[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]






    EPA'S PROPOSED GHG STANDARDS FOR NEW POWER PLANTS AND H.R. ___, 
                     WHITFIELD-MANCHIN LEGISLATION

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

                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON ENERGY AND POWER

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           FEBRUARY 13, 2013

                               __________

                           Serial No. 113-94
                           
                           
                           
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


      Printed for the use of the Committee on Energy and Commerce
                        energycommerce.house.gov
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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman
RALPH M. HALL, Texas                 HENRY A. WAXMAN, California
JOE BARTON, Texas                      Ranking Member
  Chairman Emeritus                  JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky                 Chairman Emeritus
JOHN SHIMKUS, Illinois               EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania        FRANK PALLONE, Jr., New Jersey
GREG WALDEN, Oregon                  BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska                  ANNA G. ESHOO, California
MIKE ROGERS, Michigan                ELIOT L. ENGEL, New York
TIM MURPHY, Pennsylvania             GENE GREEN, Texas
MICHAEL C. BURGESS, Texas            DIANA DeGETTE, Colorado
MARSHA BLACKBURN, Tennessee          LOIS CAPPS, California
  Vice Chairman                      MICHAEL F. DOYLE, Pennsylvania
PHIL GINGREY, Georgia                JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana             JIM MATHESON, Utah
ROBERT E. LATTA, Ohio                G.K. BUTTERFIELD, North Carolina
CATHY McMORRIS RODGERS, Washington   JOHN BARROW, Georgia
GREGG HARPER, Mississippi            DORIS O. MATSUI, California
LEONARD LANCE, New Jersey            DONNA M. CHRISTENSEN, Virgin 
BILL CASSIDY, Louisiana                  Islands
BRETT GUTHRIE, Kentucky              KATHY CASTOR, Florida
PETE OLSON, Texas                    JOHN P. SARBANES, Maryland
DAVID B. McKINLEY, West Virginia     JERRY McNERNEY, California
CORY GARDNER, Colorado               BRUCE L. BRALEY, Iowa
MIKE POMPEO, Kansas                  PETER WELCH, Vermont
ADAM KINZINGER, Illinois             BEN RAY LUJAN, New Mexico
H. MORGAN GRIFFITH, Virginia         PAUL TONKO, New York
GUS M. BILIRAKIS, Florida
BILL JOHNSON, Missouri
BILLY LONG, Missouri
RENEE L. ELLMERS, North Carolina
                    Subcommittee on Energy and Power

                         ED WHITFIELD, Kentucky
                                 Chairman
STEVE SCALISE, Louisiana             BOBBY L. RUSH, Illinois
  Vice Chairman                        Ranking Member
RALPH M. HALL, Texas                 JERRY McNERNEY, California
JOHN SHIMKUS, Illinois               PAUL TONKO, New York
JOSEPH R. PITTS, Pennsylvania        ELIOT L. ENGEL, New York
LEE TERRY, Nebraska                  GENE GREEN, Texas
MICHAEL C. BURGESS, Texas            LOIS CAPPS, California
ROBERT E. LATTA, Ohio                MICHAEL F. DOYLE, Pennsylvania
BILL CASSIDY, Louisiana              JOHN BARROW, Georgia
PETE OLSON, Texas                    DORIS O. MATSUI, California
DAVID B. McKINLEY, West Virginia     DONNA M. CHRISTENSEN, Virgin 
CORY GARDNER, Colorado                   Islands
MIKE POMPEO, Kansas                  KATHY CASTOR, Florida
ADAM KINZINGER, Illinois             JOHN D. DINGELL, Michigan
H. MORGAN GRIFFITH, Virginia         HENRY A. WAXMAN, California (ex 
JOE BARTON, Texas                        officio)
FRED UPTON, Michigan (ex officio)
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Ed Whitfield, a Representative in Congress from the 
  Commonwealth of Kentucky, opening statement....................     1
    Prepared statement...........................................     3
Hon. Jerry McNerney, a Representative in Congress from the State 
  of California, opening statement...............................     4
Hon. Fred Upton, a Representative in Congress from the state of 
  Michigan, opening statement....................................     5
    Prepared statement...........................................     6
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................     7

                               Witnesses

Joe Manchin, A United States Senator from the State of West 
  Virginia.......................................................     8
    Prepared statement...........................................    11
Janet McCabe, Acting Assistant Administrator for Air and 
  Radiation, U.S. Environmental Protection Agency................    15
    Prepared statement...........................................    17
    Answers to submitted questions...............................   225
E. Scott Pruitt, Attorney General, State of Oklahoma.............    55
    Prepared statement...........................................    58
Henry Hale, Mayor, Fulton, Arkansas..............................    74
    Prepared statement...........................................    76
Tony Campbell, President and CEO, East Kentucky Power Cooperative    80
    Prepared statement...........................................    83
Susan F. Tierney, Managing Principal, Analysis Group.............    90
    Prepared statement...........................................    92
David Hawkins, Director of Climate Programs, Natural Resources 
  Defense Council................................................   122
    Prepared statement...........................................   124
J. Edward Cichanowicz, Engineering Consultant....................   149
    Prepared statement...........................................   151
Donald R. Van Der Vaart, Chief, Permitting Section, North 
  Carolina Department of Environment and Natural Resources, 
  Division of Air Quality........................................   163
    Prepared statement...........................................   165
Ross E. Eisenberg, Vice President, Energy and Resources Policy, 
  National Association of Manufacturers..........................   172
    Prepared statement...........................................   174

                           Submitted Material

Letter of November 13, 2013, from the American Coalition for 
  Clean Coal Electricity to the subcommittee, submitted by Mr. 
  Whitfield......................................................   200
Report by John R. Christy, submitted by Mr. McKinley.............   203
Statement of Richard A. Bajura, submitted by Mr. McKinley........   218

 
   EPA'S PROPOSED GHG STANDARDS FOR NEW POWER PLANTS AND H.R. ----, 
                     WHITFIELD-MANCHIN LEGISLATION

                              ----------                              


                      THURSDAY, NOVEMBER 14, 2013

                  House of Representatives,
                  Subcommittee on Energy and Power,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 9:39 a.m., in 
room 2123 of the Rayburn House Office Building, Hon. Ed 
Whitfield (chairman of the subcommittee) presiding.
    Members present: Representatives Whitfield, Scalise, Hall, 
Shimkus, Terry, Burgess, Latta, Cassidy, Olson, McKinley, 
Gardner, Kinzinger, Griffith, Barton, Upton (ex officio), 
McNerney, Tonko, Yarmuth, Green, Capps, Barrow, Dingell, and 
Waxman (ex officio).
    Staff present: Nick Abraham, Legislative Clerk; Gary 
Andres, Staff Director; Charlotte Baker, Press Secretary; Sean 
Bonyun, Communications Director; Allison Busbee, Policy 
Coordinator, Energy and Power; Patrick Currier, Counsel, Energy 
and Power; Tom Hassenboehler, Chief Counsel, Energy and Power; 
Brandon Mooney, Professional Staff Member; Mary Neumayr, Senior 
Energy Counsel; Chris Sarley, Policy Coordinator, Environment 
and the Economy; Peter Spencer, Professional Staff, Oversight; 
Jean Woodrow, Director, Information Technology; Jeff Baran, 
Democratic Senior Counsel; Greg Dotson, Democratic Staff 
Director, Energy and Environment; Caitlin Haberman, Democratic 
Policy Analyst; and Alexandra Teitz, Senior Counsel, Energy and 
Environment.

