will achieve a stringent
emissions level for many plants and precombustion controls and other
technologies (e.g., oxidizing catalysts and multipollutant controls)
will also be options.
Table 1.--Full-Scale Tests of Sorbent Injection Completed: 2001-2003
----------------------------------------------------------------------------------------------------------------
Existing Control Injection Rate Percent Mercury
Site Coal Equipment (lbs/mmacf) Capture
----------------------------------------------------------------------------------------------------------------
Brayton Point................... Low Sulfur ESP (2) 10 94.5%
Bituminous.
PGE............................. Low Sulfur ESP 10 90%
Bituminous.
Cliffside....................... Low Sulfur HS-ESP 6.4 >80%
Bituminous.
Gaston.......................... Low Sulfur HS-ESP/COHPAC 0.55 86%
Bituminous.
Lausche......................... High Sulfur ESP 4 70%
Bituminous.
St. Clair....................... Bit./Sub. Blend.... ESP 3 90%
Pleasant Prairie................ Subbituminous...... ESP 11.3 66%
St. Clair....................... Subbituminous...... ESP 3 94+%
Holcomb......................... Subbituminous...... SDA/FF 1.2 93%
Meramac......................... Subbituminous...... ESP 3 90%
Stanton 10...................... Lignite............ SDA/FF 1.5 95%
Stanton 10...................... Lignite............ SDA/FF 1.5 90%
----------------------------------------------------------------------------------------------------------------
ESP(c) = cold-side electrostatic precipitator, HS-ESP = hot-side electrostatic precipitator, FF = fabric filter,
SDA = spray dryer adsorber
Source. ADA-ES, Inc. Presented at PowerGen, December 2004.
Table 2.--Full-Scale Tests of Sorbent Injection Ongoing and Scheduled: 2004-2005
----------------------------------------------------------------------------------------------------------------
Existing Control
Site Coal Type Equipment Testing Company
----------------------------------------------------------------------------------------------------------------
Gaston.............................. Low Sulfur Bituminous.. FF ADA-ES
Holcomb............................. Powder River Basin..... SDA/FF ADA-ES
Arapahoe............................ Powder River Basin..... FF ADA Tech
Stanton 10.......................... ND Lignite............. SDA/FF Apogee
Yates 1............................. Low Sulfur Bituminous.. ESP/FGD URS
Yates 2............................. Low Sulfur Bituminous.. ESP URS
Leland Olds......................... ND Lignite............. C-ESP EERC
Meramec............................. Powder River Basin..... C-ESP ADA-ES
Buck................................ Low Sulfur Bituminous.. H-ESP, C-ESP Sorbent Tech
St. Clair........................... PRB/Bituminous......... C-ESP Sorbent Tech
Miami Fort.......................... High Sulfur Bituminous. C-ESP ADA Tech
Conesville.......................... High Sulfur Bituminous. ESP/FGD ADA-ES
Nanticoke........................... PRB/Bituminous......... ESP ADA-ES
Arapahoe............................ Powder River Basin..... FF ADA Tech
Antelope Valley..................... ND Lignite............. SDA/FF EERC
Stanton 1........................... ND Lignite............. C-ESP Apogee
M.R. Young.......................... ND Lignite............. FGD EERC
Monticello.......................... TX Lignite............. FGD EERC
----------------------------------------------------------------------------------------------------------------
C-ESP = cold-side electrostatic precipitator, HS-ESP = hot-side electrostatic precipitator, FF = fabric filter,
SDA = spray dryer adsorber
Source. ADA-ES, Inc. Presented at PowerGen, December 2004
Question 4. The U.S. PIRG report, ``Pollution on the Rise'' found
that more than half of the nation's dirtiest power plants increased
their SO<INF>2</INF> emissions in spite of existing air pollution
control regulations. Could this continue to happen under S. 1844?
Response. Yes. Because the Clear Skies Act allows for the trading
of emission allowances between power plant operators (subject only to a
very broad Eastern U.S. versus Western U.S. limitation on trading),
there is nothing in the Act that will prevent any power plant from
increasing its emissions. That determination will involve each plant
operator comparing the cost of reducing his own emissions to the cost
of buying emission allowances from another plant operator.
In general, the more a plant emits, the less it costs (per ton) to
reduce emissions, so it is likely that the highest polluters will
reduce their emissions rather than buy large amounts of emission
allowances. This cannot, however, be assured. Many large polluters
chose to meet the requirements of the Acid Rain law by buying
allowances rather than cleaning up emissions. The same thing could
happen under Clear Skies.
__________
Statement of Fred Parady, Manager, Environmental Services, OCI Wyoming,
L.P., on Behalf of the National Association of Manufacturers
Good morning, Mr. Chairman and members of the committee. I am Fred
Parady, Manager of Environmental Services for OCI Wyoming, L.P. Since
1962, we have operated a 400-employee, 4-million-ton-per-year
underground trona mine and 2.3-million-ton-per-year soda ash refinery
located near Green River, Wyo. Today, I am pleased to testify on behalf
of the National Association of Manufacturers (NAM) in support of the
Clear Skies Act of 2005, which you, Mr. Chairman, and full committee
Chairman Jim Inhofe have just introduced.
As you undoubtedly are aware, the NAM is the nation's largest
industrial trade association representing small and large manufacturers
in every industrial sector and in all 50 states. The NAM's mission is
to enhance the competitiveness of manufacturers and improve American
living standards by shaping a legislative and regulatory environment
conducive to U.S. economic growth. In light of our dedication to that
mission, the NAM commends the subcommittee chairman and Chairman Inhofe
for preparing legislation intended to provide increased emissions
reductions in a way that will also provide greater regulatory certainty
and flexibility.
A number of the NAM's members are electric generators and coal
producers, and they would be directly affected by this legislation.
Other NAM members have large industrial boilers and would be eligible
for the ``opt in'' provisions in your legislation. However, virtually
all the members of NAM members use electricity as a major source of
energy, and for the vast majority of them electricity is the largest
energy cost. In fact, the manufacturing sector (excluding electric
generation) uses about one-quarter of the nation's energy, including
almost one-third of its natural gas and 30 percent of its electricity.
