[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
FEDERAL REGULATION OF WATERS: IMPACTS OF ADMINISTRATION OVERREACH ON
LOCAL ECONOMIES AND JOB CREATION
=======================================================================
(113-66)
FIELD HEARING
BEFORE THE
COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
__________
APRIL 28, 2014 (Altoona, Pennsylvania)
__________
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committee.action?chamber=house&committee=transportation
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COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
BILL SHUSTER, Pennsylvania, Chairman
DON YOUNG, Alaska NICK J. RAHALL, II, West Virginia
THOMAS E. PETRI, Wisconsin PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina ELEANOR HOLMES NORTON, District of
JOHN J. DUNCAN, Jr., Tennessee, Columbia
Vice Chair JERROLD NADLER, New York
JOHN L. MICA, Florida CORRINE BROWN, Florida
FRANK A. LoBIONDO, New Jersey EDDIE BERNICE JOHNSON, Texas
GARY G. MILLER, California ELIJAH E. CUMMINGS, Maryland
SAM GRAVES, Missouri RICK LARSEN, Washington
SHELLEY MOORE CAPITO, West Virginia MICHAEL E. CAPUANO, Massachusetts
CANDICE S. MILLER, Michigan TIMOTHY H. BISHOP, New York
DUNCAN HUNTER, California MICHAEL H. MICHAUD, Maine
ERIC A. ``RICK'' CRAWFORD, Arkansas GRACE F. NAPOLITANO, California
LOU BARLETTA, Pennsylvania DANIEL LIPINSKI, Illinois
BLAKE FARENTHOLD, Texas TIMOTHY J. WALZ, Minnesota
LARRY BUCSHON, Indiana STEVE COHEN, Tennessee
BOB GIBBS, Ohio ALBIO SIRES, New Jersey
PATRICK MEEHAN, Pennsylvania DONNA F. EDWARDS, Maryland
RICHARD L. HANNA, New York JOHN GARAMENDI, California
DANIEL WEBSTER, Florida ANDREE CARSON, Indiana
STEVE SOUTHERLAND, II, Florida JANICE HAHN, California
JEFF DENHAM, California RICHARD M. NOLAN, Minnesota
REID J. RIBBLE, Wisconsin ANN KIRKPATRICK, Arizona
THOMAS MASSIE, Kentucky DINA TITUS, Nevada
STEVE DAINES, Montana SEAN PATRICK MALONEY, New York
TOM RICE, South Carolina ELIZABETH H. ESTY, Connecticut
MARKWAYNE MULLIN, Oklahoma LOIS FRANKEL, Florida
ROGER WILLIAMS, Texas CHERI BUSTOS, Illinois
MARK MEADOWS, North Carolina
SCOTT PERRY, Pennsylvania
RODNEY DAVIS, Illinois
MARK SANFORD, South Carolina
DAVID W. JOLLY, Florida
CONTENTS
Page
Summary of Subject Matter........................................ iv
TESTIMONY
Kenneth Murin, environmental program manager, Division of
Wetlands, Encroachment and Training, Bureau of Waterways,
Engineering and Wetlands, Pennsylvania Department of
Environmental Protection....................................... 6
David Spigelmyer, president, Marcellus Shale Coalition........... 6
Tonya Winkler, AICP, midstream permitting and compliance manager,
Rice Energy, Inc............................................... 6
Warren Peter, founder and president, Warren Peter Construction,
on behalf of the Indiana-Armstrong Builders Association,
Pennsylvania Builders Association, and National Association of
Home Builders.................................................. 6
Thomas R. Nagle, Jr., president, Cambria County Farm Bureau, on
behalf of the Pennsylvania Farm Bureau......................... 6
Jacqueline Fidler, manager, environmental resources, CONSOL
Energy, Inc.................................................... 6
PREPARED STATEMENTS SUBMITTED BY WITNESSES
Kenneth Murin.................................................... 34
David Spigelmyer................................................. 39
Tonya Winkler.................................................... 46
Warren Peter..................................................... 51
Thomas R. Nagle, Jr.............................................. 60
Jacqueline Fidler................................................ 65
SUBMISSION FOR THE RECORD
Steve Brown, president, National Association of Realtors, letter
to Hon. Bill Shuster, a Representative in Congress from the
State of Pennsylvania, April 25, 2014.......................... 4
[GRAPHIC] [TIFF OMITTED]
FEDERAL REGULATION OF WATERS: IMPACTS OF ADMINISTRATION OVERREACH ON
LOCAL ECONOMIES AND JOB CREATION
----------
MONDAY, APRIL 28, 2014
House of Representatives,
Committee on Transportation and Infrastructure,
Washington, DC.
The committee met, pursuant to call, at 9 a.m., at the
Blair County Convention Center, One Convention Center Drive,
Altoona, PA 16602, Hon. Bill Shuster (Chairman of the
committee) presiding.
Mr. Shuster. The committee will come to order. I first want
to take the opportunity to thank everybody for coming out here
today. I am pleased to welcome our panel of distinguished
witnesses today. First of all, Ken Murin, environmental program
manager for the Division of Wetlands, Encroachment and Training
of the Bureau of Waterways, Engineering and Wetlands from the
Pennsylvania Department of Environmental Protection. That is a
long title, Mr. Murin. Thank you for being here. Mr. David
Spigelmyer, the president of the Marcellus Shale Coalition;
Tonya Winkler, AICP, midstream permitting and compliance
manager for Rice Energy. Thank you for coming today. Warren
Peter, the president of Warren Peter Construction. Thomas
Nagle, president of the Cambria County Farm Bureau and a local
cattle farmer, and Jacqueline Fidler, manager of environmental
resources for CONSOL Energy. Thank you all for being here
today. Today we are going to explore the impact and executive
actions that the administration is taking to regulate the
waters and restrict the development of important energy
resources in Pennsylvania and elsewhere in the country.
Last week the President published a proposed rule that
would dramatically extend the reach of the Federal Government
when it comes to regulating ponds, ditches, and other wet
areas. This is an example of the disturbing pattern of the
imperial Presidency that seeks to circumvent Congress.
Unilaterally broadening the scope of the Clean Water Act and
the Federal Government's reach into our everyday lives will
have adverse effects on the economy and jobs, increase the
likelihood of costly litigation, and restrict the rights that
landowners and local governments enjoy regarding decisionmaking
on their own land.
This Federal jurisdiction--was the subject of failed
legislation in the 110th and 111th Congress, and I would like
to point out that both those Congresses were controlled by the
Democrats in the House and Senate at the time. Strong
bipartisan opposition prevented those Bills from moving
forward. Even in Congress now the Obama administration is
trying to achieve the power of expansion through a rulemaking.
This proposed rule supposedly aims to clarify which water
bodies are subject to Federal jurisdiction under the Clean
Water Act. Twice the Supreme Court has told the agencies that
there are limits to the Federal jurisdiction under the Clean
Water Act and they have gone too far in asserting authority. So
twice the Congress told the Democrats and twice the Supreme
Court had said to the administration, the EPA, you don't have
this jurisdiction.
It is a responsibility of Congress, not the administration,
to define the scope of jurisdiction under the Clean Water Act.
Similarly, the administration is taking steps to restrict the
development of important energy resources in Pennsylvania. The
administration is utilizing the Wetlands permitting process
under the Clean Water Act to throw obstacles in the way of
developing and transporting to market the gathering lines of
natural gas produced in the Marcellus Shale region. Since 2011
when the Army Corps of Engineers issued Pennsylvania State a
pragmatic general permit forum, the inferred concerns from
industry and the DEP regarding several key changes have
increased the permitting review time for natural gas gathering
lines, delaying the delivery of gas from the well to the
marketplace and delaying royalty payments to property owners
and revenues to the State.
I have met with and worked with industry, DEP, and the
Corps over the last 3 years to attempt to address these
concerns. While I am told the timeline has improved somewhat,
the underlying changes that caused these problems in the first
place have not been addressed. Regulations to the Nation's
water must be done in a manner that responsibly protects the
environment without unnecessary and costly expense to the
Federal Government. We can continue to protect our waters
without unreasonable and burdensome regulations on our
businesses, farmers, and families.
I look forward to hearing from all our witnesses today,
about their experience and thoughts on both the issues, and
thoughts on improvements on the next general permit issues in
2015.
I now yield to Mr. Gibbs, who is the chairman of the
Subcommittee on Water Resources and Environment, for an opening
statement.
Mr. Gibbs. Thank you, Mr. Chairman, and I want to thank the
witnesses for being here. I look forward to the testimony
today.
I would also like to thank Chairman Shuster for holding
this very important and timely hearing--in Altoona. I
appreciate your leadership on these important issues.
On March 25 the EPA and the Army Corps of Engineers
released a proposal that according to the agencies would
clarify the scope of the Federal jurisdiction within the Clean
Water Act. In reviewing the proposal I have serious concerns
about implementations of water previously regulated by States
rather than the Federal Government. When the Clean Water Act
was first passed by Congress it was done so under the
constitutional authority of the--clause defining jurisdiction
as--waters. The proposal would effectively remove--resulting in
the erosion of State authority and granting Federal
jurisdiction to waters never intended for inclusion of the
Clean Water Act, including ditches, manmade ponds, flood
plains, and unseasonably wet areas.
However, the agencies have continued to claim that no
waters would be covered in the rulemaking--no new waters in the
rulemaking. When I questioned Army Corps and agriculture
officials in the hearings last month about this issue, I found
that rather than clarifying the issue, they made it muddier.
Additionally, we are here today to learn about the cost
regulations permitting pipeline projects that appear to exist
only in Pennsylvania.
I am particularly concerned about this new time-consuming
process that my own district in Ohio is located above a large
portion of--formation. Ohio can expect to see development of
natural gas lines--pipelines similar to here in Pennsylvania.
Once again, I would like to thank the chairman for holding
this important hearing and I look forward to hearing from the
witnesses.
Mr. Shuster. I thank the gentleman, and everybody--Mr.
Gibbs from Ohio, as he said there, I want to introduce the
other Members who made the trip here today. To my far left is
Congressman Scott Perry from York County--York County, Adams
and the center part--central Pennsylvania; Congressman Jeff
Denham from California--the Central Valley in California; and
Congressman Tom Rice from South Carolina, Myrtle Beach, the
third most popular vacation spot in America.
Mr. Rice. You mean you didn't come here for business?
Mr. Shuster. I told him he needed to show some love to
Pennsylvania because quite a few of our folks travel to Myrtle
Beach for vacation.
Mr. Rice. It----
Mr. Shuster. And--Pennsylvania money, too. We appreciate
you making the trip up here----
Mr. Rice [continuing]. Come back early and all.