  OPENING STATEMENT OF HON. ED WHITFIELD, A REPRESENTATIVE IN 
           CONGRESS FROM THE COMMONWEALTH OF KENTUCKY

    Mr. Whitfield. I would like to call this hearing to order. 
As you know, this morning we are having a hearing on the EPA's 
proposed greenhouse gas standards for new coal powered plants, 
and also we are going to touch on discussion draft legislation 
that has been introduced by myself, Senator Manchin, Morgan 
Griffith, David McKinley, John Shimkus, and many others in the 
Congress. Because of what many of us view as the extreme 
position in this greenhouse gas regulation that EPA has taken, 
our legislation would allow EPA to regulate greenhouse gases, 
but Congress would set the parameters for that regulation. And 
our legislation would apply to new plants, as well as existing 
plants, although they would be treated in significantly 
different ways.
    Just 1 year ago James Wood, the Deputy Assistant Secretary 
of the Department of Energy's Office of Clean Coal, made this 
statement regarding CCS technologies. ``Unlike the cost 
effective advanced technologies that were developed to reduce 
emissions of nitrogen, sulfur, mercury and particulates, 
technologies to capture and store carbon emissions from 
electric power plants are elusive, expensive and, although 
there are CO2 separation technologies in use in the 
natural gas and chemical processing industries, there has not 
yet been deployment in the electric power industry, and there 
is little history of the integration of these technologies with 
electric generation in reliable or cost-effective modes.'' So 
bottom line is we all know that EPA cannot point to a single 
completed operational facility that meets the emissions 
standard it has set for coal in this proposed regulation, and 
all of the demonstration projects that they refer to have 
received huge government subsidies. All of them are cost 
overruns. None of them are in operation.
    Now, Section 111 of the Clean Air Act defines the term 
``standard of performance'' as ``a standard for emissions of 
air pollutants which reflects the degree of emission limitation 
achievable through the application of the best system of 
emission reduction which the Administrator determines has been 
adequately demonstrated.'' And that is the key word. And I am 
sure that Ms. McCabe, who will be testifying later this 
morning, would agree, and knows full well, that there is going 
to be legal challenges on this proposed rule in the court 
system, because they have gone a long way down the road that 
they have never traveled before in setting these demonstration 
projects as something that is adequately demonstrated that the 
technology can work.
    So EPA is doing everything it can do, with the backing of 
the President, to move us down a road that we may not be yet 
ready to move down. As a matter of fact, when Congress 
addressed this issue the last time, the Democrats controlled 
the House and the Senate, and the Markey-Waxman bill was 
rejected by the U.S. Senate. They could not get it through. And 
so now they are attempting to do, by regulation, what cannot be 
done through legislation. So this morning we find ourselves 
living in a country where we are the only country in the world 
where you cannot legally build a new coal powered plant because 
the technology is not available to meet the emission standard.
    Now, I recognize that people are not rushing out to build 
new coal powered plants because natural gas prices are so low. 
But why in the world would a country, struggling with economic 
growth, trying to be competitive in the global marketplace, say 
to its citizens, and make a policy decision without a national 
debate, that one of our most abundant resources will not be 
used in America? Now, people say, well, natural gas prices are 
so low, and they are, as I have stated, but what is happening 
in Europe? How many of you know that over the last 20 months 
they are in the process of closing down 30 gigawatts of new 
natural gas plants? Why? Because natural gas coming out of 
Russia is so expensive, so what happened last year in Europe?
    Well, we view Europe as a green arena, and I am for all of 
the above, so they moved quickly down that road. 22 percent of 
their electricity is produced from renewables, but gas prices 
are so high that last year they imported 45 percent of our coal 
export market, which was the largest export market we had had 
in about 15 years, and so they are now building coal plants in 
Europe because of the high cost of natural gas. So why, in 
America, would we make the decision because gas prices are low 
now, we are not going to allow a new coal powered plant to be 
built? So that is what we are going to try to explore this 
morning. I understand there are different views on it, and, 
obviously, that is why we have hearings. But I look forward to 
the testimony of all our witnesses today on an issue that is 
very important.
    [The prepared statement of Mr. Whitfield follows:]

                Prepared statement of Hon. Ed Whitfield

    This morning, we continue our oversight of EPA's numerous 
regulations targeting the use of coal. The regulation at issue 
today, the proposed greenhouse gas standards for new power 
plants, may well be the most damaging one yet in the agency's 
all-out attack on one of our nations' most affordable, reliable 
energy sources, coal.
    There is a great deal about this proposed rule that is 
concerning for states and ratepayers. The proposed rule has 
serious implications for the affordability, reliability, and 
diversity of the nation's electricity portfolio. Today, we will 
examine this proposed rule and also discuss a more reasonable 
alternative. Senator Joe Manchin and I have released draft 
legislation that allows for greenhouse gas emissions 
reductions, but it does so in a manner that ensures coal 
remains a key part of America's energy mix. It would simply 
provide that in setting greenhouse gas standards for new 
plants, that EPA base the standards on tested and proven 
technologies that are commercially achievable. It would also 
provide that Congress set the effective date for any 
regulations that EPA develops relating to existing power 
plants.
    I would like to thank my good friend Senator Manchin for 
appearing before us today and for working with me on this 
commonsense alternative. Make no mistake--EPA's proposed GHG 
New Source Performance Standards would effectively ban new 
coal-fired generation. It would essentially require carbon 
capture and storage technologies, which are nowhere close to 
being commercially viable. Even Charles McConnell, former 
Assistant Secretary for Fossil Energy in the Obama 
administration, recently testified before Congress that it is 
``disingenuous'' to say that CCS is ready.
    And while EPA moves to finalize a rule that would spell the 
end of new coal-fired generation, it has also pledged to 
finalize regulations that go after existing sources--a one-two 
punch to eliminate coal as a source of electricity.
    Now, I might add that some still claim that there is no 
direct attack on coal or fossil fuels in general. They argue 
that coal-fired power plant shutdowns are occurring simply 
because natural gas is cheaper, and that coal is a victim of 
nothing more than market forces. But if that was truly the 
case, one wonders why the Obama EPA feels the need to keep 
issuing rules that are nowhere close to being achievable by 
coalfired power plants. In reality, while the increase in 
domestic natural gas production is in itself good news for our 
economy, this nation still needs a diversity of supply that 
also comes from coal and nuclear as well as renewable sources 
of electricity. The generation mix varies greatly across the 
country based on what makes sense locally, including my part of 
the country in Kentucky which relies heavily on coal.
    America has the world's largest coal resources, and EPA's 
pending regulations to phase out or eliminate the use of coal 
for both new and existing power plants poses extreme risks for 
jobs, energy reliability, and energy security. And these 
regulations threaten to drive up electric bills in coal-reliant 
states and restrict access to energy for many Americans. We 
should be pursuing energy policies that will lead to more 
energy that is less expensive for people, rather than less 
energy that is more expensive for people. And this decision 
should be left with the American people, not with EPA to 
decide.
    Further, many of our largest industrial competitors, 
including China, have been rapidly adding coal to their 
generation portfolio, and for good reason given its low cost 
and reliable performance. And none of these nations are 
imposing on themselves anything like EPA's anti-coal agenda. 
The global economy is sending us a clear message--the more we 
handicap American coal, the more we handicap American 
competitiveness.
    Prior to the Obama administration, the EPA and states had a 
decades-long history of regulating coal in ways that reduced 
emissions without abandoning this vital energy source. And I 
believe that Sen. Manchin and I have tapped into that tradition 
of realistic and achievable regulation with our draft 
legislation. Our bipartisan and bicameral proposal is the 
commonsense way to ensure that any greenhouse gas regulations 
for power plants going forward are achievable.
    I would conclude by noting that this hearing is about what 
energy policy makes sense for the American people. We need to 
keep the lights on and the bills low while creating badly 
needed jobs. And it won't happen without coal.

                                #  #  #

    Mr. Whitfield. At this time I would like to recognize the 
gentleman from California, Mr. McNerney, for his 5 minute 
opening statement.