According to a recent NAM study, external overhead costs, including
regulation and rising energy prices, add approximately 22 percent to
U.S. manufacturers' unit labor costs (nearly $5.00 per hour worked)
relative to their major foreign competitors. More specifically, as a
percentage of output, American manufacturers spend considerably more on
pollution abatement than do their competitors in Germany, Japan,
France, the United Kingdom, Canada, Mexico, China, South Korea and
Taiwan. Therefore, NAM member companies' ability to compete in the
highly competitive international marketplace is directly affected by
any legislation that would have a major impact on such a broadly used
and a significant input cost as electricity.
I would like to briefly address specifics germane to the soda ash
industry in southwest Wyoming. For more than 50 years, Sweetwater
County has been home to the domestic soda ash industry. The industry is
predicated on three fundamentals: affordable energy, the availability
of trona ore and water supply. The world's largest natural deposits of
trona ore are found in our county, with an estimated 600 years of
reserves at current economics and consumption rates. Soda ash is the
fifth largest bulk commodity chemical in the world, used in all types
of glass manufacturing (container, consumer, etc.) pollution controls,
and as a chemical feedstock. Mr. Chairman, soda ash is the most costly
raw material for glass plants operating in your home state of Ohio,
such as Libby Glass in Columbus and Thompson Electric, a television
manufacturer near Columbus.
Four operations currently mine approximately 16 million tons of
trona ore and refine it into more than 10 million tons of soda ash,
employing more than 2,300 people in the process with solid jobs that
build retirements, support kids in college and pay the bills. The
industry is Wyoming's leading international export, accounting for 85
percent of Wyoming's export trade. Soda ash is shipped from Sweetwater
County to more than 30 countries, contributing more than $500 million
as a surplus to the overall U.S. balance of trade. The domestic market
for soda ash, however, has been stagnant for nearly 20 years (increased
use in some markets has been offset by the increased use of plastic
bottles and other factors). The prospects for growth in our industry
hinge on growing our markets offshore, and therefore, hinge on stable
energy prices at home.
To put things in perspective, in the 15 years between 1982 and
1997, this industry enjoyed a steady and significant growth in exports.
Just in the five years from 1992 to 1997, export growth volume grew 100
percent. Since then, export growth has been marginal, with exports in
2003 only 4 percent above their 1997 levels. The natural soda ash
industry is the cleanest in the world, yet faces intense competition
from China. Chinese soda ash operations do not meet our environmental
or labor standards, yet compete voraciously on the world market for our
customers. As recently as 1989, China imported more than 1 million tons
per year of soda ash. Next year, we expect them to be a 1.5-million-ton
exporter. I should note that the Chinese produce soda ash
synthetically, using salt, coal and limestone, which are readily
available but also produce substantial environmental problems in their
system.
The year 2003 marked a milestone for our industry, as China
overtook the United States for world leadership in soda ash production
for the first time in history. China has quadrupled their soda ash
capacity in the last decade, from less than 3 million tons per year to
more than 11 million tons. China's undervalued currency, unregulated
environment and unfair labor practices are undermining this core
Wyoming--and U.S.--industry.
Finally, I would like to briefly address energy costs directly for
our industry. Energy price volatility, for both electricity and natural
gas, are causing the soda ash industry to lose its ability to reinvest
in the industry. Natural gas price volatility and annual rate increases
from our electrical utility are forcing our site to consider
retrofitting our calciners to coal. The Clear Skies initiative would
strengthen our ability to pursue this project, thus assuring both
investment and long-term energy price stability.
Returning to the general energy picture in the United States,
should the maze of current clean air requirements and the litigation
that inevitably adds uncertainty and delay have the effect of forcing
electric utilities to switch from coal to natural gas, the consequences
to industry--and to the general public--could be devastating, and
already has had a significant impact. Already, the 66 percent increase
in natural gas used to generate electricity since 1990 has contributed
to the high cost of natural gas, which has had an adverse impact on the
manufacturing sector since mid-2000.
The chemical industry alone estimates that 100,000 jobs were lost
since 2000 as a direct result of the high natural gas prices due to the
gas supply and demand imbalance. More than half of the fertilizer
capacity in the United States is shut in or closed permanently. The
chemical industry has gone from the lead net export industry in the
United States to a net importer of chemicals. Other industries,
including plastics, aluminum, steel, metal heat treating, glass and
paper are struggling to stay afloat in the current natural gas cost
environment. Unless there is a rational investment future for coal-
burning electricity generation, prudent electricity providers will be
continuing to build units using natural gas or restart the many natural
gas electricity units that are currently not operating because of the
high costs of natural gas. Clearly, more generation of electricity with
natural gas will create even more upward pressure on natural gas prices
and electricity prices, which would impede the manufacturing recovery
now fully underway after a loss of almost three million manufacturing
jobs between 2000 and early 2004. The NAM certainly supports nuclear
power as another form of electricity generation to meet our future
energy needs, but the long lead times and required changes in the
public attitude make it difficult to significantly expand nuclear power
for the next decade or so.
The National Association of Manufacturers supports the concept of
multi-emissions legislation, and supports the changes that you, Mr.
Chairman and Chairman Inhofe, have made to the Administration's
original legislative proposal. The goal of effective multi-emissions
legislation must be to reduce pollution while replacing conflicting and
problematic regulations for the electric utility industry with one
clear set of rules that will improve upon the gauntlet of current
requirements and litigation. The U.S. economy must have adequate,
reliable and affordable supplies of electricity. Clear Skies
legislation would provide electricity generators with the regulatory
certainty and flexibility that is essential for rational investment
decisions needed to meet both objectives of cleaner air and affordable
power from coal.
Your legislation, the Clear Skies Act of 2005, represents the most
rational and realistic multi-emissions proposal introduced in more than
a decade. Other bills that were proposed in the last Congress, such as
S. 366, The Clean Power Act, and S. 843, The Clean Air Planning Act,
represent unacceptable approaches. They included carbon dioxide
(CO<INF>2</INF>) mandates and set unreasonable emissions targets and
timetables superimposed on top of existing Clean Air Act regulations,
which would result in the loss of more valuable U.S. manufacturing
jobs. Such oppressive versions of multi-emissions legislation would
unnecessarily raise energy costs while providing no compelling benefits
to human health, the environment or national security beyond the
benefits that the Clear Skies Act would provide. Unreasonably stringent
emission-reduction targets would waste capital dollars that otherwise
can be dedicated to increasing productivity, energy efficiency and
employment and raise energy costs for all consumers. In addition,
mandatory CO<INF>2</INF> cuts would limit the use of fossil fuels--
particularly the use of abundant and affordable domestic coal, which
has severely damaged our economy while yielding infinitesimal, if any,
benefits to the global climate system.