Mr. Shuster. I thank each of the Members for being here and
the staff for traveling up, and again, I appreciate the
witnesses making the trip here today. I ask unanimous consent
that the full statements be included in the record of all the
witnesses. Since we have written testimony we ask that you keep
your testimony to 5 minutes. I am pretty quick with the gavel,
but I won't be too quick today. It is important, so I want to
make sure you are heard, and any Members that don't get a
chance to ask questions, we will keep the record open for 5
days following this to pass on to you that opportunity.
I will ask unanimous consent that written testimony
submitted on behalf of the National Association of Realtors be
included in this hearing--on this record.
Without objection, so ordered.
[The information follows:]
[GRAPHIC] [TIFF OMITTED]
Mr. Shuster. And with that, I will start with Mr. Murin.
TESTIMONY OF KENNETH MURIN, ENVIRONMENTAL PROGRAM MANAGER,
DIVISION OF WETLANDS, ENCROACHMENT AND TRAINING, BUREAU OF
WATERWAYS, ENGINEERING AND WETLANDS, PENNSYLVANIA DEPARTMENT OF
ENVIRONMENTAL PROTECTION; DAVID SPIGELMYER, PRESIDENT,
MARCELLUS SHALE COALITION; TONYA WINKLER, AICP, MIDSTREAM
PERMITTING AND COMPLIANCE MANAGER, RICE ENERGY, INC.; WARREN
PETER, FOUNDER AND PRESIDENT, WARREN PETER CONSTRUCTION, ON
BEHALF OF THE INDIANA-ARMSTRONG BUILDERS ASSOCIATION,
PENNSYLVANIA BUILDERS ASSOCIATION, AND NATIONAL ASSOCIATION OF
HOME BUILDERS; THOMAS R. NAGLE, JR., PRESIDENT, CAMBRIA COUNTY
FARM BUREAU, ON BEHALF OF THE PENNSYLVANIA FARM BUREAU; AND
JACQUELINE FIDLER, MANAGER, ENVIRONMENTAL RESOURCES, CONSOL
ENERGY, INC.
Mr. Murin. Thank you, Chairman Shuster. Thanks again for
inviting the Department of Environmental Protection here this
morning to provide testimony before the Committee on
Transportation and Infrastructure on Pennsylvania's program for
issuing permits for projects under a consolidated permitting
process, and more specifically, for oil and gas pipeline
projects.
Before providing details on the process, I would like to
address another recent Federal matter that may be impacting
Pennsylvania permitting activities. Last week the Environmental
Protection Agency, EPA, and the United States Army Corps of
Engineers, or the Corps as I'll refer to, published a proposed
rule regarding the definition of waters of the United States.
This definition is to be used in determining the jurisdiction
of the Clean Water Act with respect to the requirements for
permits under section 404 as well as other Federal Clean Water
Act programs.
As the publication of the rule is recent and the rule is
lengthy, the Department has not yet completed its review of the
proposal. However, as Pennsylvania is home to over 86,000 miles
of streams and rivers, and 404,000 acres of fresh water
wetlands, DEP feels that this proposed rule may be particularly
relevant to Pennsylvania and fully anticipates providing formal
comments to EPA.
Prior to finalization of the waters in the United States
rule, DEP recommends the EPA and the Corps of Engineers reach
out to Pennsylvania to discuss the comments provided by the
Department. Once completed, DEP can provide these comments to
the committee members and make them available to the public as
well. Due to our ongoing review and our planned stakeholder
outreach I will not be providing testimony on that proposed
rule today.
The Commonwealth of Pennsylvania is a water-rich State and
the protection of these abundant water resources is vital to
the health and the vitality of the Pennsylvania citizens'
environment and economy. Pennsylvania has a vast energy
portfolio, ranking second in the Nation, in natural gas
production and fourth in the Nation in coal production.
Pennsylvania is the only producer in the Nation of high-heat
anthracite coal. The role of the Department of Environmental
Protection is to ensure environmentally responsible development
of the Commonwealth's vast energy resources, which includes
protection of the equally abundant fresh water resources.
In Pennsylvania, the Dam Safety Encroachments Act and the
accompanying regulations found at 25 PA Code, chapter 105,
require permits for stream and wetland encroachments
complimentary to those required under section 404 of the
Federal Clean Water Act. Under Federal regulations the Corps
has the flexibility to develop general permits on a statewide,
regional or national basis. The Department has worked with the
Corps to develop a joint permitting process that consolidates
the State and Federal permitting process making it more
efficient and less time-consuming without sacrificing
environmental protection.
In 1995 the Department and the Corps negotiated a statewide
general permit, State Programmatic General Permit, or SPGP-1,
for projects in Pennsylvania that impacted one acre or less of
waters of the United States, including wetlands. Projects with
greater impact cannot be authorized under this permit and were
required to obtain the individual section 404 permit directly
from the Corps. The Corps first issued its Pennsylvania State
Programmatic General Permit on March 1, 1995. This general
permit is renewed every 5 years, with the most recent renewal
or the fourth generation, also known as SPGP-4, having been
issued on July 1, 2011.
During the review process that led to the most recent
renewal of SPGP-4, the Corps' interpretation and application of
several terms, concepts and definitions used in the permit, as
they relate it to pipeline projects, were modified.
Specifically, these changes were intended to provide
clarification of the process of permitting pipeline projects.
Prior to the issuance of SPGP-4 in July 2011 the Department, in
cooperation with the Pennsylvania representatives to Congress,
attempted to negotiate some changes to the Corps'
clarifications; ultimately, however, the Corps did not make the
changes recommended by the Department and the Pennsylvania
congressional representatives. This is noteworthy as DEP will
begin the process of negotiating the next permit renewal with
the Corps next year, which is 2015, in order to have the SPGP-5
in place by July 1, 2016.
Under SPGP-4 the Corps defined three broad categories of
impacts. Category 1 and 2 activities normally do not trigger
any additional review by the Corps and authorize when a
department provides State law approval. Category 3 activities,
however, are reviewed by the Corps as well as the State, and
some examples of projects that require the Corps' review
include projects with impacts that threaten endangered species,
impact more than one acre of wetland, impact more than 250
linear feet of stream. Recent data provided by the Corps
indicates that approximately 13 percent of the projects
authorized from 2011 to 2013 require concurrent review by DEP
and the Corps. Of these projects, approximately 32 percent were
pipeline projects.
To provide a perspective in context on the joint permitting
program, between July 1, 2011, and June 30, 2013, DEP reviewed
approximately 9,500 authorizations under PA SPGP-4. It is
important to point out that this statewide general permit
covers more than just pipelines. It covers many activities
associated with land development in general, such as culverts,
small bridges, docks, temporary stream crossings and intake and
outfall structures.
During the period of July 1, 2006, through June 30, 2011,
over 90 percent of the Corps' authorizations were issued in
less than 60 days from the date of receipt of a complete
application. From there the review delays, they were typically
associated with deficient application submissions.
SPGP-4 has been a critical tool used in consolidating the
Federal section 404 and State chapter 105 permitting processes
in Pennsylvania, although it was tailored to allow for one-stop
authorization of the projects under both section 404 of the
Federal Clean Water Act and the State chapter 105 regulations.
PA SPGP-4 is a Corps permit and the Corps controls the extent
to which a Corps review is necessary.
Mr. Shuster. If you can just sum up----
Mr. Murin. OK. How much time do I have?
Mr. Shuster. About another 30 seconds.
Mr. Murin. OK. All right.
The consolidated State and Federal permitting processes
under SPGP have been effective, allows environmental
responsible development of the Commonwealth's vast energy
resources. As we look to the upcoming renewal of the State
Programmatic General Permit in 2016 the Department is
optimistic that working together with the Corps we will be able
to reevaluate the requirements of Nationwide Permit 12 and the
State Programmatic General Permit with regard to the use of
certain critical terms/definitions that bring in greater
consistency and efficiency into the implementation of these
important Clean Water Act requirements.
Thank you for your interest regarding this issue and
opportunity for the Department to provide this testimony.
Mr. Shuster. Thank you, and your testimony is--we have it
full in the record here and we are going to get into some
questions and we will talk to you about some of those issues.
Mr. Murin. OK. Thank you.
Mr. Shuster. And with that, Mr. Spigelmyer.
Mr. Spigelmyer. Good morning, Chairman Shuster,
distinguished members of the House Committee on Transportation
and Infrastructure. My name is Dave Spigelmyer. I am the
president of the Pittsburgh-based Marcellus Shale Coalition, a
trade association representing some 300-some producer pipeline
and supply chain members. Our members represent the largest and
most active companies producing, gathering and transporting
more than 95 percent of the natural gas now being produced here
in the region in the Commonwealth of Pennsylvania. You have a
copy of my formal testimony which I will summarize this morning
in my comments.
Increased development of natural gas here in the region has
made game-changing contributions to our economy, our energy
security, and due to the increased use of natural gas, EPA has
reported that we have significantly reduced carbon dioxide
emissions in the region, bettering our environment. We have
done so well reducing energy costs for nearly every citizen in
the United States. In 2008 prices of natural gas at the well
had hit $13.71 per Mcf, or thousand cubic feet. After a nearly
record-cold winter here in the Northeast this year our well had
prices and delivered utility prices are less than half of what
they were just 6 years ago. In 2008 our vertical drilling
conventional industry produced 25 percent of the natural gas we
consume here in the Commonwealth. Today, unconventional
horizontal development accounts for more than 14.3 billion
cubic feet of production per day, equaling 5.2 trillion cubic
feet annually or more than 20 percent of America's natural gas
demand being developed right here in our backyard.
These contributions are huge in terms of change in our
national energy picture, and putting men and women to work
right here in the Commonwealth of Pennsylvania. According to
the Department of Labor and Industry here in Pennsylvania more
than 241,000 people in Pennsylvania are now employed either
directly or indirectly by our industry. One great aspect of
this work is that we can employ men and women right here at
home trade in a hard hat in Pennsylvania--trade in a helmet and
military uniform abroad for a hard hat here in the
Commonwealth. And with nearly every consumer product, all
steel, glass, plastics, chemicals, fertilizers and powdered
metals that we touch today being manufactured through the use
of natural gas, we believe that abundant, affordable and
reliable supplies of natural gas are poised to open up huge new
manufacturing opportunities here in Pennsylvania and likely all
over this Nation.