 OPENING STATEMENT OF HON. JERRY MCNERNEY, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. McNerney. Thank you, Mr. Chairman. It is a little 
chilly in here this morning, so maybe we should turn on the 
coal-fired power plants and get things warmed up.
    You know, I am glad we are having this hearing, but I want 
to make clear that this hearing is about climate change. The 
legislation focuses on the Whitfield bill. The draft 
legislation would block EPA's ability to issue standards to 
limit carbon pollution from new and existing coal-fired power 
plants. It effectively rolls back EPA's authority under the 
Clean Air Act. The legislation nullifies EPA's proposed carbon 
standards for new power plants and prohibits future standards 
from being implemented unless at least six units at different 
locations have met that standard for 12 continuous months. It 
is not clear why utilities would deploy any carbon pollution 
control technology in the absence of a requirement to do so. As 
a result, the bill's requirements appear to be insurmountable. 
In addition, the bill would require Congress to pass new 
legislation before the EPA could limit carbon pollution from 
existing power plants.
    Greenhouse gases pose a significant threat to our economy, 
to our public health, and to the environment. We have heard 
time and again from the world's leading scientists that 
greenhouse gases have negative consequences, and are causing 
global warming. I share the view of many of my colleagues, that 
we need a comprehensive approach to our nation's energy needs. 
Coal can continue to play an important role, but we must 
address carbon emissions.
    California still relies on coal powered plants for some of 
its energy needs. However, California has been a national 
leader in clean energy generation, and in reducing greenhouse 
gases. A Republican governor established short and long term 
greenhouse gas emission reduction targets for California, to 
reduce carbon emissions to 1990 levels by 2020, and 80 percent 
below 1990 levels by 2050. The State's carbon emissions have 
declined for 3 straight years.
    The development of carbon capture and storage technologies 
is essential to the future of coal. The International Energy 
Agency expects carbon capture and storage to rank third among 
ways to reduce carbon emissions by 2050, behind energy 
efficiency, and the use of renewable sources, and ahead of 
nuclear power. As far back as 2009, industry stakeholders were 
talking about the benefits of carbon capture and sequestration. 
Although work remains to be done on carbon capture and 
sequestration, I believe that the current technological 
capacity exists to effectively deploy CCS technology on power 
plants. Taking away incentives for implementation of carbon 
capture and sequestration will stunt the progress that has been 
made in this industry to this point. We saw a similar scenario 
play out in the wind industry back in the 1990s, that I was 
involved in. The United States was building new technology, and 
was leading the charge, but proper support went away, and so 
did the jobs and the technology. I saw those jobs leave this 
country. That set our industry back for years.
    As I said at the beginning of my opening statement, this 
hearing is about climate change. Either we believe that climate 
change is happening, and is caused by human activities, or we 
don't. If we do believe that climate change is happening, this 
bill is exactly the wrong way to go.
    I want to thank the witnesses for their time, and I look 
forward to their testimony, and I am interested to hear how we 
can support efforts to reduce greenhouse gases, while boosting 
energy independence, and protecting public health.
    Thank you, Mr. Chairman. I yield back.
    Mr. Whitfield. Thank you, Mr. McNerney. At this time 
recognize the gentleman from Michigan, Mr. Upton, for 5 
minutes.

   OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Upton. Well, thank you, Mr. Chairman.
    You know, nearly everyone claims to support an all-of-the-
above energy strategy, everybody. And, in my view, all-of-the-
above allows every viable energy resource to compete. It 
doesn't take certain options off the table by setting 
unachievable Federal regs. Unfortunately, it is the latter that 
has been on display by the EPA. EPA's proposed greenhouse gas 
rule for new power plants is the latest effort by this 
administration to eliminate the use of coal. The President's 
energy strategy is the exact opposite of an all of the above 
approach, and would limit our energy choices, jeopardize jobs, 
raise energy costs, and threaten America's global 
competitiveness.
    An open all-of-the-above energy strategy is important 
because diversity of energy is critical to providing affordable 
and reliable electricity to U.S. homes and businesses. The 
nation has, for decades, benefitted from a variety of sources 
of electricity. The idea that electricity from coal is no 
longer needed because we have more natural gas is misguided. 
And, while our Nation has become the envy of the world because 
of recent breakthroughs unlocking vast amounts of oil and 
natural gas, it never makes sense to regulate an entire fuel 
category out of the mix. It makes even less sense when the 
resource makes up 40 percent of the fuel used for electricity 
domestically, while at the same time other nations, from 
Germany to China, are continuing to build new state-of-the-art 
coal facilities.
    Given that the U.S. has the largest coal reserves, and is 
the largest producer of coal, it should remain a critical 
contributor to a diverse electricity portfolio for decades to 
come. Fuel diversity not only gives us the flexibility we need 
to keep electricity costs low, it also helps ensure 
reliability. As we have heard from many witnesses in previous 
hearings, the coal-fired power plant shutdowns already underway 
pose a serious threat to reliability in many regions, 
particularly in the Midwest. That threat will continue to get 
worse if these shutdowns increase in the years ahead while we 
limit our options for new base load power.
    In sum, fuel diversity gives us a more stable, reliable, 
affordable electricity supply, and any threat to coal, 
including the EPA's proposed rule, is a threat to that 
diversity. I want to applaud both Chairman Whitfield and 
Senator Manchin from West Virginia for their efforts in 
authoring a workable bipartisan, and bicameral, alternative to 
EPA's proposed rule. Their proposal is a good faith effort that 
requires a critical check on EPA's misuse of the Clean Air Act 
to try and accomplish through regulation what was rejected in 
Congress through legislation. Their approach does not prohibit 
the EPA for setting the standard for new sources, but instead 
focuses on setting standards that have been adequately 
demonstrated at geographically diverse locations around the 
country, a key ingredient that is missing from EPA's regulatory 
proposal. It deserves serious consideration by this committee 
and Congress.
    And I yield back my time.
    [The prepared statement of Mr. Upton follows:]

                 Prepared statement of Hon. Fred Upton

    Nearly everyone claims to support an all-of-the-above 
energy strategy. In my view, all-of-the-above allows every 
viable energy resource to compete. It does not take certain 
options off the table by setting unachievable federal 
regulations. Unfortunately, it is the latter that has been on 
display by the Environmental Protection Agency.
    EPA's proposed greenhouse gas rule for new power plants is 
the latest effort by the Obama administration to eliminate the 
use of coal. The president's energy strategy is the exact 
opposite of an all-of-the-above approach and would limit our 
energy choices, jeopardize jobs, raise energy costs, and 
threaten America's global competitiveness.
    An open, all-of-the-above energy strategy is important 
because diversity of energy is critical to providing affordable 
and reliable electricity to U.S. homes and businesses. The 
nation has for decades benefitted from a variety of sources of 
electricity.
    The idea that electricity from coal is no longer needed 
because we have more natural gas is misguided. While our nation 
has become the envy of the world because of recent 
breakthroughs unlocking vast amounts of oil and natural gas, it 
never makes sense to regulate an entire fuel category out of 
the mix. It makes even less sense when that resource makes up 
40 percent of the fuel used for electricity domestically while 
at the same time other nations, from Germany to China, are 
continuing to build new state-of-the-art coal facilities.
    Given that the United States has the world's largest coal 
reserves and is the largest producer of coal, it should remain 
a critical contributor to a diverse electricity portfolio for 
decades to come.
    Fuel diversity not only gives us the flexibility to keep 
electricity costs low, but it also helps ensure reliability. As 
we have heard from many witnesses in previous hearings, the 
coal-fired power plant shutdowns already underway pose a 
serious threat to reliability in many regions, particularly the 
Midwest. That threat will continue to get worse if these 
shutdowns increase in the years ahead while we limit our 
options for new base load power.
    In sum, fuel diversity gives us a more stable, reliable, 
and affordable electricity supply. And any threat to coal, 
including EPA's proposed rule, is a threat to that diversity.
    I would like to applaud both Chairman Whitfield and Senator 
Manchin for their efforts in authoring a workable bipartisan 
and bicameral alternative to EPA's proposed rule. Their 
proposal is a good faith effort that requires a critical check 
on EPA's misuse of the Clean Air Act to try to accomplish 
through regulation what was rejected in Congress through 
legislation. Their approach does not prohibit the EPA from 
setting a standard for new sources, but focuses on setting 
standards that have been adequately demonstrated at 
geographically diverse locations around the country, a key 
ingredient missing from EPA's regulatory proposal. It deserves 
serious consideration by this committee and Congress as a 
whole.

                                #  #  #

    Mr. Whitfield. Thank you, Mr. Upton. At this time I 
recognize the distinguished gentleman from California, Mr. 
Waxman, for 5 minutes.