``Business-as-usual'' under the current archeological pile of Clean
Air Act provisions and regulations, some almost 35 years old, is also
an unacceptable alternative. The overlapping, conflicting, burdensome,
single-emission provisions of the existing Clean Air Act will continue
to result in significant uncertainty, delays for legal challenges,
short planning and construction time periods and, ultimately, higher
electricity costs and unstable natural gas markets. In general, the
Clear Skies Act balances the various needs we have detailed above in a
more effective manner than other multi-emissions proposals or current
law.
Importantly, the chairman's legislation would enact reforms that
expressly replace many of the current Clean Air Act requirements for
electric generators. The current regulatory structure of the Clean Air
Act encourages litigation, discourages innovation and reduces
utilities' flexibility to effectively plan to reduce air emissions in
the most cost-effective manner. In addition, numerous ongoing and
anticipated future rulemakings further jeopardize the viability of coal
by injecting uncertainty in the future use of coal for electricity
generation. As it phases in increasingly strict emissions requirements,
the Clear Skies Act must replace--not just be added onto--current Clean
Air Act regulation. Simply imposing additional reduction requirements
as overlays to the current regulatory structure will further complicate
the regulatory maze now governing power plants. Specifically, the Clear
Skies Act supports the use of cap and trade for mercury controls,
rather than a unit-by-unit ``maximum achievable control technology''
(MACT) requirement; coordinates the Section 126 petition process with
the reductions and schedule in the bill; reforms new source review
(NSR) for new and existing electric generators; and also addresses the
redundant control requirements established under the ``best available
retrofit technology'' (BART) and the regional haze program.
The NAM believes that a Clear Skies Act that is consistent with the
following principles provides the best opportunity to make further
progress on emission reductions in an economically and environmentally
sound manner.
The Clear Skies Act must remain a three-emission bill--sulfur
dioxide (SO<INF>2</INF>), nitrogen oxides (NOx) and mercury. The NAM
does not believe it is appropriate to include carbon dioxide
(CO<INF>2</INF>) provisions in this legislation, since CO<INF>2</INF>
is not a pollutant and is not regulated, nor required to be regulated,
under the Clean Air Act. More importantly, the NAM strongly opposes any
legislative proposal that would establish CO<INF>2</INF> mandates.
Creating any new regulatory scheme for CO<INF>2</INF> emissions would
severely depress the U.S. economy. Instead, the NAM believes that the
best way to develop and implement the goals of climate change policy is
through a strong economy with incentives coupled with removal of
disincentives for energy efficiency and environmental improvements. For
the record, the NAM notes that the majorities in the Congress and this
Administration are on record as opposing regulation of carbon
emissions. We urge the committee to avoid encumbering this vitally
important legislation with such controversial provisions.
The Clear Skies Act should not extend its mandates to either
current or future industrial boilers or non-utility combined-heat-and-
power systems (CHP), but should provide such industrial units with the
opportunity to voluntarily opt in to the benefits and obligations of
the cap-and-trade program. In virtually all cases, CHP units are a
source of highly efficient power with correspondingly low emissions.
Hundreds of industrial facilities depend on the economic efficiencies
of CHP. In fact, the President's National Energy Policy recommends the
increased use of CHP systems to improve energy efficiency and decrease
air emissions. Also, the President's global climate change initiative
relies on more energy-efficient technologies, like CHP, to achieve its
goals. The ability of CHP units to receive an allocation incentive and
opt in to meet the rigors of multi-emissions limitations without
infringing on the otherwise available pool of emissions credits would
not only encourage additional investments in CHP emission controls, but
also meet the energy security goals of the United States.
The Clear Skies Act must support the continued and increased use of
coal for electric power generation. The NAM in the strongest terms
urges the Congress to ensure that any emissions caps and timetables
mandated in final Clear Skies legislation avoid causing investors in
electricity generation to choose scarce natural gas over abundant and
more affordable coal for the preferred energy source to power America's
ever-growing energy needs.
In this context, Mr. Chairman, the NAM is particularly concerned
about the mercury emission levels that would be part of final Clear
Skies legislation. Significant reductions of mercury will occur under
the current bill's Phase I caps for SO<INF>2</INF> and NOx. Going
beyond this level of control too soon could force the premature closing
of many existing coal-fired power plants in favor of new natural gas
facilities, further straining already limited natural gas supplies. In
addition to control technology concerns, emerging scientific research
suggests that reducing mercury emissions from the U.S. power generating
sector does little to reduce the amount of mercury deposition in the
United States and has even less effect on the levels of methylmercury
in fish that is consumed by Americans. For these reasons, we support
the Phase I mercury reduction objective in the Clear Skies Act that is
set at the level achieved as a cobenefit from sulfur dioxide and
nitrogen oxides controls, without establishing a ``hard-cap'' reduction
requirement. Phase II mercury reductions should be based on the
progress in developing affordable mercury emission control technology
and on a public, peer-reviewed investigation and determination into
whether additional mercury regulation will produce net public health
benefits. Further, the Clear Skies act must recognize that the various
grades of coal (lignite, subbituminous and bituminous coals) contain
different levels and species of mercury. The legislation currently
recognizes these differences and any efforts to eliminate the mercury
allocation adjustment factors must be resisted. My company operates in
the Western United States, an area that contains these various grades
of coal. We want to ensure that we have the ability to select an
appropriate coal and have certainty that we can meet the emission
limits.
Being from the West, we are also aware of the Western Regional Air
Partnership (WRAP) SO<INF>2</INF> reduction plan that is included in
the proposed legislation. Unfortunately, several additional states have
been added to the WRAP plan in the proposed legislation, without a
corresponding adjustment in the SO<INF>2</INF> reduction milestones.
This problem needs to be corrected.
For the Record, Mr. Chairman, the NAM is greatly concerned about
the barrage of misinformation being put forth regarding the
contribution of U.S. coal-burning power plants to the levels of
methylmercury in fish, as well as the misinformation regarding the net
benefits to the American public of eating fish. The NAM urges the
committee to ensure that any final Clear Skies legislation direct the
HHS, in coordination with the EPA and other health organizations, to
review in an open and peer-reviewed process the most recent scientific
evidence regarding the sources of methylmercury in fish--including
natural sources, foreign sources and U.S. electricity generation
sources--to evaluate the net beneficial health benefits of eating fish
for Americans, including pregnant women. The NAM is on record with the
EPA to urge that the agency reanalyze its increasingly suspect
conclusions regarding an appropriate methylmercury reference dose,
which is many times lower than the reference dose determined to be
appropriate by the FDA and at least four other national and
international health organizations. Most importantly, the critical
question that must be asked is whether reducing elemental mercury
emissions from U.S. power plants will have any measurable impact on the
methylmercury levels in fish broadly consumed by the American public.