However, a critical in--shale development, including the
Marcellus and Utica Plains, is the requirement to gather and
transport natural gas to consumers. Predictable and consistent
authorization in the permitting process for pipelines is
critical if the benefits of shale development are to continue
in our region. Today, hundreds of completed wells await a
pipeline connection to transport that gas to consumers here in
Pennsylvania and throughout the region. Wells that are unable
to be tied into a pipeline slows the delivery of that product
to market, and slows the royalty revenues that would flow to
mineral owners across the State.
The primary reason for the delay is that approving pipeline
projects rests in the review process now embraced by the
Baltimore District of the U.S. Army Corps of Engineers. Federal
jurisdiction applies to these projects in the location where
pipelines cross the waters of the United States, pursuant to
section 404 of the Clean Water Act. In Pennsylvania,
authorization of these projects typically has been provided
under the State Programmatic General Permit, issued pursuant
with the Clean Water Act, section 404(e).
The Pennsylvania State Programmatic General Permit #4 was
reissued effective July 1, 2011, by the Baltimore District of
the U.S. Army Corps of Engineers. As a result of this change by
the Baltimore District, the requirements for a review embodied
in the State Programmatic General Permit have created an
inefficient process that is now duplicative of the State's
review. Today, the process being followed by the Baltimore
District of the U.S. Army Corps requires nearly all pipeline
projects, both large and small, to undergo individual review by
the Corps, reviewing the total impacts of a project, and not
just the individual water crossing being authorized.
The approach for project authorization for these type of
projects reflected in the State Programmatic General Permit is
inconsistent with the goal--of the Corps' own goal,
inconsistent with its regulation, and represents a marked
departure from the longstanding approach of evaluating each
water crossing individually, which leads to substantial
permitting delays.
Combining the total impacts of an overall project for
preauthorization review of each individual water crossing is
also inconsistent with the Corps' definition of a single and
complete project, and is inconsistent with the rationale
expressed by the Corps when it adopted this review process. No
other district in the Army Corps where our members operate
approaches the permitting function for gathering lines and
midstream pipelines in the manner now in place in Pennsylvania.
In all other areas of the country where gathering lines are
being built, the Corps adheres to its regulatory definition of
single and complete, and evaluates each crossing of water
individually. The adherence by other Army Corps districts to
the regulatory definition of a single and complete project is
in accord with the Corps' own rules, and allows for efficient
and effective review of those projects. Furthermore, the review
by the Baltimore District of the Army Corps, under the State
Programmatic General Permit, does not alter the manner in which
these projects are designed or constructed.
Their review of these projects is unnecessary, it is
duplicative, and it does not provide meaningful environmental
benefit, yet the Army Corps process imposes substantial
administrative burden, adds additional costs, and significant
delays that could be eliminated. The delays being experienced
in Pennsylvania erode our competitive standing as a location to
invest capital, and can impact the job growth that has
revitalized communities all across this Commonwealth.
I appreciate the opportunity to appear before you today,
and thank you for allowing me to testify. I welcome your
questions.
Mr. Shuster. Thank you very much. And with that, Ms.
Winkler, you may proceed.
Ms. Winkler. Good morning, gentlemen. I am Tonya Winkler. I
am the midstream permitting and compliance manager for Rice
Energy, Inc. Rice Energy is engaged--it is not on. There we go.
I will borrow this one. Start over.
Good morning, gentlemen. I am Tonya Winkler, midstream
permitting and compliance manager for Rice Energy, Inc. Rice
Energy is engaged in exploration and production of natural gas
wells, and gathering and transportation of natural gas from our
wells to our sales points, as well as installation and
operation of water transfer lines for the use in production of
our natural gas wells in Pennsylvania and Ohio.
Rice Energy currently owns and operates approximately 40
miles of natural gas gathering lines, with a proposed 110 miles
to construct in the next year. Additionally, we currently
operate 33 miles of water transfer lines, with a proposed 73
miles to construct in the next year. An integral part of that
successful development of both the Marcellus and the Utica
Plains is the construction of that midstream infrastructure.
Consistent and timely authorization of these pipelines, as we
propose them, and other midstream projects is vital to ensure
that these constructions proceed as planned, on schedule, and
within our budgets.
Rice Energy currently has millions of cubic feet of natural
gas waiting to flow to market, estimated $56 million this year
alone in lost revenue, just due to orphaned wells. Uncertain
permitting review times and delays resulting in that lost
revenue not only for Rice Energy, but loss of royalties for our
landowners, loss of jobs, both for our midstream construction,
as well as our oil and gas--or our drilling operations, loss of
tax base for local, State, and Federal Government agencies as
well.
The delays that Rice Energy has experienced throughout the
review process is not just isolated issues. For example, our
midstream and completions team work together and collaborate
methods to utilize water transfer lines for various stages of
our operations, but the untimely authorization process has led
to stalled progress more often than not. The company now has 18
wells in inventory, with no pipeline installed to transport the
water necessary for production, or to produce this gas and get
it to market in Pennsylvania. These unanticipated delays in
completions have resulted in the loss of millions of dollars
over an operating year, in addition to the $56 million stated
above.
As recent--as a recent of--I apologize. As a result of
these unpredictable delays, Rice Energy has now started to
focus our operations elsewhere, where permit review times are a
little more predictable, such as in Ohio, that is--Nationwide
Permit 12 review process. As an example of what we--our
permitting reviews in Pennsylvania, we presently have 85
percent of our midstream projects that are under DEP review
also going under Corps review for the total impacts of the
overall project, rather than the limited impact of an
individual cross that is being authorized.
This does lead to regular, substantial delays in
authorization of our projects, and is hindering the ability of
Rice Energy to develop and construct our infrastructure
necessary to collect, gather, and transport this gas into
market. Using recent data, Rice Energy estimates it takes an
average of 80 days for projects that have only minimal and
temporary impacts to waters of the United States to receive
approval. Based upon our experience, it now takes at least 1\1/
2\ or more years to get even the most basic midstream
infrastructure pipeline project into sales.
Rice Energy is wholly committed to working with the local,
county, State, and Federal Government officials and regulators
to facilitate our safe, responsible installation of natural gas
gathering lines and water transfer lines, both in Pennsylvania,
and in Ohio. However, the delays and increased costs in
connecting these producing wells into market will continue, and
does influence Rice Energy's strategy for future development.
The loss of development relates not only to our wells already
completed and produced, but also for future wells yet to be
drilled.
I thank you for the opportunity that you gave me today to
speak to you, and I look forward to answering any of your
questions. Thank you.
Mr. Shuster. Thank you very much. Mr. Peter, proceed. It is
working.
Mr. Peter. Thank you, Chairman Shuster, and thank you,
members of the committee, for allowing me to testify here
today. Again, my name is Warren Peter. I am founder and
president of Warren Peter Construction. I am located in
Indiana, Pennsylvania. I am also here on behalf of the Builders
Associations, national and Pennsylvania, and our local
association.
Home builders have been advocates for Clean Water Act since
its inception. We have a responsibility to protect the
environment, and it is a responsibility I know well, for, under
the Clean Water Act, I must obtain permits for building
projects. When it comes to Federal regulatory requirements,
what I desire, as a small business owner, is a permitting
scheme that is consistent, timely, and focused on protecting
true aquatic resources.
Landowners have been frustrated with the continued
uncertainty over the scope of the Clean Water Act over the
waters of the United States. There is a need for additional
clarity, and the administration recently proposed a rule
intended to do just that. Unfortunately, the proposed rule
falls short. There is no certainty under this proposal, just an
expansion of the Federal authority. These changes will not even
improve water quality, as the rule improperly encompasses
waters that are already regulated at the State level.
The rule would establish broader definitions of existing
regulatory categories, such as tributaries, and regulates new
areas that are not currently federally regulated, such as
adjacent non-wetlands, riparian areas, flood plains, and other
waters. And these changes are far-reaching, affected all Clean
Water Act programs, but provide no additional protection, for
most of these areas already comfortably rest under State and
local authority.
I am also concerned that the terms are overly broad, giving
the agencies broad authority to interpret them. I need to know
the rules. I can't play a guessing game of ``is it
jurisdictional?'' We don't need a set of new, vague, and
convoluted definitions. Under the Clean Water Act, Congress
intended to create a partnership between the Federal agencies
and State governments to protect our Nation's water resources.
There is a point where Federal authority ends and State
authority begins, and the Supreme Court has twice affirmed that
the Clean Water Act places limits on Federal authority over
waters, and the States do regulate the waters under their
jurisdiction. In Pennsylvania, wetlands have been regulated
under State law since 1980. Since that time, Pennsylvania has
set an annual gain of wetland acreage. Pennsylvania takes its
responsibility to protect its natural resources seriously. I
also believe that Pennsylvania's story is not unique. If you
look around the country, you will find many other States are
protecting their natural resources more aggressively since the
passage of the Clean Water Act in 1972.
The proposed rule will have significant impacts on my
business. Construction projects rely on efficient, timely, and
consistent permitting procedures and review processes under
Clean Water Act programs. An onerous permitting process could
delay projects, which leads to greater risks and higher costs.
Also, more Federal permitting actions will trigger additional
statutory reviews by outside agencies under laws including the
Endangered Species Act, the National Historic Preservation Act,
and National Environmental Policy Act. It is doubtful the
agencies will be equipped to handle this inflow of additional
permitting requests.
I am uncertain of what environmental benefits are gained by
this paperwork, but I am certain of the massive delays in
permitting that will result. The cost of obtaining a Clean
Water Act permit ranges from $28,915 to $271,956. Permitting
delays will only increase these costs and prevent me from
expanding my business and hiring more employees.
The agencies have not considered the unintended
consequences of this rule. Under this proposed rule, low-impact
development stormwater controls could be federally
jurisdictional. Many builders voluntarily select LID controls,
such as rain gardens and swales, for the general benefit of
their communities. This rule would discourage these voluntary
projects if they required Federal permits.
This proposed rule does not add new protections for our
Nation's water resources. It just shifts the regulatory
authority from the State to the Federal Government. The
proposed rule is inconsistent with previous Supreme Court
Decisions and expands the scope of waters to be federally
regulated beyond what Congress envisioned. Any final rule
should be consistent with Supreme Court Decisions, provide
understandable definitions, and preserve the partnership
between all levels of government. All are sorely lacking here.
And, again, thank you for the opportunity to testify today.
I look forward to any questions.
Mr. Shuster. Thank you very much. And with that, Mr. Nagle,
proceed.
Mr. Nagle. Good morning, Chairman Shuster, and members of
the committee. I am a cattle and grain farmer in Cameron
County, Pennsylvania. Clean water is important to all of us,
but the hearing is not about the water quality. Rather, it is
about Federal agencies attempting to gain regulatory control
over the land use, and using the claim clean water.