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Waxman. Thank you very much, Mr. Chairman.
    The warning signs of climate change are happening all 
around us, but House Republicans are averting their eyes, 
denying the science, and jeopardizing the future of our 
children and grandchildren. Not only is this committee refusing 
to act, we are considering legislation to stop the 
administration from acting under existing law. The bill before 
us is a recipe for climate disaster.
    Last week, the World Meteorological Association reported 
that the levels of heat trapping gases in the atmosphere set 
new records. The levels are now higher than at any time in the 
last 800,000 years. Direct measurements and basic physics tell 
us that carbon pollution is warming the planet.
    Now, my Republican colleagues deny this scientific reality. 
I wish they would open their eyes and escape their 
congressional bubble. In my state, firefighters know that 
wildfires are getting bigger and more dangerous as heat and 
drought become more common. Across the West, foresters are 
grappling with dying forests, killed by bark beetles that 
thrive in warmer temperatures. Farmers know the weather better 
than anyone else, and they say it is different now. Coastal 
communities confront ever-rising sea levels, putting them at 
risk from extreme storms and ever higher storm surges. And just 
last week a super typhoon, perhaps the strongest ever recorded, 
demolished entire cities in the Philippines. Extreme weather, 
sea level rises, heat waves, droughts, floods, wildfires, 
pests. This is what climate change looks like.
    So what is this committee doing today? Denying, 
obstructing, and weakening the Clean Air Act. We will hear 
charges today that the administration is waging a war on coal. 
We will hear claims that EPA's rules will block all new coal-
fired power plants. We will be told that we must pass 
legislation to effectively repeal EPA's existing authority to 
address carbon pollution from power plants under the Clean Air 
Act. And we will be told this is a reasonable middle ground.
    But we will hear no recognition of the dangers from climate 
change, much less any suggestions for dealing with it. EPA's 
approach is actually very reasonable. For existing coal-fired 
power plants, EPA is starting by listening to stakeholders. EPA 
hasn't yet issued a proposal. For new coal-fired plants, EPA 
proposes to require partial use of carbon controls that are 
technically feasible, have been used in other industrial 
applications for years, and have been demonstrated on existing 
power plants. Several full scale commercial applications of 
carbon capture at coal-fired power plants are currently under 
construction.
    Of course, these controls are more expensive than dumping 
carbon pollution into the air. That is why industry will never 
deploy them without government incentives or requirements.
    If this committee is truly concerned about the future of 
coal, it should be doing everything possible to advance the 
carbon capture technologies. That is the path to continued use 
of coal in a carbon constrained world.
    That is exactly what Democrats tried to do. In 2009 the 
Waxman-Markey bill gave utilities certainty about carbon 
regulation. It gave utilities with more coal generation extra 
allowances to help defray their costs. And it provided $60 
billion, $60 billion, to deploy carbon capture technology. That 
bill provided a future for coal. We worked with Representative 
Boucher, the coal miners, the utility industry, to make sure of 
that.
    But House Republicans said no.
    In the Recovery Act, President Obama provided $3.4 billion 
for carbon capture and storage technology. But House 
Republicans said no.
    So I ask my Republican colleagues, if you don't like 
President Obama's approach, if you don't like congressional 
Democrats' approach, what is your plan for dealing with climate 
change? Just saying no, pretending it doesn't exist, is just a 
recipe for climate disaster.
    Yield back my time.
    Mr. Whitfield. Thank you, Mr. Waxman, and that completes 
the opening statements. And we have this morning three panels 
of witnesses, and on the first panel we are delighted to 
welcome Senator Joe Manchin of the great State of West 
Virginia, and he will be our first witness. Senator Manchin is 
on the Energy and Natural Resources Committee, and he is also 
chairman of the Public Lands, Forest, and Mining Subcomittee. 
And I know you are on a lot of other committees as well, 
Senator, but we welcome you, and thank you for taking time to 
join us this morning.
    And I will say that when Senator Manchin finishes his 
statement, he has got to get over to a confirmation hearing, so 
I know that you all will be disappointed you can't ask him any 
questions.
    But, Senator Manchin, you are recognized for 5 minutes.

STATEMENT OF HON. JOE MANCHIN, A UNITED STATES SENATOR FROM THE 
                     STATE OF WEST VIRGINIA

    Senator Manchin. Thank you for inviting me, and having me 
be part of this. My colleague from West Virginia, Congressman 
McKinley, good to be with you. And I want to, first of all, say 
that I do believe that seven billion people on Mother Earth has 
had an impact on the environment. We have a responsibility. We 
also have seven billion people that would like to eat and 
provide for themselves, and their families, so we have got to 
find that balance.
    The EPA regulation of greenhouse gas emissions from both 
new and existing power plants are what we are talking about in 
this legislation that we proposed. Our legislation would 
protect Americans' access to reliable and affordable 
electricity now, and for decades to come, finding that balance 
we talk about. We need a diverse energy portfolio, which, I 
think, Mr. Upton, you have talked about, and we sure do need 
that, a true all of the above mix of natural gas, nuclear, 
renewables, oil, and coal. Unfortunately, the Environmental 
Protection Agency has chosen a regulatory path devoid of common 
sense that will take us way off course from a future of 
abundant, affordable clean energy. Our legislation tries to get 
the EPA back on track, but in a way that does nothing to 
prevent the EPA from acting in a reasonable and rational way.
    Mr. Chairman, EPA's proposed standards for new coal-fired 
power plants would effectively prevent any new plants from 
being constructed. Their standards require coal-fired power 
plants to deploy technologies that are not currently 
commercially viable. And though EPA has yet to formally propose 
new standards for existing power plants, there is every 
indication that these standards will be unachievable as well. 
The EPA is holding the coal industry to impossible standards. 
And, for the first time ever, the Federal Government is trying 
to force an industry to do something that is technologically 
impossible to achieve, at least for now. The industry is making 
steady progress, but is still a ways off from developing the 
carbon capture and storage technologies that the EPA claims are 
commercially viable. We don't have a commercially viable plant 
right now.
    Right now coal provides 37 percent of all electricity 
generated in the United States, and the Department of Energy 
projects coal will provide at least that much through 2040. 
Right now we simply can't make up the difference with 
renewables. That is just wishful thinking. So if we just stand 
by and do nothing, and let the EPA eliminate coal from the 
energy mix, we are going to see stability of our electrical 
grid threatened, and see the price of electricity rise 
dramatically, jeopardizing America's economy and countless 
jobs, with no real environmental benefit, but we are just 
standing by.
    Our bipartisan, bicameral legislation is part of a national 
discussion about our energy future and the proper role of 
regulatory bodies like the EPA. Our legislation ensures that 
EPA will no longer be able to impose unachievable standards on 
coal-fired power plants. It is just common sense that 
regulations are based on what is technologically possible at 
the time they are proposed. With regulations, if they aren't 
feasible, they aren't reasonable.
    For new plants, our legislation will require that any EPA 
regulation must be categorized by fuel type, coal, or gas. The 
EPA can only impose a standard if that standard has been 
achieved for 12 consecutive months at six different U.S. 
electricity generating plants, operating on a full commercial 
basis. For existing plants, any EPA proposed rule will not take 
effect until Federal law is enacted specifying the rule's 
effective date, and EPA must report to Congress on the economic 
impact of the rule.
    Mr. Chairman, it is time we strike a balance between 
healthy environment and a healthy economy. That is all we have 
asked for, is a balance, and that is what our legislation does. 
Abundant, reliable, affordable energy made this country the 
economic leader of the world. We all wouldn't enjoy the life we 
have today if it had not been for the coal, when produced by 
the hardworking people of this country. And that is the same 
formula that will keep us up at the front. It is time the EPA 
started working as our partner, not as our adversary, to 
achieve that balance. And the EPA can start by recognizing it 
is just common sense that regulations should be based on what 
is technologically possible at the time they are proposed. That 
is all we have asked for.
    Again I want to thank you, Mr. Chairman, and all the 
members of the committee here for allowing me to come before 
you, and thank you for the opportunity to work with you on this 
very important piece of legislation.
    [The prepared statement of Senator Manchin follows:]
    
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    Mr. Whitfield. Well, Senator Manchin, thank you so much for 
your testimony. I know all of us look forward to working with 
you as we move forward, and we appreciate very much your taking 
time to come over and visit us on the House side.
    Senator Manchin. Well, it is good to be with you.
    Mr. Whitfield. Thank you so much.
    Senator Manchin. Thank you.
    Mr. Dingell. Mr. Chairman, I would just like to say welcome 
to Senator Manchin. Welcome.
    Senator Manchin. Thank you, my friend.
    Mr. Dingell. I am delighted to see you in the committee 
this morning.
    Senator Manchin. Thank you, Mr.----
    Mr. Dingell. Thank you, sir.
    Senator Manchin. Thank you, Mr. Dingell. You are my friend, 
I appreciate it. Thank you.
    Mr. Whitfield. Thank you, Mr. Dingell.
    At this time I would like to call our second panel, and our 
second panel consists of one person, and that is the Honorable 
Janet McCabe, who is the Acting Assistant Administrator for Air 
and Radiation at the Environmental Protection Agency. And I 
just discovered, in talking to her before the hearing, that she 
has a travel schedule like many of us do. She lives in Indiana 
and travels back and forth to Washington. So, Ms. McCabe, thank 
you very much for joining us today to talk about the proposed 
greenhouse gas regulation, and maybe the discussion draft, and 
you are recognized for 5 minutes for an opening statement.