The business community has been a good steward of our environment,
investing hundreds of billions of dollars over the past three decades
to help our nation achieve its unprecedented and unparalleled clean air
progress. As a trip through Ohio would document, however, some
manufacturers have closed or moved elsewhere because the high costs of
environmental progress cannot always be absorbed in this era of intense
international competition. The NAM strongly supports the Clear Skies
Act as a way to avoid excessive energy costs while mandating dramatic
future reductions in SO<INF>2</INF>, NOx and mercury. We believe the
Clear Skies Act successfully employs market forces to achieve these
reductions; ensures the expanded use of coal, which provides reliable
and affordable energy to the nation; provides certainty for ratepayers
and business and utility planners; and, redirects precious resources
from fighting the regulatory and legal battles of the current confused
and duplicative system to investments that ensure real air pollution
reductions.
Mr. Chairman, the NAM and the workers and the prosperity that we
represent, urge your attention to these concerns. Thank you, I would
appreciate an opportunity to respond to any questions that the
committee may have.
______
Responses by Fred Parady to Follow-Up Questions from Senator Jeffords
Question 1. You suggested that ``the maze of current clean air
requirements and the litigation that inevitably results add uncertainty
and delay.'' How many legal actions has the National Association of
Manufacturers initiated or joined with respect to Clean Air Act
standards, regulations or guidance, issued by the U.S. Environmental
Protection Agency or by a state using delegated authority, since 1991?
Please describe the basic thrust of each action, including the subject
standard or regulation, and the date of filing.
Response. Since 1991, the NAM has been involved in the following
legal actions pursuant to the Clean Air Act:
Engine Mfrs. Assn. v. South Coast Air Quality Mgt. Dist. (S. Ct.,
No. 02-1343)--Whether the Clean Air Act pre-empts state motor vehicle
emission requirements restricting new fleet vehicles to natural gas
engines only. We urged the Supreme Court to rule that local fleet
regulations are pre-empted. We argued that the fleet rules were not
submitted to or approved by EPA as required by law, and they conflict
with the technology and fuel-neutral emissions regulation developed by
the EPA under the Clean Air Act. The Supreme Court ruled that the fleet
rules were pre-empted. Joint brief with Alliance of American Auto.
Mfrs., American Petroleum Inst., Assn. of Internat'l Auto. Mfrs.,
Calif. Motor Car Dealers Assn., Nat'l Auto. Dealers Assn., Nat'l
Petrochemical and Refiners Assn. and Truck Mfrs. Assn. filed 8/29/03;
vacated and remanded 4/28/04.
U.S. v. Hoechst Celanese Corp. (Nos. 96-2003, 96-2051, 4th Cir.)--
This case involves an enforcement action against Hoechst Celanese for
alleged violations of the federal regulations pertaining to equipment
in facilities that produce or use benzene. The NAM filed a brief
supporting arguments concerning the government's refusal to comply with
Admin. Procedure Act and Clean Air Act provisions mandating that prior
notice be given of agency regulatory requirements, thus, attempting to
make a significant change in the meaning of a rule without first going
through notice and comment. Joint brief filed 11/4/96 with Chem. Mfrs.
Ass'n, Corp. Environmental Enforcement Council and Pharmaceutical
Research and Mfrs. of America. Affirmed 10/27/97.
Clean Air Implementation Project v. EPA (Docket No. 97-1117, DC
Cir.)--The NAM petitioned the district court to review the EPA's 2/24/
97 promulgation of credible evidence rule. Rule allows use of non-
reference test to prove or disprove Clean Air Act (CAA) violations. It
permits use of any valid evidence in CAA enforcement actions. The NAM
contends EPA does not have authority to issue the rule under the CAA,
nor can the EPA legally implement it via state implementation plans.
The EPA also failed to follow proper administrative procedures in
issuing the rule. Petition for review filed 4/18/97. Dismissed as
unripe 8/14/98.
Arizona Public Serv. Co. v. EPA (No. 98-1196 (DC Cir.)--Challenging
the EPA rule granting Indian tribes Clean Air Act authority. Affects
permitting for any industrial source located or seeking to locate
within tribal territories or trust lands. Could also affect discharges
from upstream sources. Tribal decisions are not subject to judicial
review. Industry is prohibited from commenting or objecting to tribal
applications for permitting authority. Filed 4/10/98 with AFPA, Mich.
Chem. Council, Timber Producers Assn. of Mich. & Wisc., Rhinelander
Area Chamber of Commerce. Court upheld the EPA rule granting Indian
tribes Clean Air Act authority. Brief filed 7/6/99; decided 5/5/00.
American Trucking Assns. v. EPA (Nos. 97-1440, 1441 and 1556 (D.C.
Cir.) (consolidated with API, NAM v. EPA, Nos. 1502 and 1555)--
Reviewing the final EPA rules on new air quality standards for ozone,
particulate matter, and Federal Reference Method for NAAQS. All
companies that emit ozone or that must comply with EPA's air quality
regulations; case sets first precedent for challenging federal
regulations under SBREFA. Twenty-six suits challenge the ozone and
other standards, thirty-three challenge the PM standard, six involve
the federal reference method. Petitioners include mining, autos, power
companies, chemicals, paint, equipment manufacturers, oil, steel and
trucking. The Court rejected the rules implemented by the EPA
concerning ozone pollution. The ruling has stripped the EPA from
assuming arbitrary authority and requires the EPA to say why the ozone
pollution levels it has set are reasonable in terms of health effects.
Filed 8/14/97, 9/12/97; cases consolidated 10/1/97; main briefs on
ozone and SBREFA claim filed 3/98. Reversed and remanded 5/14/99.
Subsequently, the Supreme Court heard the appeal under the caption
Whitman v. American Trucking Assns., Inc. The Court upheld the EPA's
authority under the Clean Air Act. The EPA may not use cost factors
when issuing air regulations, and the CAA does not violate non-
delegation doctrine. Cross-petition and reply brief filed 2/28/00;
cert. granted 5/22/00; decided 2/27/01. Reply brief by the NAM and
others filed 10/26/01. The D.C. Cir. upheld the rules on 3/26/02.