Federal Clean Act--Water Act was signed into law before I
was even born, but some have been saying--trying to claim power
that the 1972 law never intended it to give. Farmers are
straightforward people who believe the words mean something.
Those of us in agriculture believe that the authors of the
Clean Water Act include the term navigable for a reason, and,
you know, as the Supreme Court case--have said that the Federal
Government can only regulate navigable waters.
However, recent proposals released by EPA and the Army
Corps gives conflicting messages. It also seems it is trying to
gain control over additional water bodies and lands that they
touch. Just because homeowners' lawns, or farm fields, or a
school playground collects water after rain does not mean that
they should be regulated under waters of the United States, but
from the--what I understand, the regulatory proposal would do
exactly that.
EPA has stated that farmers are exempt from the proposed
rule, and nothing will change, yet they also state that the
rule will extend Federal regulations to most seasonal and
rain--seasonal rain depending streams. This is confusing. It is
my understanding that there are no protection in this proposal
for common farming activities, and exemptions are available
only for farmers continuing since--farming practices since
1977. Since I was born in 1979, does this mean the exemptions
do not apply to me?
What if ultimate effect of the rule prevents farmers from
passing their operations to their children, or prevents young
people like myself from becoming farmers? By expanding the
regulation to rain dependent streams, EPA could regulate new
areas, like dry land. What if the expansion leads to new
regulations, or eliminates common accepted farm practices? What
would it require for the permit to control--for permits to
control pests or mowed grass across a ditch? There is not
guarantee that such permits would be issued, or even evidence
that stopping these activities would have any real effect on
water quality.
States like Pennsylvania already have significant laws, and
regulations, and programs in practice--in place to protect
water considered unregulated, including intermittent streams.
My written testimony identifies many of them. What's more, our
State DEP official can show that water quality improvements for
many of the State-driven and State-administered programs, and
what if expanded Federal regulation harms the State's ability
to continue to improve upon successful initiatives? I am
seriously concerned about the proposal, and its 370-page
document, and full compliance. I--and if I misunderstand the
regulation, I could be fined $37,500 per day. That is a pretty
scary thought for a producer like myself.
Over the next 90 days farmers like myself will be hard at
work in the fields, and at least the agency should extend the
comment period to 180 days to allow farmers to fully access how
the rule will impact our business, so we can provide proper
feedback. It would even be better if Congress took action in--
it would even be better that if Congress took action--in 1972,
Congress proposed to limit EPA authority to navigable waters,
and in 2010 Congress rejected the legislation proposal that
would do--that EPA now is attempting to do.
I hope that Congress will help the--help farmers convince
the agencies to ditch the rule. And thank you for the
opportunity to testify today, and I will answer any questions.
Thank you.
Mr. Shuster. Thank you very much. Ms. Fidler, proceed.
Ms. Fidler. Thank you. On behalf of CONSOL Energy--thank
you. On behalf of CONSOL Energy, a leading diversified energy
company headquartered in the Appalachian Basin, and CNX Gas
Company, a subsidiary of CONSOL Energy, we would like to thank
you for the opportunity to address the committee on the
proposed rule changing the definition of waters of the United
States as it applies to the Clean Water Act.
The proposed rulemaking expands upon the definition of
jurisdictional waters, and would include waters not
traditionally covered under the Clean Water Act. The EPA has
indicated that the intent to of the proposed rule is to
streamline the decisionmaking process with regards to which
waters are jurisdictional waters by increasing clarity as to
the definition of waters of the U.S.
CONSOL Energy feels that proposed change is unwarranted due
to current Federal regulation and robust State programs that
are already in place to protect waters of the U.S. The proposed
change will absolutely lead to increased permitting review and
processing time due to the uncertainty of jurisdictionality,
which will be an undue burden on industry. The expansion of
jurisdictional waters would have substantial impact across the
energy industry, and all industries, by requiring permits for
impacts to otherwise isolated waters, therefore triggering
additional Federal requirements with little to no environmental
benefit.
In September 2013, EPA published their draft ``Connectivity
of Streams and Wetlands to Downstream Waters'' report. The
report was used as a building block for expanding the Clean
Water Act's regulatory jurisdiction, however, this was done
prior to the Science Advisory Board review of the report. Such
expansion of jurisdiction should not be based on a report that
does not address the fundamental question of significance of
any hydrological connection. The Science Advisory Board has
published a similar conclusion in their draft review of EPA's
draft connectivity report.
In addition to the rivers, streams, and wetlands
traditionally recognized as waters of the U.S., the proposed
rule includes a third category, known as riparian areas. The
isolated resources in riparian areas do not pose a significant
or direct impact to waters of the U.S.
The connectivity report also does not fully account for the
Army Corps of Engineers' ``1987 Wetland Delineation Manual,''
which requires three field tests for determining the existence
of a wetland. The author's selective literature choices led to
an error in the required wetland determination analysis,
illustrating that the report was not ready to be finalized when
the EPA drafted the proposed rule.
At CONSOL Energy, we pride ourselves on being excellent
stewards of the environment. Compliance with all regulations
intended to improve and protect the environment in the areas
where we operate is one of our top core values. CONSOL Energy's
environmental standards go above and beyond regulatory
requirements. In working toward these values, our environmental
strategy relies on avoidance of jurisdictional waters, as
currently defined. The proposed rule change would significantly
limit our ability to avoid newly regulated jurisdictional
waters. The additional planning, re-training, permitting, and
mitigation associated with this limitation significantly
impacts our project lead times and costs.
To demonstrate these impacts on a coal project, we have
prepared two exhibits. This first one shows stream resources in
an impact area as the rule is today. This is a large project
that is just in the planning and design phase. We haven't had a
JD completed on it yet. This project as is right now, we are
impacting 82,000 linear feet of streams. Now, if the rule were
to be approved, this is how the impact area is increased. And
this is actually a liberal determination, and we are only
assuming a 100-foot buffer zone.
However, if the rule was interpreted in the most
conservative way, this entire area could be considered wetland
area, and our impact would be large. Overall, it is an increase
of 10 percent stream resources, 15 percent wetland resources,
and an additional 581 acres of this riparian area. It is a
significant--it has a significant effect on our cost, and we
are estimating, to mitigate this area, it would add over $10
million just to this project.
In closing, CONSOL Energy would like to re-emphasize that
we do not support the proposed rule changing the definition of
the waters of the U.S. These changes would lead to considerable
permitting delays, additional mitigation cost, and a loss in
our ability to consistently avoid and minimize, while extending
waters of the U.S. coverage into areas that have no significant
hydrologic connection to jurisdictional waters. Thank you.
Mr. Shuster. Well, thank you all. Thank you, Ms. Fidler.
Just let me start with you, Ms. Fidler. You mentioned this
project here. You are confident under the current rule, on the
way you had it laid out in the first slide, that you can
protect those streams and the quality of water there with what
you are doing?
Ms. Fidler. We will impact those streams, and we are--we
plan on impacting those streams. It is budgeted, it is planned
for. We will be mitigating in the same watershed as our impact.
However, when you look at the project, if the proposed rule
were to be applied, we would still probably complete the
project, however, it would have to get some really hard--we
would have to take a really hard look on whether or not we
would be able to mitigate----
Mr. Shuster. Right.
Ms. Fidler [continuing]. Our impact.
Mr. Shuster. Right. Thank you.
Ms. Fidler. Um-hum.
Mr. Shuster. And I think it has been pointed out here by a
number of you that--especially Mr. Nagle, that this proposed
rule, there is great uncertainty. You are not sure how it is
going to be--once it is--if it is implemented, how it will be
rolled out there by the agency. And so I think good for us to--
for me to start with the question. Mr. Murin pointed out that
when you did the first Pennsylvania State Programmatic General
Permit, you said that you put your comments in to the Corps,
and they didn't pay attention to them. Is that correct? That is
what your statement said?
Mr. Murin. Generally, yes. As part of the SPGP process,
both the Corps and the Department conduct a negotiation. As I
mentioned, it is an Army Corps permit, but we did have some
concerns about some of the interpretations----
Mr. Shuster. Sure.
Mr. Murin [continuing]. That were being----
Mr. Shuster. Yeah, but, going back before that, is that
typical of the Corps of Engineers, or when you are dealing with
the Federal agency, that they disregard many of your
suggestions?
Mr. Murin. I wouldn't say it is typical. I mean, it is a
negotiated process.
Mr. Shuster. Sure.
Mr. Murin. So each time--especially with SPGP, as I
mentioned, that we are in the fourth iteration of it now, and
so each time there are some discussions, and some of our
suggestions are taken, recommendations, sometimes they are not.
Mr. Shuster. Right. And Mr. Peter and Mr. Nagle, what has
your experience been in the past? Not looking forward to this
new rule, because, again, we don't know, you know, what kind of
impact it is going to have. What has your experience been
dealing with these different agencies at the Federal level? Has
it been one that it is ever increasing the burden on you, and--
with getting minimal results?
Mr. Peter. That is correct. It is always a timely manner,
you know, and it just delays projects extensively on the time
factor, which always increases costs. You know, there is not
speedy correspondence and so on, so it is very timely.
Mr. Nagle. I have had no personal experience with any--
prior to this ruling coming, because with me--part of becoming
a farmer, I have not had to experience anything with the EPA,
so that is why the uncertainty where we go--here.
Mr. Shuster. And in your daily activities out there on the
farm, there are times when, what you mentioned about
playgrounds and your farm, that water will lay somewhere, maybe
depending on your farming techniques? Is that a big concern of
yours?
Mr. Nagle. That is a large concern of mine, because, you
know, if you have a rainfall that produces, you know, 2 inches
of rain in 20 minutes, anyone's ground, or especially our
fields, are going to have some streams, you know, intermittent
rain streams. And we work with--pretty closely with NRCS now to
have compliance, as far as conservation plants, nutrient
management plants, to ensure water safety. You know, we have
our field conservation strip, a 90-foot strip to prevent
erosion, so we are pretty much taking all the precautions now.
And, with further regulations, things could be more difficult
for us.
Mr. Shuster. Right. And things like, at a construction
site, or on a farm, if you get a wet day, and you get ruts from
your equipment that you don't tend to, that can potentially
have an unintended consequence of having water lay in it. So
things as simple as that can have an impact. Is that correct?
Mr. Nagle. Yes.
Mr. Peter. Yeah, I would think so. I mean, something as
small as a very minor tributary that only has water in it when
you have an excessive amount of rain, if they look at that, you
know, I mean--and with our topography, especially here in
Pennsylvania, I mean, we are all hills and valleys, and, you
know, we get a heavy rain that comes down, it is going to run
somewhere. You know, it is just a rain shower, but those, you
know, if they look at those as being protected waterways, just
a little stream that only happens whenever it rains, or like
you are saying, a low area, or something in a playground that
lays water, that could be just detrimental to the construction
industry, and I am sure to the overall economy.