STATEMENT OF HON. JANET MCCABE, ACTING ASSISTANT ADMINISTRATOR 
  FOR AIR AND RADIATION, U.S. ENVIRONMENTAL PROTECTION AGENCY

    Ms. McCabe. Well, thank you, Mr. Chairman, and members of 
the subcommittee. Thank you for the opportunity to testify 
today on EPA's recently issued proposed carbon pollution 
standards for new power plants and the related discussion draft 
under consideration in the committee.
    Responding to climate change is an imperative----
    Mr. Whitfield. Is your microphone on, Ms. McCabe?
    Ms. McCabe. The green light is on.
    Responding to climate change is an imperative that presents 
both an economic challenge and an economic opportunity. As 
President Obama and Administrator McCarthy have underscored, 
both the economy and the environment must provide for current 
and future generations. We can and must embrace cutting carbon 
pollution as a spark for business innovation, job creation, 
clean energy, and broad economic growth.
    In June President Obama issued a national climate action 
plan, which directs EPA and other Federal agencies to take 
steps to mitigate the current and future damage caused by 
greenhouse gas emissions, and to prepare for the climate 
changes that have already been set in motion. A key element of 
the plan is addressing carbon pollution from new and existing 
power plants. Power plants are the single largest source of 
carbon pollution in the U.S., accounting for about \1/3\ of 
U.S. emissions. In March 2012, EPA first proposed carbon 
pollution standards for future power plants, and after 
receiving 2.7 million comments, we determined to issue a new 
proposed rule based on this input and updated information.
    In September EPA announced its new proposal. The proposed 
standards would establish the first uniform national limits on 
carbon pollution from future power plants. They will not apply 
to existing power plants. The proposal sets separate national 
limits for new natural gas fired turbines, and new coal-fired 
units. The standards reflect the demonstrated performance of 
efficient lower carbon technologies that are currently being 
constructed today. They set the stage for continued public and 
private investment in technologies, like efficient natural gas, 
and carbon capture and storage. The proposal is currently 
available to the public, and the formal comment period will 
begin when the rule is published in the Federal Register. We 
look forward to robust engagement on the proposal, and will 
carefully consider the comments and input we receive as a final 
rule is developed.
    For existing plants, we are engaged in outreach now to a 
broad group of stakeholders who can inform the development of 
proposed guidelines, which we expect to issue in June of 2014. 
These guidelines will provide guidance to states, which have 
the primary role in developing and implementing plans to 
address carbon pollution from the existing plants in their 
states.
    In addition to the proposed carbon pollution standards, I 
have been asked to provide testimony on the discussion draft 
that has been put forward by Chairman Whitfield and Senator 
Manchin. Although the administration does not currently have a 
position on the draft, I will offer a few points that I hope 
will assist the committee in its deliberations. The draft bill 
would delay action and regulatory certainty for future power 
plants by repealing the pending proposed carbon pollution 
standards. Further, it would indefinitely delay progress in 
reducing carbon pollution by discouraging the adoption of 
innovative technology that is available and effective today, 
and would limit future development of cutting edge 
technologies. The draft bill could also prevent timely action 
on the largest source of carbon pollution in the country, the 
power sector, by prohibiting EPA rules from taking effect until 
Congress passes legislation setting the effective date of the 
rules.
    For over 40 years State and Federal regulators have worked 
with stakeholders under the Clean Air Act to substantially 
reduce pollution through the development of cutting edge 
technologies. Addressing carbon pollution under the Clean Air 
Act will not be any different.
    Thank you again for the opportunity to testify on this 
important subject, and I look forward to answering your 
questions.
    [The prepared statement of Ms. McCabe follows:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Whitfield. Well, Ms. McCabe, thanks very much for being 
here, as I said, and thanks for your testimony. We will now 
have questions for you, and I will recognize myself for 5 
minutes for the first questions.
    First of all, this legal term, adequately demonstrated, 
what is your definition of adequately demonstrated?
    Ms. McCabe. Well, thank you for the question, Mr. Chairman. 
The EPA, in developing new source performance standards, which 
we have done, many, many times under the Clean Air Act, does a 
broad review of what technologies are available, feasible, in 
use, and being developed. Indeed, that is one of the elements 
of Section 111 of the Clean Air Act, is that the new source 
performance standards, which apply to plants that are to be 
built in the future, are to encourage new cutting edge and 
innovative technology. So we look at the broad range of 
technologies that are out there. And, in this case, we looked 
at the types of technologies that were being used for the 
newest generation of clean power plants that are being built, 
clean natural gas, and----
    Mr. Whitfield. But you----
    Ms. McCabe [continuing]. Coal technology.
    Mr. Whitfield. But you think the projects that you all have 
identified would adequately demonstrate that the technology is 
available?
    Ms. McCabe. That is what our proposal lays out.
    Mr. Whitfield. Now, even though my recollection is the 
Federal Government provided about $1.4 billion for those three 
projects, that are all in enhanced oil recovery areas, and 
there are all cost overruns on them, and none of them are 
completed. So how can you issue a regulation that would 
dramatically change the possibility of even building a plant on 
such speculative processes?
    Ms. McCabe. Well, with respect, I wouldn't refer to these 
as speculative technologies. Carbon capture and sequestration 
has been used in industrial applications for many years.
    Mr. Whitfield. But is it commercially available?
    Ms. McCabe. It is commercially available----
    Mr. Whitfield. Where.
    Ms. McCabe [continuing]. And there are?
    Mr. Whitfield. Where is the project, then?
    Ms. McCabe. There are four projects underway. Two of them 
are significantly----
    Mr. Whitfield. Have they been completed?
    Ms. McCabe. They are very close to completion, \3/4\ of the 
way----
    Mr. Whitfield. Do you know when they will be completed?
    Ms. McCabe. My understanding is that the two that are under 
construction now are expected to begin operation in 2014.
    Mr. Whitfield. And where are they located?
    Ms. McCabe. There is the Kemper plant----
    Mr. Whitfield. And all of them have government money 
involved in them. Well, we just have some fundamental 
disagreements on this, and that is why we have hearings. And 
let me ask you this question. I read repeatedly that the carbon 
dioxide emissions in America are the lowest that they have been 
in 20 years, which I think speaks well of the Clean Air Act, 
speaks well of the efforts that you all are making.
    But, America, we don't have to take a back seat to any 
country in the world on the great progress that we have made in 
cleaning up the environment. So if you were at a Rotary Club, 
and someone, like, asked me the question the other day, why is 
it that in America, with the great success that we have had, 
and the lowest emissions in 20 years, why are we unilaterally 
saying to ourself that you can't build a new coal plant in 
America?
    Ms. McCabe. Well, we are not saying you can't build a new 
coal plant in America. We are, in fact, providing a path----
    Mr. Whitfield. Well, look, let me just say, natural gas 
prices are very low, so no one is interested in building a 
plant right now. But if they wanted to, people tell us they 
would not do it because they cannot meet these requirements. 
And that is one of the fundamental differences that we have. 
Just like I mentioned, in Europe, they are closing down 30 
gigawatts of natural gas, and they are going to coal. Why 
should we remove that option here in America? We have a 250 
year reserve of coal. It doesn't mean that they are going to be 
built immediately, but if the circumstances change, why 
shouldn't we be able to do that? Right now we would not be able 
to do it.
    Ms. McCabe. We agree absolutely that there needs to be a 
clear path for coal. Coal is the largest source of energy in 
the country now. We expect it to continue to be. There are four 
projects underway that are going forward that would use this 
technology. So coal plants are moving forward.
    Mr. Whitfield. Have you ever had meetings with the 
President? I mean, have you ever heard him discuss when he made 
that comment how I'll bankrupt the coal industry--have you ever 
had a discussion with him about that?
    Ms. McCabe. I was not in discussions----
    Mr. Whitfield. OK.
    Ms. McCabe [continuing]. With the President about that.
    Mr. Whitfield. You know, I will make one other comment. In 
1965 coal, worldwide, provided 93 percent of the electricity. 
2013, coal provides 87 percent of the worldwide electricity. So 
it is quite obvious that, while renewables are important, the 
base load is going to have to be fossil fuels. Well, thank you 