New York v. EPA (Equipment Replacement Project) (D.C. Cir.)--
Supporting the EPA's final rule on replacement of pollution control
equipment under the Clean Air Act. The rule, issued 10/27/03, is being
challenged by numerous state attorneys general and several
environmental organizations. Joint motion to intervene filed 11/7/03 by
Equipment Replacement Rule Coalition, which includes the NAM; joint
briefing schedule proposed 11/24/03; opposition to motion for stay
filed 12/5/03.
Massachusetts v. EPA (D.C. Cir.)--Supporting the EPA's decision not
to regulate greenhouse gases (CO<INF>2</INF>, methane, nitrous oxide
and hydro-fluorocarbons). Various states and organizations have sued to
force the EPA to regulate GHGs as a pollutant. Joint motion to
intervene filed 11/24/03 by the CO<INF>2</INF> Litigation Group, which
includes the NAM.
United States v. Duke Energy Corp. (4th Cir.)--The NAM and other
business organizations filed a brief asking the U.S. Court of Appeals
for the Fourth Circuit to affirm a district court's ruling that routine
maintenance, repair and replacement, without change in emissions, do
not trigger the EPA's New Source Review (NSR) permit requirements. The
NAM argues that NSR is only statutorily triggered, according to the
Clean Air Act, when facilities are physically changed or modified to
create an increase in emissions over the level approved in the original
permit process. However, the EPA wants a broader reading of the act
that would require manufacturers to obtain permits prior to any
physical modifications, including any necessary repairs. Congressional
intent, plain meaning of the statutory definition of ``modification''
and common sense all support the NAM's position that repairs do not
constitute changes triggering a need for an NSR permit. This case is of
high importance to all manufacturers as American industry would grind
to a halt if it were required to scrutinize for potential NSR
applicability for thousands of activities each year. For instance, if
the activity is a necessary repair or replacement project, the result
could be an extended shutdown of the facility until it could be
undertaken. Reversing the district court's ruling would cause a
fundamental, drastic change in how industry operates. Joint amicus
brief filed 10/15/04.
American Lung Assn. v. EPA (D.C. Cir.) (consolidated with South
Coast Air Quality Mgt. Dist. v. EPA)--The NAM on 7/29/04 joined with
the American Chemistry Council, the American Forest & Paper Association
and the American Petroleum Institute to try to intervene in this case
to support the EPA's final rule to implement the 8-Hour Ozone Phase I
Implementation Rule. The Phase I rule addresses classification of areas
that are in nonattainment, attainment and emission-reduction states,
transition from the 1-hour to the 8-hour ozone standard, and the date
on which the 1-hour standard will be revoked. Motion to intervene
granted 8/19/04.
In Re Final Rule To Implement the 8-Hour Ozone National Ambient Air
Quality Standard--Phase 1 (EPA)--The National Petrochemical & Refiners
Association (NPRA) and the NAM submitted to the EPA 6/29/04 a Petition
for Reconsideration of the final rule to implement the 8-hour ozone
national ambient air quality standard (NAAQS) and the designations and
classifications for the ozone standard. Industry is concerned that the
timetable for certain facilities in nonattainment areas to come into
compliance is too short. At least 15 regions of the country will need
more time to come into compliance than is provided by the EPA.
New York v. EPA (D.C. Cir.) (Equipment Replacement Rule case)--The
NAM is a member of the Equipment Replacement Rule Coalition, which
filed a motion 11/12/03 to intervene in a suit brought by the State of
New York against the EPA over the agency's 10/27/03 final rule titled
``Prevention of Significant Deterioration (PSD) and Non-Attainment New
Source Review (NSR): Equipment Replacement Provision of the Routine
Maintenance, Repair and Replacement Exclusion.'' This rule governs the
factors that determine whether companies must obtain EPA permits before
replacing broken or deteriorating equipment at their industrial
facilities. New York is challenging the rule as too lenient. The
Equipment Replacement Rule Coalition, comprising various trade
associations, manufacturers and utilities, generally support the EPA's
new rule.
New York v. EPA (D.C. Cir.) (New Source Review regulations)--The
NAM is one member of a coalition of associations known as the NSR
Manufacturers Roundtable, which filed a motion 1/15/03 to intervene in
a suit brought by NY, CT, ME, MD, MA, NH, NJ, RI and VT against the
EPA's final regulation governing the procedures for companies to
install stringent emission controls at their facilities under the
Prevention of Significant Deterioration (PSD) and nonattainment New
Source Review (NSR) provisions of the Clean Air Act. These states have
challenged the legality of EPA's rule, and the NSR Manufacturers
Roundtable intervened to insure that the court considers the views of
manufacturers and the effects of the rule on industry. On 4/7/03, we
filed a statement of issues, including (1) whether the EPA's preamble
statements regarding an ``actual-to-potential'' methodology to
determine whether a change at an existing emissions unit results in an
``increase in actual emissions'' conflict with the language of the
regulations, other interpretations and case law, (2) whether similar
preamble statements constitute an unlawful attempt to revise the
regulations without notice and comment, (3) whether EPA's failure to
provide that the first step in assessing if the rule applies is a
determination of whether there is an increase in the maximum emissions
rate of the unit involved is contrary to the Clean Air Act, and (4)
whether the final rule is unlawful in that it provides that emission
reductions achieved by a source that relies on the pollution control
project exclusion cannot be used as netting credits or offsets.
On 7/25/03, the EPA agreed to reconsider its rule with respect to
six issues raised by parties seeking reconsideration. On 9/30/03, the
D.C. Circuit ordered that the court appeal be held in abeyance pending
completion of EPA's reconsideration process.
The NSR Manufacturers Roundtable filed a joint opening brief with
the Clean Air Implementation Project, the American Chemistry Council,
the Utility Air Regulatory Group, Alabama Power Co., and the National
Environmental Development Association's Clean Air Regulatory Project,
on 5/11/04. The EPA's 2002 rule changes the definition of plant
modifications to include virtually all changes as covered by the Clean
Air Act. The first brief of the NAM and other industry petitioners
challenges only this EPA action. We argue that the statutory language
itself, as well as the history of its enforcement, make clear that the
first step of the analysis of whether there is a change to an existing
emissions unit at a stationary source is the requirement that the
emitting capacity of the existing unit must be increased (i.e., that
``new pollution'' be created) by the change.