Mr. Shuster. Right. It has been my concern that, you know,
in Washington, DC, we do a one size fits all for everything,
and that somebody tells these bureaucrats in Washington that,
you know, the Pennsylvanians don't love their land. I look
here, everybody here is drinking--everybody here drank, I
think, Pennsylvania water this morning, and we all care about
water quality.
And for the Federal Government to--it is not just in the
environment. It is everything we do that happens in Washington,
that they feel as though we don't love our children enough to
educate them, we don't love our environment enough to protect
it. So, again, I have grave concerns that this is going to
happen, if it does happen, that we will see a never-ending
rampup of regulations. And, again, a site like this, it is
going to cost $10 million, potentially more.
Ms. Winkler, your experience has been with the stream
crossings, it increases the cost of your doing business?
Ms. Winkler. It does significantly increase our costs, not
only in additional permitting, but in the delays, which has
been mentioned before, which increases total project costs
overall. Not just in construction, but in just delay in getting
gas in to market.
Mr. Shuster. Right. Thank you. And with that, I will yield
to Mr. Gibbs for some questions. We will probably have two
rounds of questions.
Mr. Gibbs. Thank you, Mr. Chairman. Mr. Murin, I am, you
know, earlier this month, a few weeks ago, Secretary Darcy, the
Secretary of Army Corps-Civil Works for my subcommittee, and--
we talked about this proposed rule. And, you know, I kind of
tend to almost interpret, maybe the general public might too,
that by them putting out this proposed rule, they are implying
that States aren't doing their job.
And I would first like you to comment on that, but, I am
concerned, you know, Mr. Peter made some good comments about,
you know, consistency, timely--delay--possibly delay permit--
further. You know, as Chairman Shuster said, one-size-fits-all
policy on Washington. Can you just kind of expand on what your
thinking is? Is there really a need for the U.S. EPA and the
Army Corps to expand their scope of jurisdiction, you know, how
that applies to, you know, the job you are doing here in
Pennsylvania as a State regulator?
Mr. Murin. OK. Yeah, I--at this point in time, as I
mentioned in the testimony, is that we haven't had a chance
review the proposed rule yet, so, as far--it might be a little
premature to anticipate what maybe the Corps or EPA is
proposing. But at least currently, under the current rule, we
see it as working pretty effectively, for the most part.
Certainly, as I testified, that there are some anomalies as it
deals with--especially the pipeline projects, and how certain
definitions are interpreted, what the procedures are.
But from Pennsylvania's standpoint, we are looking for that
efficiency. We want to have a consistent viewpoint. Anything
that the State can certainly handle at the local--at the State
level, or at the local level, that is something that we would
like to promote. Certainly there are some differences. There
will probably always be some differences because of the
different legal authorities. But, from a State perspective,
seems like things were--are working, for most part, pretty
well.
Mr. Gibbs. Does--to build on that a little bit more, I have
heard some, I think, testimony today about the Baltimore
District of the Army Corps, and it talks about the individual
stream crossings, the pipelines. Is Baltimore District doing
something different here in Pennsylvania than the rest of the
districts around the country are doing, you know, in regards to
the permitting process?
Mr. Murin. Overall in Pennsylvania, not just the Baltimore
District--there are three Corps districts in Pennsylvania,
Pittsburgh, Baltimore, and Philadelphia. And the Baltimore
Corps District is the lead district, so it helps coordinate
activities statewide. It is different from the standpoint that
we do have the SPGP process. Some other States do rely upon the
Nationwide Permit, the Nationwide Permit 12, as I mentioned,
and some other folks that had testified as well. So, from that
standpoint, there are some differences. I believe there are
about 20 States around the country that have a SPGP process,
rather than relying upon the Nationwide Permit.
Mr. Gibbs. All right. OK. Thank you. Mr. Nagle, a couple
weeks ago, in Ag Committee, we had Secretary Vilsack before the
committee, and I asked the Secretary if normal farming
operations would be exempt under the rule, and he said
absolutely. But then he had 52, I think it was, specific
exemptions especially for dealing with the NRCS, the Natural
Resources Conservation Services, farmers. Do you have any
thoughts about why they would have to have a list of exempted
rules if they think the rule--all farming opportunities are
exempt?
Mr. Nagle. Yeah, I don't know why they would have all
farming exempt. I don't know why they would have a list of
exemptions that would have to do with our current thing with
NRCS, technically involved with crop insurance, and things like
that. We have to be in compliance with NRCS. So I would think,
as a whole, generally, most farmers are already in compliance,
so it kind of alarms me that they are asking for additional
exemptions, if they are exempt. So that is kind of the problem
that we--and I have, is the cloudiness of it.
Mr. Gibbs. Yeah, I am really concerned about it too,
because they make the statement that normal farming practices
are exempt, but then they produce this list of specifics, and I
don't really know the necessity of that. And I also would be
concerned, you know, just--I believe that this administration
thinks that they already have jurisdiction of all waters of the
United States, and then--State sovereignty issues are really
concerning to me. I am going to yield back to the chairman, but
we will do another round. Thank you.
Mr. Shuster. Thank you, Mr. Gibbs. Like you say, we will
have a second round. Now yield to Mr. Denham, chairman of the
Subcommittee on Railroads, Pipelines, and Hazardous Materials,
and he also happens to be a farmer from California, so he knows
these issues that we have been talking about here today very,
very well. So, with that, I yield to Mr. Denham.
Mr. Denham. Thank you, Chairman Shuster. Ms. Fidler,
looking at your map over here, what type of boats go on these
different waterways here? Do you have any vessels that go on
those?
Ms. Fidler. None that I am aware of.
Mr. Denham. No?
Ms. Fidler. No.
Mr. Denham. No boats? So----
Ms. Fidler. These are very small----
Mr. Denham. You----
Ms. Fidler. It is a very small stream.
Mr. Denham. Could you even put a canoe, and maybe--put a
paddle in the water, and----
Ms. Fidler. Not even after a large rain event.
Mr. Denham. So not navigable by any means?
Ms. Fidler. Not in my opinion.
Mr. Denham. Do they ebb and flow with the tide? Does the
tide create any movement in these?
Ms. Fidler. No, sir.
Mr. Denham. How about interstate or foreign commerce? Do
you have any vessels that go through those that create commerce
in the local area?
Ms. Fidler. We do not.
Mr. Denham. Thank you. Now, obviously I asked those
questions, because that is why the Clean Water Act was set up,
from a national perspective. Mr. Murin, in California we have a
State Water Board, and that State Water Board, has a great deal
of regulatory authority over our farms, our water that comes
off of our farms, certainly all of our different waterways. Do
you have something similar here in Pennsylvania?
Mr. Murin. Not that I am aware of, no.
Mr. Denham. So do you have any regulations over your local
and State water usage?
Mr. Murin. Yes, yes, we do, and the Department of
Environmental Protection has the laws and regulations that we
implement.
Mr. Denham. And do you feel the need to have greater
regulation, from a Federal perspective, or is Pennsylvania
getting the job done currently?
Mr. Murin. I believe that we are getting the job done
currently, based upon the implementation of our laws and
regulations.
Mr. Denham. So moving the standard from navigable waters,
which obviously these are not navigable waters, to
jurisdictional waters, waters of the United States, how is that
going to adversely affected your regulatory authority?
Mr. Murin. I don't know if I can answer that right now. As
I said, we haven't fully--or fully reviewed the proposed rule.
I think, from Pennsylvania's perspective, based upon the
definitions that we have, for what we regulate under our Acts
and our regulation, that we pretty much have all those waters
already covered.
Mr. Denham. To what size? What size of water are you
regulating?
Mr. Murin. It is--it doesn't regulate as far as size. I
mean, all wetlands are regulated in Pennsylvania. Under the
Clean Streams Law, we do have regulation over all waters that
are defined in the Clean Streams Law. Streams, creeks,
rivulets, dammed water, ponds, it goes on. Under the chapter
105 regulations, as far as streams, it is pretty much
everything that has a defined bed and bank, to keep it simple.
Mr. Denham. A bed and bank, meaning?
Mr. Murin. A bed of a stream with an established bank.
There is a difference in elevation between where the stream
flows and the bank.
Mr. Denham. But a pond as well? You would have regulatory
authority over a pond?
Mr. Murin. We do have some regulatory authority over that,
certainly in the Clean Streams Law, and then from the Dam
Safety Encroachments Act and chapter 105; it would depend on
certain factors.
Mr. Denham. And this new jurisdictional--what I would
consider an overreach would not only regulate everything that
you have described, but even go further to mud hole, puddle? I
mean, this becomes a land use policy, as well as just water
use, would you agree?
Mr. Murin. If it is--if the--if it is as you described, it
would expand it from that perspective.
Mr. Denham. Thank you. Mr. Chairman, my time has about
expired. I will yield back.
Mr. Shuster. Thank you. And, with that, go to Mr. Perry for
questions.
Mr. Perry. Thanks, Mr. Chairman. Mr. Murin, I am trying to
figure out, and it seems that you would be the best person on
this panel, maybe, to enlighten us as to what tangible clean
water benefits, what water quality benefits, will be realized
if this rule is enacted?
Mr. Murin. Again, I am not sure the specifics of what is
proposed, but based upon what is existing, certainly the
tangible benefits are protecting wetlands----
Mr. Perry. I know what is existing. I am----
Mr. Murin. Yeah.
Mr. Perry [continuing]. Talking about what is proposed.
Mr. Murin. Yeah. And I can't----
Mr. Perry. OK. All right.
Mr. Murin. I am sorry, at this time I can't----
Mr. Perry. All right. So would--based on what we think is
proposed, if Mr. Nagle drove his tractor through a field, and
there was, you know, there had been a rain maybe a week before,
and there is a portion of it that is a little lower, but he is
trying to get his crops in or out, maybe he gets a little close
to it and leaves a ditch. Maybe he has to pull his tractor out
with another tractor because he gets it mired into the axle,
and--so on and so forth, leaves a ditch, can't repair the ditch
for some time because it is muddy. Ditch fills up with rain,
with water. Is that now, under the current--or under the
proposed rule under the jurisdiction?
Mr. Murin. Again, I don't know. As far as--if there is no
change to what is defined as far as a wetland, the wetland area
would have to have the soils, the hydrology, and the plant
community----
Mr. Perry. It says ephemeral bodies of water.
Mr. Murin. Yeah.