very much, Ms. McCabe. I look forward to continuing our 
discussion and working with you on these issues.
    At this time I recognize the gentleman from California, Mr. 
McNerney.
    Mr. McNerney. Thank you, Mr. Chairman.
    Ms. McCabe, are there any coal-fired power plants in the 
U.S. that don't receive any sort of government money?
    Ms. McCabe. Any coal plants in the country that don't 
receive any federal----
    Mr. McNerney. Any----
    Ms. McCabe [continuing]. Money?
    Mr. McNerney [continuing]. Kind of government money at all. 
Are there any in the country?
    Ms. McCabe. I don't know that I know the answer to that 
question. There are some coal plants that are receiving 
government money, but I can't speak for every coal plant in the 
country.
    Mr. McNerney. Well, I would say that it is virtually 
impossible, given what the legislation proposes, for coal-fired 
power plants to use CCS equipment that aren't receiving some 
sort of government subsidy, so I think the bill makes it 
impossible for EPA to require that in the future.
    Ms. McCabe. What I will say is that the history has been 
that, as new technologies are developed, they often receive 
government subsidies, and that is an important role the 
government can play in encouraging research and development of 
new technologies that then become part of the mainstream.
    Mr. McNerney. Well, thank you. The coal industry, and 
critics of the EPA's efforts to control carbon pollution from 
power plants are saying that carbon capture and storage 
technology is not feasible. We keep hearing that it isn't 
ready, and won't be for years, but that is contrary to the 
evidence. The coal industry was saying something very different 
just four years ago, back in 2009. When the House passed an 
energy bill that would have set limits on carbon pollution and 
requiring CCS, the coal industry was running ads about how CCS 
was the future of coal. Let me show you an example. Here is a 
2010 television ad from the Consol Energy, one of the biggest 
coal companies in the country.
    [Video shown.]
    Mr. McNerney. In light of that ad, what do you think the 
outlet for carbon capture and sequestration storage technology 
is?
    Ms. McCabe. Based on the information that we reviewed and 
have laid out in our proposal, it is clear that carbon capture 
sequestration technology is available, is feasible. It has been 
used in applications for many years. It is going forward with 
commercial scale coal plants, so we see carbon capture and 
sequestration as being a future technology that will be very 
much in use.
    Mr. McNerney. So was that ad correct in saying that the 
industry was using CCS technology four years ago?
    Ms. McCabe. There have been industry applications of CCS 
for many years.
    Mr. McNerney. Well, is carbon capture and storage 
technology going to be widely deployed in the United States in 
the absence of a requirement to use it, or other strong policy 
driver?
    Ms. McCabe. The history of development of technologies in 
the power sector, and in many other industrial sectors, with 
the new source performance standards, which put in place 
requirements based on the clean and forward looking 
technologies that this country is so good at inventing, that 
those then allow those technologies to become widespread, the 
cost to come down, and they become routine examples and 
standard equipment in the future.
    Mr. McNerney. What is your response to the argument that we 
should just wait for years, or even decades, before limiting 
the amount of carbon pollution that power plants can emit?
    Ms. McCabe. Well, as has already been stated by members of 
the committee, including yourself, climate change is a serious 
health threat to the citizens of this country, and, in fact, 
the world. And to delay the steps that we can take reasonably 
now would increase the likelihood of significant health 
impacts, and would be failing to do what we can do now to 
reduce carbon emissions.
    Mr. McNerney. Well, thank you. If coal is going to have a 
long term future, carbon pollution from those plants must be 
reduced significantly, and carbon sequestration and storage is 
the only technology we have that can do that, is that right?
    Ms. McCabe. Well, that is the key technology for coal-fired 
power plants at this time, is carbon capture and sequestration.
    Mr. McNerney. OK. Thank you, Mr. Chairman. I yield.
    Mr. Whitfield. Thank you. At this time recognize the 
gentleman from Louisiana, Mr. Scalise, for 5 minutes.
    Mr. Scalise. Thank you, Mr. Chairman. I appreciate you 
having this hearing, and I appreciate Senator Manchin being 
here earlier, as well as you, Ms. McCabe, coming here to 
testify. I think it is very clear that the Obama administration 
has a war on coal, and I think their objectives have been 
stated over the years, in terms of what they are trying to 
achieve, and I think that is unachievable goals that are 
designed to ultimately bankrupt the coal industry. We are 
seeing it across so many states with job losses, but also with 
increased energy costs. And, you know, when you talk about the 
impact on low income families, these high energy costs hit low 
income families the hardest.
    And so, when the administration puts these policies in 
place, they are having real consequences negatively not only on 
our economy, but on families. So when we bring legislation like 
this in a bipartisan way, and, again, I commend the Chairman 
for bringing this bill, but also the Senator as well, because 
it shows that there is bipartisan interest in ending this war 
on coal and getting back to an economy that can function using 
all of the available tools that we have, including coal, that 
is very low cost and very effective.
    So when Senator Manchin says that, under our bill, EPA will 
no longer be able to impose unachievable standards, is there 
something about that that you disagree with? I mean, do you 
think you all should be able to impose the unachievable 
standards you have been imposing so far?
    Ms. McCabe. The standards that we have proposed, and that 
are out for public comment now, are achievable. They are based 
on technologies that are available and feasible, based on 
experience in the real world, and----
    Mr. Scalise. I don't necessarily think they are in the real 
world. You mentioned four examples you said that you all point 
to----
    Ms. McCabe. Yes.
    Mr. Scalise [continuing]. In terms of coal-fired power 
plants that are adequately demonstrated. What are those four 
examples?
    Ms. McCabe. The first is the Kemper plant, which is in 
Mississippi. It is about 75 percent complete. It is an IGCC 
plant.
    Mr. Scalise. I am familiar with that. We have had them 
testify. What are the other three, if you can run through those 
real quickly.
    Ms. McCabe. There is the Boundary Dam project in 
Saskatchewan. That is a 110 megawatt plant, pulverized coal 
plant. It is 75 percent complete. It is designed to capture 90 
percent.
    Mr. Scalise. All right. Next one?
    Ms. McCabe. The next one is the HECA plant in California, 
which is also designed to capture 90 percent. That is an IGCC 
plant as well. And the Texas Clean Energy Project, a 400 
megawatt plant, also designed to capture 90 percent of the 
carbon.
    Mr. Scalise. Well, first let me start with the Kemper 
plant. You use the Kemper plant as one of your poster children 
for how CCS works so well. It is adequately demonstrated. We 
had the Kemper folks come and testify. Let me read you some of 
the statements. Because when you all introduced and announced 
your new coal-fired power plant rules, the Southern Company, 
making that plant, said, ``Because the unique characteristics 
that make the project the right choice for Mississippi cannot 
be consistently replicated on a national level, the Kemper 
County energy facility should not serve as a primary basis for 
new emissions standards impacting all new coal-fired plants.'' 
The people building the plant are saying it is creating a lot 
of problems for them to build it this way, but it is saying it 
surely should not be used as some kind of national model. And 
yet you are sitting here saying you are using at as a national 
model, but the people building it are saying it shouldn't be 
used as a national model. First of all, are you aware that they 
have said that?
    Ms. McCabe. Yes, I am.
    Mr. Scalise. Well, then why are you still using it as a 
national model?
    Ms. McCabe. Well, with respect, Congressman, there are 
three other plants that are----
    Mr. Scalise. Well, this was the first one you listed, so I 
am going to start with this one. Kemper said, the other three I 
don't think have testified. Kemper has testified, and their 
testimony was they shouldn't be used as a national standard, 
and yet you are sitting here, using it as a national standard, 
and you know that they said they shouldn't be used as a 
standard. So why are you still using it?
    Ms. McCabe. Well----
    Mr. Scalise. Scratch them off your list.
    Ms. McCabe [continuing]. We don't base our rules on the 
thoughts and comments of one company. We----
    Mr. Scalise. Well, that was the first one you mentioned----
    Ms. McCabe. Yes.
    Mr. Scalise [continuing]. And you said you are using real 
world examples. And the first real world example that you used, 
they have testified, saying that they shouldn't even be used as 
a standard. So you are not living in the real world. You are 
using an example where the people that you are citing have said 
they shouldn't be used as a national example because that 
doesn't replicate itself nationally. You should be talking 