Question 2. You referenced a recent NAM study on ``external
overhead costs including regulation . . .'' What is NAM's estimate of
the cost of environmental-only regulations as it relates to
manufacturers' labor costs?
Response. In December 2003, the NAM released a study entitled ``How
Structural Costs Imposed on U.S. Manufacturers Harm Workers and
Threaten Competitiveness.'' Although the study does not specifically
assign a dollar amount to labor costs as they relate to pollution
abatement rules, it does cite statistics generated by the Organization
for Economic Cooperation and Development (OECD) that show that the U.S.
spent 1.6 percent of its GDP on pollution reduction compliance schemes,
surpassed only by South Korea, at 1.7 percent of GDP, among the nine
other major U.S. trading partners listed on the table. Other countries
cited in the study include Japan (1.4 percent), Germany (1.5 percent),
Great Britain (1 percent), Canada (1.1 percent), Mexico (0.8 percent),
and France (1.4 percent).
The study further states that environmental compliance is the only
regulatory area for which reliable comparative data from other
countries is available. According to NAM economists, the compliance
costs of environmental regulations, or pollution abatement rules,
``reduces U.S. cost competitiveness by at least 3.5 percent points.'' A
cursory geographical analysis demonstrates the relative ease with which
manufacturers may be lured to nearby countries where pollution
abatement is significantly less costly than in the U.S.: Canada (1.1
percent); and Mexico (0.8 percent).
Question 3. You indicated that in a highly competitive
international marketplace any legislation that would have a major
impact on electricity costs could disadvantage NAM member companies. On
average, or by major sector, what portion of NAM member companies'
annual operating costs is electricity and how does that compare with
the electricity costs in the countries of NAM competitors?
Response. The NAM does not keep energy data on its membership, but
instead we rely on data published by the Energy Information
Administration. The EIA data indicate that electricity is the
manufacturing sector's largest energy input and that industry (a
category that also includes construction and agriculture) uses about 30
percent of the nation's electricity. In 2003, industry spent almost $52
billion on retail electricity, and it looks like 2004 will be almost
the same. Some manufacturing sectors use electricity only for lighting
and electric motors, while other sectors use electricity for process
energy. The largest electricity users would be the aluminum sector,
which has lost more than 30 percent of their primary aluminum
production capacity since 2000 due primarily to high electricity costs
and tight supplies of electricity in the Northwest. The U.S.
manufacturers' historic advantage in low electricity costs compared to
the EU has already almost disappeared--with these reforms to current
law, electricity could be added to natural gas as structural energy
cost disadvantages for manufacturing in the United States. EIA's most
recent international electricity cost data is for 2001, or in a few
cases 2002, before the high natural gas prices and revitalized economy
began influencing domestic electricity rates.
Question 4. Should we amend the Clean Air Act to delay the existing
attainment deadlines therein? If so, why?
Response. Congress should amend the Clean Air Act to establish
uniformity and certainty to a piece of legislation that has
deteriorated to a morass of contradictory and overlapping regulatory
requirements. Since Congress adopted the CAA in 1970, and amended the
law in 1990, the EPA has issued numerous regulations which different
parties have litigated in the federal court system on different
grounds. The Agency has reacted to this litigation onslaught, over the
course of three different Administrations, by interpreting and drafting
rules to comply with the numerous court decisions being handed down by
federal judges from across the country. Passage of the Clear Skies Act
of 2005 will pre-empt ambiguous and contradictory regulatory standards,
and reduce the number of lawsuits filed pursuant to the CAA.
Question 5. Would you support a binding global treaty that required
all nations to reduce their mercury use and emissions?
Response. The NAM does not support ratification of any global
treaty that would bind the U.S. to reduce mercury emissions. The most
recent debate surrounding international emissions abatement targets has
centered on the Kyoto Protocol, which the U.S. Senate overwhelmingly
rejected by a vote of 95 to zero in July 1997. International
environmental treaties that specifically target air emissions often do
not require participation by underdeveloped countries, which does
nothing to reduce the global inventory of a given, targeted pollutant.
Also, the soundness of the science on which policy decisions are made
must be clearly established before national governments, and
international non-governmental organizations (NGOs), impose regulatory
mandates that may ultimately stifle job creation and technological
advancement without accomplishing clear environmental objectives. The
NAM has formally requested the EPA to participate in an interagency
panel to thoroughly review the most recent science regarding elemental
mercury, methylmercury and the net health benefits of eating fish. (See
NAM comments to the mercury NODA filed with the EPA on January 3,
2005).
Question 6. Mr. Parady, your company's parent company Oriental
Chemical Industries of the Republic of Korea operates in a country that
is a party to the Kyoto Protocol. Though they are not an Annex One
company with specific reduction requirements, Korea is actively
participating in a binding global process to reduce greenhouse gas
emissions. Do you think the United States should be part of such a
global process?
Response. The NAM is strongly opposed to multilateral mandatory
carbon quotas such as the Kyoto Protocol or unilateral carbon quotas
such as the Climate Stewardship Act being pursued by Senators McCain
and Lieberman. I understand that the United States is already heavily
involved in bilateral discussions with a number of nations to increase
the quality of the climate data and the efficiency of fossil fuel
combustion. I am not aware that Korea has agreed to any binding
reductions of its own greenhouse gas emissions.
Question 7. How many NAM member companies would or could opt-in to
the relief of current hazardous air pollutant requirements provided by
S. 131?
Response. The NAM membership includes a number of electric
generators (utilities) as well as many companies that operate large
combined heat and power units. The EIA data indicate that in 2004,
industrial combined heat and power units produced a total of 128
billion kilowatts out of the U.S. net electricity generation total of
3,314 billion kilowatts. I do not know how much of this CHP produced
electricity is from power plants large enough to meet the threshold in
the bill, or how many facilities would be able to make the investments
to meet the pollution reduction thresholds provided in the bill.
Statement of the American Farm Bureau Federation
On behalf of hundreds of thousands of farming and ranching members,
the American Farm Bureau Federation respectfully submits this testimony
to the Subcommittee as it considers Clear Skies legislation.
The American Farm Bureau Federation supports the Clear Skies
initiative as a viable, proactive plan for much-needed reform of the
Clean Air Act. Most significantly, our support for Clear Skies is based
on farmers' and ranchers' growing concerns about the increasing demands
on natural gas, as well as our opposition to any attempt to regulate
carbon as a pollutant.