Mr. Perry. Is that--would that be considered ephemeral?
Mr. Murin. No.
Mr. Perry. It is transient, it is not permanent, but there
is water in it. What would the length of it have to be for it
to be ephemeral?
Mr. Murin. I think there would have to be connectivity to
other----
Mr. Perry. So if it was a low-lying area----
Mr. Murin. Yeah.
Mr. Perry [continuing]. That is generally dry, but
occasionally wet, there is a ditch in it with water in it now,
could the connection be made?
Mr. Murin. I guess it could.
Mr. Perry. OK.
Mr. Murin. Yeah.
Mr. Perry. Yeah. Point taken. So I have got a swing set in
my backyard for my kids, and where they swing, you know, their
feet grind out the dirt. There is much that--I try to put it
back in and plant it, and so on and so forth, water in it. You
are saying no, but it is up to--is it--would it be up to
interpretation?
Mr. Murin. Yeah, I think that is----
Mr. Perry. Yeah, that is a problem.
Mr. Murin [continuing]. When it comes down to----
Mr. Perry. That is a problem for me.
Mr. Murin. As far as the Department is concerned, those
were--would not be areas that we would----
Mr. Perry. As far as your Department is concerned right
now.
Mr. Murin. Right.
Mr. Perry. However, you have been in a position on many
occasions to enact things and enforce things foisted upon us by
the Federal Government, even at your displeasure or
disagreement. I would cite the Chesapeake Bay strategy, to a
certain extent, to some of that. But I don't want----
[Inaudible.]
Mr. Perry. Let me move on. I want to ask Mr. Spigelmyer a
question. I have got a narrative here out of the Los Angeles
Times, 4/26, so this is just a couple days ago, regarding
energy prices going up for good. And it says, ``The Federal
Government appears to have underestimated the impact as well.
An Environmental Protection Agency analysis in 2011 had
asserted that new regulations would cause few coal plant
retirements. The forecast on coal plants turned out wrong
almost immediately, as utilities decided it wasn't economical
to upgrade their plants, and scheduled them for decommission.''
In vain--in light of that, in light of increasing prices,
and in light of, you know, and other statistics in the same
article, ``Current regulations going into effect next year will
result in 60 gigawatts of electricity out of the grid, which is
tantamount to 60 nuclear reactors.'' Based on that, when people
say, you know, the regulations aren't mattering all that much,
you gas drillers, you oil people, you can go somewhere else.
Taxes--you, you know, or no, you can't go--the gas is here. If
you want the gas and the oil, you have got to get it here. You
folks in the energy industry, any other options?
Mr. Spigelmyer. First of all, yeah, Congressman, let me
come back to the point that you made about electric power
choice, and costs there. In 2007, 2008, the Public Utility
Commission and the Commonwealth were actively talking to
consumers across the--about the rate caps coming off, and power
rates going up dramatically. At the same time, we were
producing, you know, ample supplies of natural gas, and growing
that supply rapidly through horizontal unconventional
development.
Prices dropped fairly rapidly. Power choice was made. Many
of the generators in the Commonwealth, and this region, moved
to natural gas, saving consumers billions from where we were
going to be with rate caps coming off. Certainly added
uncertainty with regulatory--with a regulatory environment.
Added costs across the power generation sector will have an
impact on price, no doubt about that.
Mr. Perry. Mr. Chairman, with your indulgence, just want to
draw the thread. What I am trying to show and illustrate is
that Mr. Murin, who is from the DEP, and this is his expertise,
although he has, you know, he is not representing the Federal
Government, the EPA, in this regard, but he is going to be
the--they are going to be the agency that has to enforce a lot
of this stuff in the State, and any other State, their--
tantamount agencies would do the same thing, could quantify
very little value in this regulation.
And the other side of the equation, whether you are in the
farming industry, or whether--energy industry, additional
regulation is going to cause significant tangible problems,
especially in the energy industry, where there is a lack of
power, especially during peak times, or unexpected things, like
the polar vortex, or exceptionally hot periods of time, where
everybody is running their air conditioning, that we are going
to have blackouts, brownouts, not to mention--notwithstanding
the increase--the great increase--46 percent is what the
article says the increases in prices will be. So nearly 50-more
percent based on nothing else more than these regulations. And
I yield back.
Mr. Shuster. Thank the gentleman. Appreciate you making
those points. With that, Mr. Rice is recognized.
Mr. Rice. Thank you, Mr. Chairman. Well, at this panel here
we have got represented food, energy, and construction, and
regulation. Food, energy, and construction. We are talking
about a process here that will lengthen the time for
permitting, make it more difficult, and run up the costs,
right? I don't know what we are concerned about. We are just
talking about food and energy, for God's sake. Maybe we are
overreacting here. Everybody in this room wants to protect the
environment. This is one more example of Federal overreach. And
my whole focus in Congress is on American competitiveness and
jobs, and certainly food cost directly affects that, and
certainly energy cost directly affects that.
I believe the current administration thinks we need to be
off fossil fuels altogether. I think that is their ultimate
goal, and they want to run up the cost of fossil fuels to the
point that alternative energy makes sense, because that is the
only way it makes sense in the current environment. Hey, in the
long run, I hope we are off fossil fuels eventually. I hope we
are on alternative fuels. But we are not ready yet, are we? We
don't have the technology for it. So we have got to keep using
what we have got.
And, in my opinion, we should do everything we can to make
that available, within reason. We need to protect the
environment. But if we are going to be spending money on fossil
fuels, we need to be doing it using our resources, I believe,
and keeping our wealth here, instead of sending it overseas.
I think that the cost of fuel is a fundamental factor in
American competitiveness because, on the one hand, we create
jobs right here using our own fuel, and we also keep our wealth
here, which--and we create a tax base here, and we can use the
taxes to build our own infrastructure, and all those things
factor in competitiveness. But also, by putting these
additional regulations on, by dragging our feet, not
necessarily going out and stopping energy exploration, not
necessarily going and putting up roadblocks to prevent it, but
just not helping, by the Federal Government not helping with
it, that we hold costs up.
The war on coal, I have seen projections cost the average
consumer $40 a month on their utility bill. When the President
took office, fuel at the pump was $1.80 a gallon. Now it is
$3.50 a gallon. Even though those monies don't go to the
Federal Government, there is still taxes. You still have to
have the stuff. That is money out of consumers' pockets. That
consumer spending is two-thirds of the American economy.
And should we wonder why we have 2.8 percent growth 6 years
after the Great Recession, should we wonder why we have 6.7
percent unemployment--who here believes that 6.7 percent is an
accurate reflection of our unemployment in this Nation? I don't
either. So--no, I think that this is one more example of the
administration maybe not putting up direct obstacles to energy
exploration, but it is a way they could help, a way they are
dragging their feet. Keystone pipeline, absolute case in point.
There is a paragraph, Mr.--is Nagle or Nagle?
Mr. Nagle. Nagle.
Mr. Rice. Nagle? In your written testimony that I thought
was great. It says, ``It is extremely difficult for me and my
fellow farmers to trust the intentions of Federal officials in
development of this proposed rulemaking, given the history of
continuous effort of certain Federal agencies to expand their
power and authority. These Federal agencies have tried to claim
authority under the Clean Water Act of virtually any land area
over which a bird flies. Federal agencies have openly tried to
lobby Congress to remove the word navigable from the Clean
Water Act. These types of actions make me, and other farmers,
very doubtful that Federal officials will apply this new volume
of regulations in a way that is fair or reasonable to us, or
considerate of our needs and daily challenges.''
Well, I don't understand your concern. For goodness sake,
you don't trust the Federal Government? Yeah. Who was it? Was--
I think it was you, Mrs. Winkler. Were you saying that in--
looking at a stream crossing, that the Army Corps now looks at
the gas flowing through the pipeline, and its effect when it is
ultimately used? Was that you, or was that you, Mr.--one of you
was talking about that.
Ms. Winkler. Go ahead. I think it was you.
Mr. Rice. Yeah.
Mr. Spigelmyer. Actually, it wasn't necessarily the gas
flowing through the pipeline, but taking a look at overall
impact, rather than the authorized use that we are trying to
permit.
Mr. Rice. So there--I know on the Keystone pipeline they
are looking at the ultimate burning of the fuel, in terms of
whether or not they are going to approve that pipeline. Are
they doing that here as well?
Mr. Spigelmyer. Go ahead.
Ms. Winkler. In my experience, I haven't noticed that so
much as--really it has been the State of Pennsylvania to
discuss about how we--a topic many of us have touched upon
already. I think the State is doing a good job looking at each
individual impact of every single stream, be it ephemeral,
intermittent, or perennial. In my personal experience as a
consultant, and working at Rice, I have yet to encounter a
single permit in which the Army Corps comes in an requests
anything different than what the State is already requesting us
to do for protection.
And so, in terms of the material flowing, I haven't noticed
that they are really looking at that. But in terms of each and
every individual crossing, the State is already looking at
that. The Army Corps isn't adding anything but additional time.
Mr. Rice. My time.
Mr. Shuster. Thank you. We could talk a little bit more
about that, and I have been making the case that for the past
50 years or so the DEP in Pennsylvania has done just that, and
the Corps just lays that layer over. I think it is Washington
bureaucracy. Looking at the Marcellus Shale clay sand, there is
50 years of gas there. That means there is work for us, so that
is why they put that layer in there. And we have been trying,
in Congress, to push back on that. Unfortunately, we don't have
a Senate that is willing to work with us to do that.
Can you talk about your experience, Pennsylvania versus
Ohio, when it comes to permitting? Ms. Fidler, you can----
Ms. Winkler. I think this will work better, thank you.
Certainly. Rice is actually fairly new to our operations in
Ohio. We just started within the past year. But what we have
noticed is our ability to get into the construction phase our
pipeline projects is incredibly fast. And from the time that we
are ready to--we are--we start permitting to the time we are in
construction, we are looking at 45 to 60 days, versus my
experience in Pennsylvania for a similar type of project, a
short gathering line, maybe just a couple miles, in
Pennsylvania I am probably looking, on an average, of about 100
to 120 days.
So, again, when you are looking at a cost of doing
business----
Mr. Shuster. Time is money.
Ms. Winkler [continuing]. The exact same--similar type of
project, Ohio is much faster under the Nationwide Permit 12
process. And, again, it is the exact same--similar type of
controls. Rice Energy has actually gone above and beyond what
Ohio currently requires, and we follow the Pennsylvania DEP
rules for all our erosion control and sediment controls for our
pipeline projects in Pennsylvania. But in just--we don't have
that double layer of regulation. We aren't going through the
DEP and the Army Corps. We are just going through one agency.