about things that can actually be replicated in the real world 
for these standards to exist.
    Let me ask you this, because I know the Chairman brought 
this up. You know, we have all heard the statement. I don't 
know if you have or not. The President, President Obama said, 
``So if somebody wants to build a coal powered plant, they can. 
It is just that it will bankrupt them.'' Do you agree with the 
President's statement that he made, that they can build a 
plant, but it will bankrupt them if they build it? Do you agree 
with that?
    Ms. McCabe. The----
    Mr. Scalise. And is that what you all are trying to achieve 
with these rules?
    Ms. McCabe. No. The Clean Air----
    Mr. Scalise. No?
    Ms. McCabe [continuing]. Act, over its history, has 
regulated the power sector, including coal-fired power plants, 
and claims that it would shut the lights off and skyrocket 
power prices have been made before, and have been demonstrated 
time and again not to be true.
    Mr. Scalise. So the President's claim is not true? Because 
the President made that claim. Yield back----
    Mr. Whitfield. Gentleman's time has expired. At this time I 
recognize the gentleman from Michigan, Mr. Dingell, for 5 
minutes.
    Mr. Dingell. Mr. Chairman, I thank you for that, and I 
commend you for this hearing. I want to make it clear that I 
agree with my colleague, Mr. Whitfield, that we should do 
something to provide clarity on how to regulate greenhouse gas 
emissions. However, the bill before us creates a peculiar and 
entirely new process for regulations under the Clean Air Act. I 
am afraid that this bill will take a long established and 
reasonable effective regulatory process, turn it upside down, 
to the great detriment to all of those in the industry, and who 
are seeking certainty.
    Some questions for you, Ms. McCabe. First, I would like to 
have you answer a question I asked Administrator McCarthy and 
Secretary Moniz at a recent hearing on climate change. Do you 
see a future for coal as a viable energy source in light of the 
impending greenhouse regulations? Please answer yes or no.
    Ms. McCabe. Yes.
    Mr. Dingell. Now, this bill requires that no EPA rule 
applicable to existing coal-fired power plants may become 
effective unless and until the Congress acts to adopt a new 
law. Are you aware of any precedent for such provision in the 
Clean Air Act? Answer yes or no, if you would please?
    Ms. McCabe. No.
    Mr. Dingell. Now, the traditional approach is that Congress 
passes a law that directs a Federal agency to issue a 
regulation, meeting specific criteria. Congress retains its 
control over the result by exercising good old fashioned 
oversight. If we do not approve of the results, and the agency 
is unresponsive to Congress's vigorous exercise of its proper 
oversight authority, Congress may then pass a new law to 
provide further direction to the agency. This bill would, as a 
practical matter, eliminate the delegation of rulemaking 
authority to EPA, and set Congress up as a regulatory agency.
    Now, Ms. McCabe, by the way, do you agree with that 
statement, that the bill would, as a practical matter, 
eliminate delegation, rulemaking authority to the EPA?
    Ms. McCabe. Yes.
    Mr. Dingell. Now, Ms. McCabe, in your view, would the 
approach in this bill be effective and workable for regulating 
carbon pollution from power plants, yes or no?
    Ms. McCabe. No.
    Mr. Dingell. Now, I tend to agree with you, since this bill 
proposes to change how EPA regulates greenhouse gas emissions, 
without amending the Clean Air Act itself. It seems that the 
only ideas in this subcommittee of-- brought up before us is to 
block and indefinitely delay rules, and propose rules without 
providing any alternative solutions on how to address the 
problem at hand. Do you agree with that statement?
    Ms. McCabe. Yes.
    Mr. Dingell. Now, since becoming Acting Administrator, have 
you reached out to the stakeholders, including industry, and 
all different parts of the industry about components of the 
greenhouse gas rule, new and existing sources? Please----
    Ms. McCabe. Yes, we----
    Mr. Dingell [continuing]. Answer yes or no.
    Ms. McCabe. Yes, we have.
    Mr. Dingell. Would you submit for the record, not at this 
time, but just submit for the record what you have done? Now, I 
have always believed that we should build a consensus to create 
support for moving legislation forward. I once again offer to 
work with my colleagues on both sides to develop legislation 
dealing with greenhouse gas emissions that provides both 
clarity and certainty to industry and to regulators.
    Sometimes things are done in a certain way for a reason. 
Sometimes history and experience have something to teach us. I 
would urge my friends here to attend to these lessons, and what 
we have learned from them, before leaping to the conclusion 
that a simplistic change will make things better. All too often 
I find that the radical approach proposed in the Congress of 
late will do nothing, except create confusion and problems, and 
it is my fear that this bill is one of such proposals that is 
going to cause us a lot of future difficulties.
    I thank you for recognizing me, Mr. Chairman. I yield you 
back 48 seconds.
    Mr. Whitfield. Thank you so much. I wish you would yield me 
that time to respond to you. At this time I recognize the 
gentleman from Texas, Mr. Barton, for 5 minutes.
    Mr. Barton. Mr. Chairman, I would be happy to let----
    Mr. Whitfield. OK.
    Mr. Barton [continuing]. Mr. Shimkus go----
    Mr. Whitfield. Mr. Shimkus of Illinois for 5 minutes.
    Mr. Shimkus. I thank my friend, and it is very emotional, 
you know, and this is really the livelihood in a lot of our 
districts, so we have great concerns.
    First of all, I hate to correct Mr. Dingell, or at least 
continue to set the record straight, but the Clean Air Act that 
he was involved with in the legislation, there were amendments 
offered to make sure that carbon dioxide was not considered a 
criteria pollutant. And it was only through a court case, and 
litigation, and then, I would argue, a failed endangerment 
finding by the EPA that we are even in this mess. So the 
process how we got here is not as clear as the Chairman 
Emeritus tends to portray in how legislation and regulation 
occurs.
    The second point, to my friend in California, we do have 
power plants that receive no government subsidies, coal-fired 
power plants. In fact, they pay local, State, Federal taxes. 
They have high wages, they have great benefits, they have 
economic development for rural America. So, if there is any 
thought that we have got coal-fired power plants that are 
getting government subsidies, it is only to try to implement a 
CCS standard, which brings me to the question.
    The four CCS power plant projects that we have been talking 
about, and also in your EPA September 20 proposal, to support 
its claim that CCS for coal plants is adequately demonstrated, 
each are being built with hundreds of millions of dollars of 
government funding. Are any commercial scale CCS power plant 
projects going forward right now in the U.S. that aren't 
receiving government funding?
    Ms. McCabe. The four that we have referred to are the four 
that are going forward.
    Mr. Shimkus. The question is, are there any commercial 
size--and that deals with the ad too, because that is not 
commercial size. Are there any commercial scale CCS power plant 
projects going forward right now in the U.S. that aren't 
receiving government funding?
    Ms. McCabe. Not that I am aware of, but the ones that are--
--
    Mr. Shimkus. No. You are correct. Does EPA believe it is 
appropriate to rely on government subsidized demonstration 
projects to show that a technology is adequately demonstrated?
    Ms. McCabe. With respect, Congressman, I would not call 
these demonstration projects. These are commercial projects 
that are going forward, as has often----
    Mr. Shimkus. OK. So the question is, do you think that if 
it is a government funded project, and then we are trying to 
see if it is commercially viable, do you think government 
subsidizing a project equates to commercially viable?
    Ms. McCabe. I do think that these plants are commercially 
viable. They intend to produce power and sell it.
    Mr. Shimkus. But commercially viable also talks about the 
cost and benefit, and the capital investment, and the risk 
assumed in the cost for selling the commodity product. So, if 
the Federal Government is subsidizing that, how in the world 
can the Federal Government, an agency that is not in a market 
system, make believe that they have the capitalistic model that 
says, with $100 million plus of government subsidies, this is 
going to be a commercially viable project? How do you do that? 
It would be more like the Department of Commerce should 
probably have an evaluation than you all on the commercial 
viability.
    Ms. McCabe. As technology is developed, government 
subsidies often help. This is not the only circumstance----
    Mr. Shimkus. Do you think that every coal-fired power plant 
will need millions of dollars of government subsidies on carbon 
capture and sequestration?
    Ms. McCabe. I do not think so.
    Mr. Shimkus. And what is the basis of that analysis?
    Ms. McCabe. Experience, and information, and analysis from 
the Department of Energy, and other agencies----
    Mr. Shimkus. The Kemper----
    Ms. McCabe [continuing]. Over time.
    Mr. Shimkus. The Kemper facility is how much millions of 
dollars over budget?
    Ms. McCabe. I don't know.
    Mr. Shimkus. It is about $2 billion over budget. And how 