Natural gas is considered by many to be the most important energy
source for production agriculture and for the manufacturers who supply
us with products and inputs that keep our farms and ranches running. It
is relied on to produce inputs including nitrogen fertilizers, farm
chemicals and, in many areas, electricity for lighting, heating,
irrigation, and grain drying. Based on USDA statistics, Farm Bureau
estimates that increased energy costs reflected in the price of inputs
during the 2003 and 2004 growing seasons added over $6 billion to the
cost of production for food and fiber in the United States. Plainly
put, the increasing price of natural gas is the single most significant
factor adding to energy costs for American farmers and ranchers.
Over the last three years, the United States has experienced
prolonged natural gas price volatility which has led to a significant
overall price increase. The current natural gas situation is a product
of under-supply and over-demand. Existing burdensome, out-of-date air
quality regulations exert constant pressure on natural gas supplies by
artificially driving up demand and encouraging ``fuel switching'' from
other energy sources by manufacturers and power suppliers.
The challenges facing the fertilizer industry perfectly demonstrate
how critical a stable, affordable natural gas supply is to domestic
food and fiber production. Natural gas is the primary feedstock used to
produce virtually all commercial nitrogen fertilizers in the United
States. For example, the price of natural gas accounts for 90 percent
of a farmer's total cost of anhydrous ammonia fertilizer. According to
The Fertilizer Institute, this nitrogen-based fertilizer cost producers
about $100 per ton during the 2000 planting season. By the 2003 and
2004 growing seasons, however, farmers faced anhydrous ammonia prices
of $350 or more per ton--over a three-fold increase.
Equally alarming is the fact that over the last four years the
United States has permanently lost at least 25 percent of our domestic
production capacity of fertilizers. An additional 20 percent of
production is temporarily shut down due to high natural gas prices.
Currently, U.S. sources are domestically supplying just over half of
the fertilizer once produced for American agriculture.
The unavoidable fact facing U.S. farmers and ranchers is that price
volatility of natural gas threatens the very existence of what remains
of our domestic fertilizer industry. Loosing that domestic production
would cause America to be dependant yet again on foreign sources for a
vital economic need--in this case, fertilizers.
Additionally, Farm Bureau supports Clear Skies as much for what it
does not do as for what it does do. In contrast to other reform
proposals, the Clean Air Act initiatives will drastically improve air
quality without the need to federally regulate carbon as a pollutant.
According to EPA estimates, Clear Skies will help reduce air
pollution faster, cheaper and sooner than the current regulatory
structure. Clear Skies will reduce emissions of sulfur dioxide,
nitrogen oxides and mercury by as much as 70 percent without choking
our economy with another layer of regulation for carbon, or
exacerbating the demand on natural gas.
In conclusion, we believe that the Clear Skies initiative
complements our support for a comprehensive energy policy and will help
achieve the objectives of our grassroots members. American Farm Bureau
clearly supports updating and reforming current federal air quality
laws to allow for the following:
Use of new, cleaner energy production technologies;
Stabilizing the demand for natural gas;
Reducing dependence on foreign energy sources;
And, improving air quality without sacrificing economic
productivity.
American Farm Bureau Federation appreciates the opportunity to
provide the Subcommittee with input and for your consideration of our
position.
______
Statement of the American Public Power Association
We appreciate the opportunity to submit this statement for the
record related to the Committee's hearing on the Clear Skies Act, S.
131. The American Public Power Association (APPA)\1\ supports sensible
multi-emission control legislation, as represented by the Clear Skies
Act, S. 131. The passage of S. 131 will achieve a 70 percent reduction
in three power plant emissions, improve air quality more quickly than
current law, and provide regulatory and environmental certainty while
promoting the use of more cost-effective, pollution control strategies.
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\1\ APPA is the national service organization representing the
interests of the more than 2,000 state, municipal and other local
government-owned electric utilities in the United States. Publicly
owned electric utilities are among the most diverse of the three
electric utility sectors, representing utilities in small, medium and
large communities in 49 states, all but Hawaii. Seventy-five percent of
public power utilities are located in cities with populations of 10,000
or less. Overall, public power utilities provide approximately 16.6
percent of all kilowatt-hour sales to ultimate consumers in the United
States.
---------------------------------------------------------------------------
The emissions reductions proposed in S. 131 are significant and
will come with a cost to electric utility generators and the consumers
they serve. However, APPA recognizes the importance of protecting and
improving air quality and believes that the Clear Skies Act provides a
reasonable means to achieving this important goal.
While the Clean Air Act has resulted in notable improvements in air
quality, additional improvements are needed to achieve further air
quality objectives in a more timely and cost-effective manner. There is
widespread agreement that the existing Act is complex, duplicative and
uncertain--in particular as it relates to controlling emissions from
the electric utility sector. For that reason APPA supports an
integrated multi-pollutant approach that employs market-based trading
mechanisms to achieve reductions of nitrogen oxides (NOx), sulfur
dioxide (SO<INF>2</INF>) and mercury (Hg). Such an approach is embodied
in S. 131.
S. 131 would build upon the successful aspects of the current acid
rain program, and in doing so, would result in the reduction of
SO<INF>2</INF> emissions by 73 percent (from 11.2 to 3 million tons),
NOx emissions by 67 percent (from 5.1 to 1.7 million tons) and mercury
emissions by 69 percent (from 48 to 15 tons) from 2000 levels. If
designed and implemented correctly, the regulatory certainty, utility
flexibility, and appropriate reforms afforded by such an approach will
yield equal or superior environmental protection in a cost-effective
manner.
When the Clear Skies Initiative and subsequently proposed Clear
Skies Act (H.R. 5266 and S. 2815) were introduced in 2002, APPA
presented a package of technical comments and recommendations to
congressional and Administration staff. Our recommendations included
three ``core'' issues: (1) the level of the phase I mercury cap; (2)
the phased-in auction; and (3) the allowances penalty that would be
imposed in the event that the U.S. Environmental Protection Agency
(EPA) failed to implement the program. Many of our comments and
recommendations were accepted and incorporated in the subsequent
version introduced in early 2003 (S. 485 and H.R. 999). We appreciate
that those issues that were first addressed to our satisfaction in 2003
and were maintained in the current version, S. 131.