Mr. Shuster. And the topography, the geology over in----
Ms. Winkler. Where----
Mr. Shuster [continuing]. Ohio, is it similar to
Pennsylvania?
Ms. Winkler. Where we are operating in Ohio, it is similar
to Pennsylvania. We are in southeast Ohio, so the same type of
rolling hill and terrain. Same type of concerns with, you know,
sediment potentially running downhill. It is just--it is a
difference of not having to get through as much regulation.
But, again, you are getting the same type of controls, same
result in the protection.
Mr. Shuster. Ms. Fidler, did you have the same experience?
Ms. Fidler. Yeah, I think we have had the same experience
as Ms. Winkler has with rights, and--on both the coal and gas
side of our operations. You know, looking from State to State,
and our coal operations in West Virginia even, it seems the
permitting process is more organized, more consistent, and more
clear. It seems a lot easier. And so, when you are evaluating a
project, Pennsylvania kind of might land in second or third
place.
Mr. Shuster. Right. Mr. Spigelmyer?
Mr. Spigelmyer. Yeah. Mr. Chairman, due to the activities
of both you and your office, as well as, you know the House
Committee on Transportation and Infrastructure, we have seen
some improvement in delay times at Army Corps. But, that said,
it is still redundant, it is duplicative, and it is time
consuming to go through that process with little to no
environmental benefit----
Mr. Shuster. Right.
Mr. Spigelmyer [continuing]. Being achieved. And, as you
mentioned a moment ago, time is money, and delay is money.
Mr. Shuster. Right. And, you know, that is the case we have
been making--Mr. Spigelmyer has been making with your
coalition. And whenever we bring in people from industry to sit
across the table from the Corps of Engineers, the natural
inclination is, because of the fear of the Federal Government,
is the industry isn't punching hard enough, making their case
forceful enough, and so we have got to continue to do that.
And again, you know, I understand, when you see what the
IRS has done to groups out there, and the fear they have,
again, coming up against a Government agency, the thought is,
are they going to delay my permit a couple more days, or a
couple more weeks, and cost me even more money? But we have got
to make the case. And I guess Mr. Spigelmyer, you are the heavy
hand of the industry, to come in and punch back. You have been
doing a great job of that. But we have got to continue to make
this case, because when we see this new regulation potentially
coming out on the waters of the U.S.--I appreciate the fact
that, Mr. Murin, you haven't fully looked at this. It looks
like CONSOL is really aggressively looking at it. That is
because it is going to cost you lots of money, so you are
looking at it aggressively, but this is the first hearing we
have had on it.
The rule only came out formally about a week ago, I guess,
so Mr. Gibbs, I believe, has announced a hearing on May 8th on
his Subcommittee on Water Resources and Environment, so I would
encourage the State of Pennsylvania, DEP, to really come
forward with your views on this. And we will, of course, be
urging States across the country and industry that are going to
be impacted by it. I know that the farmers and the construction
industry have been looking at it, so again, we want to make
sure that we get your views, because you are going to be the
folks that live with this, if it is.
We are fighting it. We are going to continue to fight it.
But, you know, it is problematic, and it is--we think it is
tough now with the stream crossings, I think this will
probably--Mr. Murin, would you say that if this--although you
haven't looked at it in depth yet, but--if a reg comes out
affecting the waters of the U.S., do you think that would
affect stream crossing permitting in Pennsylvania? Add----
Mr. Murin. It certainly could. I mean, certainly it is the
Department's perspective, again, to work with the Corps and the
EPA to identify how we can best coordinate those activities,
but--and we put in some policies and procedures ourselves to
help ensure that that is done at the State level. But certainly
the unknown is what would be done at the Federal.
Mr. Shuster. Right. And, Mr. Perry, you mentioned that--is
it the Los Angeles Times article that said a 46-percent
increase?
Mr. Perry. Forty-six.
Mr. Shuster. And what was the timeframe that they said----
Mr. Perry. They said, I think, 15 years----
Mr. Shuster. Fifteen years?
Mr. Perry [continuing]. Depends on what State you are in.
Mr. Shuster. And I think that is something we haven't seen
here. I just had a coal-fired facility in my district close
down, one next door in Congressman Murphy's district, to two
coal-fired plants. I think the estimates are, like, 390-some
coal-fired plants will shut down in the coming years.
And the American people haven't realized the impact of
energy costs going up as Mr. Perry quoted there. So that is a
scary thought, to see that our energy costs are going to go up
that much in the next decade or so because of these
regulations.
With that, I will yield to Mr. Denham for any questions
that he has. OK. Any--Mr. Gibbs?
Mr. Gibbs. Thank you, Mr. Chairman. I want to comment, I am
glad Ohio is competitive. Welcome to Ohio. Come over to Ohio. I
know we have got a lot of rigs from Pennsylvania there in Ohio
right now, and you are very much welcome there.
Mr. Spigelmyer, you know, on your permitting delays, when
did the Marcellus kind of take off? What--how long has it been
now?
Mr. Spigelmyer. The first Marcellus horizontal well was
drilled in 2004, but real rampup in development began around
2008, late 2007.
Mr. Gibbs. How--what--roughly what percentage of current
wells are shut in because they can't get the connecting----
Mr. Spigelmyer. It is probably less than 10 percent, but
close to 10 percent, and that is a pretty significant number
when you think about the fact we have drilled about 7,000 wells
in the Commonwealth to date, that have changed the outlook for
natural gas supply not only for this Commonwealth. We have
moved from a quarter of the natural gas that we consumed in the
Commonwealth to being a net exporter, producing 20 percent of
America's natural gas demand from this region now. That is a
pretty incredible feat in a short period of time. But when you
start talking about 10 percent of your wells being shut in
because of lack of pipeline infrastructure, or the delays
associated with being able to build that infrastructure, it has
significant impact on those----
Mr. Gibbs. Yeah, there is no doubt. I know in Ohio, in
Utica, we have--it is more wet gas----
Mr. Spigelmyer. Right.
Mr. Gibbs [continuing]. And we are building 11 separation
facilities----
Mr. Spigelmyer. You bet.
Mr. Gibbs [continuing]. Currently, and we have to connect
them all up, and the gathering pipes--the pipelines to--break
out the ethylene, and all the other wet gases, and dry gas, and
it was a little different.
Mr. Spigelmyer. Yeah. We have an interesting situation in
Pennsylvania, where we have a little bit of both. We have
probably a world-class dry gas play in the northeastern part of
the Commonwealth. Some would call it Gucci gas. It is pipeline
capable gas almost right out of the well. And we have wells in
northern Pennsylvania that may be the best in the world.
Southwestern Pennsylvania is under-pressured. It does yield
heavy hydrocarbons, ethane, pentane, butane, isobutene,
propane.
All those liquid streams are there, and our operators are
active, and need to do that same exact work that you are
talking about in the eastern area of Ohio, building
compression, building cryogenic facilities, pipelines, and
gathering facilities. And we are very hopeful that soon we will
also have cracking technology available to open up new
opportunities of manufacturing.
Mr. Gibbs. I will just open this up to the entire panel,
but I am really concerned in the proposed nearly 400-page rule,
which kind of blows me away. I know Secretary Darcy, in my
committee a couple weeks ago, made the comment about case-by-
case basis. And if you read through that rule, seems like there
is a lot of discretion by the Feds to define what a tributary
might be. You know, I think we had some discussion already. It
could be a road ditch, obviously.
But does anybody want to--I really want to hear case by
case, if you talk about inconsistency, and a lack of certainty,
and--I think we see a little bit here with the Baltimore Corps
District, versus maybe the Huntington District, when--talk
about pipeline permitting. Anybody want to expound on that
case-by-case scenario that they are talking?
Ms. Winkler. OK. Well, I know, just from my experience,
Rice is somewhat unique in that our operations in Pennsylvania,
and our operations in Ohio, are all in the Pittsburgh Corps
District. So to see the difference between a permit submitted
in Pennsylvania, and a permit submitted in the--in Ohio, in the
comments that you--the process is just amazing, even though it
is going to the same Corps.
Now, in terms of individual projects, and--I know right now
in Pennsylvania, if it is a roadside ditch, we are already
calling it a stream. It is an ephemeral stream. We do that. At
least in the southwest region, we are required to do that.
That--I think--really, all we are asking for, as an industry,
we just want some consistency. You know, I don't necessarily
agree with having to call a roadside ditch a stream----
Mr. Gibbs. Yeah, I was just going to say, I would be
careful with that, but----
Ms. Winkler. Yeah. But what we are asking for--and I know
Rice doesn't either, but we just need--all we are asking for is
just some consistency. If it is a roadside ditch, it is a
roadside ditch. You know, it is not carrying--it is not
navigable. You can't put anything on it. It is not carrying any
large amount of water any one time. And so----
Mr. Gibbs. I just wanted to ask a quick question----
Ms. Winkler. Um-hum.
Mr. Gibbs [continuing]. Of Ms. Fidler. You talk about the
Science Advisory Committee hasn't reported yet. I brought that
up with Secretary Darcy, and I got kind of a gray answer. You
stated in your comments that the report hasn't been put out
yet, is that correct, and that it is--or it is under review,
and--but they put the proposed rule out there anyways?
Ms. Fidler. That is right. The EPA's draft report was put
out before the Science Advisory Board had an opportunity to
review it. And right now, on their Web site, the Science
Advisory Board's review is in a draft form--draft form.
Mr. Gibbs. OK. Thank you. Thank you, Mr. Chairman.
Mr. Shuster. Mr. Perry?
Mr. Perry. Thanks, Mr. Chairman. I am going to start out
with Ms. Winkler. I understand that no other district of the
Army Corps approaches the permitting function for gathering
lines, water transfer lines, and other linear facilities in the
manner, and with the requirements now in place in Pennsylvania.
If you are, if you are able to explain, why the difference with
the Corps, how it treats Pennsylvania, and everybody else?
Ms. Winkler. Well, I think that is in regards to the PA
SPGP-4 with the aggregation of all of our impacts. If you are
in Ohio, each stream of--each stream crossing is considered its
own individual project.
Mr. Perry. Same work in Ohio, same work in Pennsylvania.
Ms. Winkler. Same work----
Mr. Perry. Why is it treated differently?
Ms. Winkler. I cannot answer that question for--but I----
Mr. Perry. OK. Mr. Murin, can you answer----
Ms. Winkler [continuing]. They do.
Mr. Perry [continuing]. Answer that question?
Mr. Murin. I would answer it the same way, that it is in
the way that the interpretation is of some of the terms.