The proposed Clear Skies Act also comes at a time that will benefit
states and localities facing CAA criteria pollutant attainment
problems. Affected communities and states have been looking for
effective ways to achieve emissions reductions to meet the newest and
more stringent CAA ambient air quality standards for ground level ozone
and for fine particles. Currently, more than 300 counties fail to meet
one or more of these ambient standards. Clear Skies also addresses
declining visibility and regional haze improvement in many of our
nation's national parks and wilderness areas. Clear Skies, through a
combination of certainty and flexibility, will help enable these
affected communities, states, and regions achieve significant
improvements in air quality and meet national air quality goals. In
contrast, the current CAA regime of complex and overlapping
regulations, which often is characterized by conflict, litigation, and
delay, will not provide the level of reductions necessary to reduce
emissions in affected regions, nor the certainty that is needed.
Regulatory certainty is needed in our sector in order to continue to
provide the low-cost electricity that has underpinned our nation's
economic development and allowed us to address crucial environmental
issues.
An area of growing concern for the electricity sector in general
and the public power community specifically, is how Clear Skies may
impact the planning and construction of new electricity generating
facilities, including new coal-fired power plants to meet increasing
energy demands. An important feature of S. 131 is its requirement to
set permanent caps on emissions from the power generation sector. The
cap and trade system will give power suppliers a defined regulatory
platform upon which to make critical decisions including: siting, fuel
choice, and generation technology decisions. S. 131 will help power
suppliers site and construct new generation in locations where they can
deliver the best value to local consumers while protecting and
improving air quality.
The bill's benefits to the environment are very significant and
enduring. S. 131 provides absolute environmental certainty because once
enacted into law, the emissions reductions are statutorily mandated.
Emissions caps guaranteeing that power plants will not exceed the total
allotted levels for each air pollutant will be solidified in law. These
caps and compliance deadlines, also described in statute, cannot be
disputed or legally challenged in court as they are under the current
maze of regulations.
As S. 131 proceeds through committee mark-up, floor consideration
and final conference review, it is important that other considerations
be recognized and addressed. We would greatly appreciate Members'
attention to the following issues:
planning for new electricity generating units, including coal-fired
units
As previously stated, there are many public power systems serving
towns and cities with growing populations and local economies, and as a
result, increasing energy demands. These utilities and communities will
need to plan and build new energy resources, including the construction
of new coal-fired units, to meet this growing demand. These new coal
units will be cleaner and more efficient than older units. It is
imperative that the allocation methodologies that determine and allot
allowances for existing and new units be done on a fair basis. We will
be reviewing the new source set-aside sections to determine if the
approach is done on a basis that is fair and not detrimental to our
members planning new, clean units. We also believe that the expected
improvement in visibility impacts in Class I areas due to the
significant reductions in SO<INF>2</INF> and NOx with S. 131 should be
reflected in siting requirements for new clean coal units.
small unit considerations
In developing Clean Air Act reform legislation, it is important
that Congress continue to recognize the role played by small (25MW or
less) generating units in public power communities. Because they are
usually located inside the utility's distribution service territory,
these small units often provide relief from transmission congestion and
increase local system reliability. Appropriately, multi-pollutant
control legislation should continue to exempt such small units from
most of the Clear Skies emission reduction programs.
With respect to controlling mercury, we ask that Congress take into
consideration that many units operated by municipally owned electric
utilities are small, including many that are no larger than 50MW. There
are many municipal utilities where there is only one boiler of 50MW
size at the utility with no ability to ``bubble'' as larger facilities
with multiple units do in order to reduce regulatory costs. This is
unique to public power. The capital costs associated with installation
of controls on these smaller units are disproportionately high. Often,
mercury removal efficiencies are unrelated to plant size. Smaller
emitting plants will remove far fewer pounds of mercury through the use
of control technology from larger plants. APPA wrote extensive comments
regarding these concerns in response to EPA's Proposed National
Emission Standards for Hazardous Air Pollutants. In these comments we
described the unique difficulties municipal utilities with small
generating units face with respect to control technology retrofits.
Among these issues, we described how many municipally-owned generation
facilities are located in the heart of small towns. These plants often
have substantial space constraints that inhibit significant new
construction projects and may make new control technology installations
infeasible. We also stated that for such small units, the technology to
control mercury is not currently available. In fact, it is very unclear
at this point when control technologies will ever be developed that
will enable small units (<100MW) to make appropriate mercury emission
reductions. We encourage your consideration of possible alternative
compliance options for small (100MW or less) units. (Comments are found
on APPA's website:
http://appanet.org/pressroom/
index.cfm?ItemNumber=10561&sn.ItemNumber=12041#QL3)
mercury monitoring
While S. 131 has improved in the area of mercury monitoring, we
urge the Committee to acknowledge that smaller emitters need to have
other options other than Continuous Emissions Monitoring (CEMS) for
monitoring mercury. Our experience shows that CEMS work sensibly for
SO<INF>2</INF> and NOx, but not yet for mercury. Our concern is
primarily focused on the lack of availability for CEMS systems and the
cost (capitol expenditures and annual operating expenses) of such
systems. Installing a CEMS system on a 25-100MW unit would cost
approximately the same as on a 500-1000MW unit. For some municipal
utilities, the cost of monitoring mercury might exceed the cost of
controlling it. The initial installation costs, along with the
extensive operating and maintenance expenses, become an overwhelming
and impossible burden on the 25-100MW facilities. We urge Members to
clarify that smaller units (25-100MW) should be allowed by the EPA in
rulemaking to take advantage of alternative monitoring options to
determine mercury emission.
Related to this small unit/system concern is a provision in the
bill that would exclude a category of coal-fired units from S. 131's
mercury cap-and-trade program because of financial burdens overwhelming
a unit's ability to participate. APPA supports a de minimis exclusion
because, as we discussed above, most of these very low emitting units
are too small to allow economical retrofitting of more emissions
controls. Often these utilities physically do not have the space at the
utility for a second coal pile or to accommodate retrofitting. At the
very least, we urge the Committee to consider the option of using
creative alternative mercury reduction strategies for this unique
category of low emitting facilities
conclusion
APPA supports the Clear Skies proposal largely because it provides
regulatory certainty, flexibility and reforms while ensuring
improvements in air quality through statutorily dictated emissions
limits. We also strongly believe that the Clear Skies Act, without the
auction provision and with some additional consideration of the mercury
Phase I cap, will achieve significant emission reductions in a cost-
effective manner, while assuring that the nation's electricity supply
is reliable, secure, well balanced and reasonably priced. For these
reasons, APPA supports passage of multi-pollutant control legislation
based on the Clear Skies Act framework and we urge Congress to make
passage of the bill a high priority.
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