Mr. Perry. So the point I want to make is that the Federal
Government, whether it is the EPA, or the Corps of Engineers,
or anybody, has the ability to interpret, based on what they
view, and it can be completely different for one citizen or
another based on that interpretation, and nothing else. Is
that--am I right or wrong, based on what you know about the
Corps' decision in Pennsylvania, versus the neighboring State
of Ohio, or any other of the 49 States?
Mr. Murin. My understanding is that the Corps can make
those regional determinations.
Mr. Perry. Right. OK. So--and herein lies, you know, the
problem with giving the blanket authority to the Federal
Government, whether it is the EPA or the Corps of Engineers.
Mr. Peter, you build houses, right?
Mr. Peter. Correct.
Mr. Perry. So, based on your testimony, and I agree, based
on what I have read, regarding the proposed rule, the term
shallow, or shallow subsurface connection, leaves the door
completely open, and unbounded jurisdiction by the Department,
or blanket jurisdiction for determination. So you build houses,
right?
Mr. Peter. Um-hum.
Mr. Perry. You buy a piece of ground, you are doing a spec
home. Maybe you are doing some townhomes, some low-cost housing
so people can get in the first time. You are working with the
local zoning commission, the local planning commission. You get
your stuff in order, and you start building, and it is based on
a price point for somebody to get in. Maybe a first time
homeowner like I was at one point, $100,000, $150,000,
something like that.
And all of a sudden this subsurface connection, below the
surface, is made between the ditch your pettibone made putting
up the roof and the stream a quarter mile away. What does that
do to your price point? What does that do to your business?
Mr. Peter. Well, I could see, you know, definitely
affecting the cost significantly because of it is happening to,
you know, if they take it into consideration as, you know, as a
waterway, I mean, to protect that, and----
Mr. Perry. How will you know about the subsurface
connection? How do you know?
Mr. Peter. You don't. I mean, and that is----
Mr. Perry. How do they know?
Mr. Peter. Yeah. I don't know what the--I don't know how
anybody would know what is there.
Mr. Perry. Well, how can you plan for that when you are
doing your cost estimate about how much you are going to sell
that home for to a new time home buyer--first time home buyer?
Mr. Peter. It would be very difficult to plan for. You
know, the only thing that you could do----
Mr. Perry. Wouldn't it be just a guess, like, a hope, that
I could build it before EPA came in and made the connection?
Mr. Peter. Right. It is--correct. It is either that, or, as
I am indicating--some of which is--but sometimes you have to
look at things and anticipate the worst. And, of course, then
that increases the cost. And, you know, if that is--comes to
that point, when you are looking at something like that, you
may have to build a factor in there if you experience--and, you
know, a money factor included into your project, which--and
then, as I say, then, you know, we try to keep housing
affordable, and that is our goal, all of us. So, if you have to
do that, you know, and then maybe it wouldn't be used, but
maybe it would be. But everybody is going to have to build
something in there in case something like that happens.
Mr. Perry. OK. Thank you. Mr. Nagle, you know, I think a
lot of people don't understand the cost of farming when you
have got a head for a combine costing $100,000, and that
doesn't include the machine itself, and you need multiple
heads, you need a corn head, you need a weed head. How does
this potentially affect--you are--I don't know how anybody
young gets into farming. You have got to pay a mortgage based
on crops or animals, and mortgage on land. And I don't know
what it goes for around here, but where I live, it is pretty
darn expensive.
Like, nobody gets into farming. Everybody sells their farm
for development because they can't afford to, even though they
may love it. Explain to us how this proposed rule is going to
affect new people, young people, whether they inherit the farm,
or whether they want to buy the farm. How is it--how do you see
it affecting them?
Mr. Nagle. Probably some of the biggest factors affecting
is the $37,500 per day fine if you are found on a rule that you
weren't in compliance that you don't know if you are or you are
not in compliance. I know myself, and probably most farmers, we
wouldn't stay in business too long if we were out of compliance
for 10 or 20 days. I mean, we don't have any--that much
capital.
And then as far as the land that we farm, we have--setbacks
on, you know, if an intermittent stream comes through once a
year, they say you have to set back, you know, 100 feet on each
side, multiplied by--if I am farming 750 acres, and pretty
hilly in parts of Pennsylvania, so I am just guessing off the
top--30 or 40 different ditches, that is a lot of acres that
are tillable and not on crop production. And, you know, we are
on a--definitely a market-based relation. We have to, you know,
our bushels per acre. So that would be--definitely affect the
amount of acres that we would be actually farming.
Mr. Perry. Let me ask you this. Do you--the acreage you
currently farm, do you know all the subsurface connections
right now? Do you know them?
Mr. Nagle. No. No, I do not.
Mr. Perry. Do you know how to figure that out?
Mr. Nagle. No, I don't.
Mr. Perry. Who is going to determine that?
Mr. Nagle. I am not sure who determines that.
Mr. Perry. Mr. Chairman, thank you. I yield.
Mr. Shuster. Thank you. Mr. Rice?
Mr. Rice. I have to come back to you, Mr. Nagel. You say
you don't trust the Federal Government to fairly and
efficiently administer these rules to farmers, and I think that
equally applies to these energy companies and contractors here.
It would be absurd to think that if you mishandled a ditch
adjacent to one of your fields that the Federal Government
might shut that field down until the dispute was resolved, and
charge you $37,500 a day.
But it is also absurd to realize that it takes 10 years to
get approval to build a highway, and it takes 15 years to get
approval to dig out a port that has been dug out five times
before. It is also absurd to think that it takes 5 years, and
counting, to get the Keystone pipeline approved. So, no, I
think your mistrust is well placed.
I believe that Federal regulation is a noose around the
neck of the American economy. I think if we can compete fairly
globally, then nobody can beat us, but we are strangling our
own selves. We have a noose of regulation around our own necks,
and we are strangling our own selves. I think you should keep
your mistrust. I think that George Washington, and Thomas
Jefferson, and John Adams, and Ben Franklin, they didn't trust
the Federal Government either, and they are the ones who wrote
the Constitution. So I am with you in that camp.
I think we need to do whatever we can to avoid this rule
being promulgated, number one, and we need to look at Federal
regulation in general, and see what we can't--can do to
streamline and make it much more efficient, because it has
grown completely out of hand, and this is just one area. I
mean, throughout the entire Federal Government, this is a big,
big problem. I have never dealt much with transportation and
infrastructure issues before I was in Congress, and I have only
been in Congress 15 months, but before that I was a tax lawyer
for 25 years, and believe me, I understand the impact of
Federal regulation on business. Thank you very much.
Mr. Shuster. Thank you for being here. I just have one
request for Mr. Spigelmyer. The Rice Energy situation is--
again, if you can talk to someone of your membership, and if
they can get their Pennsylvania experience, versus--I know you
have got people that operate all over the country. And, again,
I understand, and that is the question to Ms. Winkler about
Pennsylvania and Ohio. They are just on the other side of the
river from each other. So if you can get us examples--we will
even blot out the names, because, as Mr. Rice points out, and I
think everybody here, you don't trust the Federal Government.
You are afraid they are going to do something to harm you
financially if you spout off too loud.
Mr. Spigelmyer. Mr. Chairman, I mean, I think there will be
plenty of examples to provide you. Like you, and Congressman
Perry, you represent districts in Pennsylvania. Without
predictability, without certainty, capital flows elsewhere. I
don't think it was intentional, but Congressman Gibbs made it
real clear, it is easy to do business right now in Ohio. That
is a competitive disadvantage for our Commonwealth. It is
harder for us to attract jobs. It is harder for us to attract
capital. It is harder for us to grow the play if we are a less
predictable, a less certain environment to invest. And, you
know, again, appreciate the help that you have provided, and
attention you provided to this issue. We will continue to work
closely and get the answers for you.
Mr. Shuster. Again, I guess the last question I will ask
you, Mr. Spigelmyer. It is my view that, you know, one of the
diplomatic tools that we have available today, especially as we
are faced with folks in the Middle East who don't like us--
energy, and with Russia. And I believe that if the President
were to get FERC to sign some of these permits to start to
build liquefied natural gas plants at our ports around this
country, we would stop Putin--we would stop the Russians in
their tracks. Do you think that is reasonable?
Mr. Spigelmyer. Yeah. It is certainly a global competitive
play for America. Certainly it has changed, the--shale gas
development generally across this country. This isn't a
Marcellus or a Utica play. This is--shale plays all across the
U.S. have changed the outlook for energy, and it is a global
strength for us. It has put people to jobs. It has brought men
and women home from foreign land that, you know, had a helmet
on to wear a hard hat today produce natural gas, to produce
oil.
You know, when I was young, we were 57 percent dependent on
oil. As early as 2005, 2006, today, we are 42 percent dependent
on oil--on foreign oil because of the fact we are producing
more and more of it here at home. We need to continue to do
that.
Mr. Shuster. Well, again, thank you. And, again, I would
encourage everybody, especially the State of Pennsylvania,
before Mr. Gibbs holds his next hearing--it is important that
the States, and the different associations, whether it is the
Farm Bureau, or the home builders, or the energy companies,
really making sure you are looking deeply at this rulemaking on
the U.S. waters, because I think that all of us up here share
your concerns, and I think they are valid. So we want to make
sure that we hear from you. Not only that Congress hears, but
to make sure your members of your associations are out there
talking to the communities out there, what it is going to do to
the cost of food, the cost of housing, the cost of energy. It
is going to come out of the consumer's pocket.
So again, I think all of us want to protect the
environment, but we need to do it in a way that is science-
based, not some knee jerk reaction to protecting the
environment, because it is going to cost us all in the end,
jobs, it is going to cost us money, and we are not going to get
an environment that is necessarily cleaner, or more protected.
So, again, I thank everybody for taking the time, thank the
folks in the audience who took the time to come out today, and
thank the Members traveling from the various States, appreciate
it. Mister----
Mr. Denham. From Myrtle Beach.
Mr. Shuster. Mr. Denham, do you want to make a commercial
for California? Again, I really appreciate the Members coming
out and spending the time here today, and this is the way that
Congress gets the facts. And, as we move forward, we are going
to be pushing back hard on this new regulation that they are
looking at. So, again, thank you all very much. And, with that,
do I have to say anything? Hold on a second, I have got to do
housekeeping here. I ask unanimous consent the record of
today's hearing remain open until such time as our witnesses
have provided answers to any questions that may be submitting
in writing, and unanimous consent that the record remain open
for 15 days for additional comments and information submitted
by a Member or witnesses to be included in today's record.
Without objection, so ordered, and with that, the committee
stands adjourned.
[Whereupon, at 10:36 a.m., the committee was adjourned.]
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