long has it been delayed because of this? You see our problem? 
Two things. You are saying the technology is available. We are 
saying it is not. We are running ads on demonstration projects 
that are small scale, and we are talking about large scale 
power plants. I have got a new power plant, 1,600 megawatts. To 
be able to capture carbon and put it in long term geological 
storage on small scale, yes, we can do that in advanced oil 
recovery. We can't do it in large scale.
    And the administration is gaming the system to say that, 
because we have government subsidized power plants at millions 
of dollars, that it is commercially viable, is fraudulent, and 
it is very disappointing.
    I yield back my time.
    Mr. Whitfield. At this time recognize the gentleman from 
California, Mr. Waxman, for 5 minutes.
    Mr. Waxman. Thank you, Mr. Chairman.
    Since 1970, when President Nixon signed the Clean Air Act, 
we have had a law that had several key features that have 
helped make it one of the most successful environmental laws in 
the world.
    Science-based, health protective standards keep our eyes on 
the prize, healthy air for everyone. Cooperative federalism 
allows EPA to set the clean air goals, and then the states 
decide how best to achieve them.
    And the Clean Air Act uses regulatory standards to drive 
technological innovation in pollution controls, often called 
technology forcing standards. The Act recognizes that it 
usually costs less to dump pollution for free than to clean it 
up, so businesses generally don't control pollution absent 
regulatory requirements.
    Ms. McCabe, could you give us some examples of how Clean 
Air Act standards have driven air pollution control 
technologies?
    Ms. McCabe. Certainly, Mr. Waxman. There are a couple of 
very appropriate examples that affect the power sector 
particularly. The first is the use of scrubbers. So when the 
new source performance standards, which is the same rule we are 
talking about here, were developed to require the use of 
scrubbers, they were not in widespread use. There were only a 
couple, in fact, out there, and since that time they have now 
become mainstream standard equipment on any new power plants.
    Mr. Waxman. And those scrubbers have gotten better, haven't 
they?
    Ms. McCabe. They have gotten better. They have gotten----
    Mr. Waxman. And cheaper?
    Ms. McCabe. And they have gotten cheaper, and they have 
brought improved public health to millions of American by 
reducing SO2 substantially.
    Mr. Waxman. So we know, from decades of experience, that 
the Clean Air Act drives innovations in pollution control. As 
you mentioned, scrubbers, but I know that there are others we 
could talk about----
    Ms. McCabe. Yes.
    Mr. Waxman [continuing]. As well. It drives innovation in 
pollution controls, that then become the industry standard.
    There is something else we have learned over the past 40 
years. Almost every time EPA proposes a significant new 
requirement, industry tells us it can't be done. And I have 
been around all of these decades, and I have heard it over and 
over again. It will cost too much, it will destroy our economy, 
it will turn off the lights.
    I am not going to show you, but I am going to tell you 
about an ad that the American Electric Power System ran in 
1974, the year I was elected, opposing requirements for 
scrubbers to clean up sulfur dioxide. And it describes 
scrubbers as monstrous contraptions that clog the works and 
cause prolonged shutdowns, and would produce ``a disposal 
nightmare.'' Is that what happened?
    Ms. McCabe. Not at all.
    Mr. Waxman. The EPA proposed a requirement that we have 
these scrubbers, and you just mentioned it. They are now 
ubiquitous. They are the standard. They are cheaper, they are 
more effective. What did industry say when EPA proposed to 
require selective catalytic reduction to clean up nitrogen 
oxides, or activated carbon injection to control mercury, and 
how did those statements compare with what actually happened?
    Ms. McCabe. Those are similar examples, where there were 
widespread concerns that it was going to be very detrimental to 
the coal industry, and that has turned out not to be the case. 
In fact, industry has found cheaper and very reliable ways to 
control those pollutants.
    Mr. Waxman. So once an air pollution standard is in place, 
American industry gets to work and meets it. And along the way 
we develop more effective and less expensive pollution control 
technologies. Not only is our air cleaner, but we export tens 
of billions of dollars of pollution control equipment all over 
the world. We have seen that happen over and over again.
    But the Whitfield bill would eliminate EPA's ability to 
drive pollution control technology, rejecting an approach that 
has been successful for over 4 decades.
    If this bill had been in effect in 1971, EPA could not have 
issued standards based on scrubber technology. Only two power 
plants, as you mentioned, had operating scrubbers at the time 
the 1971 rule was finalized. And if this bill were adopted now, 
EPA likely could never set a standard based on carbon capture 
and sequestration.
    This bill is a radical rewrite of the Clean Air Act that 
would block any real reductions in carbon pollution from coal 
plants, and it ignores 40 years of experience.
    I want to point out a couple things. There aren't criteria 
pollutants spelled out in the Clean Air Act, but the Clean Air 
Act requires EPA to deal with other pollutants as well, and 
that is not just this one, carbon, but others that are already 
being regulated. And to say that there is no subsidy for a 
power plant that spews pollution, and hurts the public health, 
and causes a great deal of damage, like we are seeing with 
climate change, that is a subsidy, because they don't have to 
pay for controlling their pollution, we all have to pay, in 
more harm to the climate, more harm to the planet, and more 
harm to our environment.
    Thank you, Mr. Chairman.
    Mr. Whitfield. Thank you. At this time recognize the 
gentleman from Texas, Mr. Barton, for 5----
    Mr. Barton. Thank you, Mr. Chairman, and I don't think it 
is news to the committee, but I am a co-sponsor of your 
legislation, and I hope we will move to----
    Mr. Whitfield. Thank you very much.
    Mr. Barton [continuing]. Move towards a hearing, and 
hopefully a markup.
    We are glad to have you. We are always glad to have our 
friends from EPA. Could you tell the subcommittee, to the best 
of your knowledge, are CO2 emissions in the United 
States up or down?
    Ms. McCabe. Well, that is a relative question, Congressman. 
CO2 emissions are significant from----
    Mr. Barton. I didn't ask the significance of them. I said 
are they going up or are they going down.
    Ms. McCabe. It depends on where you start. So they have 
been----
    Mr. Barton. Well, let us start from----
    Ms. McCabe [continuing]. Going----
    Mr. Barton [continuing]. Five years ago.
    Ms. McCabe. They have been going up significantly over 
time. In the most recent years there has been a reduction in--
--
    Mr. Barton. So they are going down?
    Ms. McCabe. There has been a recent reduction, but over 
time carbon emissions----
    Mr. Barton. They are going down?
    Ms. McCabe [continuing]. Are significant.
    Mr. Barton. You know that, and I know that. Which country 
is number one right now in CO2 emissions, the United 
States, or China?
    Ms. McCabe. I believe it is China.
    Mr. Barton. You believe correctly. Could you tell me what 
the cost is per megawatt to build a new coal-fired plant under 
existing regulations, as compared to a combined cycle natural 
gas plant? Which is most cost effective right now, under 
current regulations?
    Ms. McCabe. I am sorry, I want to make sure I understand 
your question. I am comparing a----
    Mr. Barton. A state of the art----
    Ms. McCabe. Yes.
    Mr. Barton [continuing]. Natural gas fired power plant that 
is being built today, compared to a coal-fired power plant that 
could be built today under existing regulations. Which is the 
most cost effective per megawatt of output?
    Ms. McCabe. I believe, Congressman, and if I need to 
supplement, I certainly will, but, given the fuel prices today, 
the industry is building natural gas fired plants because they 
are----
    Mr. Barton. They are more cost effective?
    Ms. McCabe [continuing]. More cost effective.
    Mr. Barton. Yes. You get more output, less input, and the 
CO2 emissions are approximately half that of a coal-
fired plant. Could you tell today what the cost of construction 
of a coal-fired power plant is today? Do you know that number?
    Ms. McCabe. I don't know that number, Congressman.
    Mr. Barton. Do you know what percent of the cost of a coal-
fired power plant is directed towards emission control?
    Ms. McCabe. I don't have that number with me.
    Mr. Barton. It is approximately \2/3\. Two-thirds of the 
cost of a new coal-fired power plant is for emission control, 
i.e. it is not for efficiency, it is not for power generation. 
It is simply to control emissions as a consequence of burning 
coal.
    If we were to implement the proposed regulations, that 
would require carbon capture and sequestration, do you know 
what percentage of the total cost those emissions control would 
be?
    Ms. McCabe. I don't have that number. There----
    Mr. Barton. Would you agree with me that you are basically 
going to spend approximately three times the cost of the power 
plant itself to control the emissions, and capture and 
sequester the carbon?
    Ms. McCabe. I don't know that to be the case, Congressman.
    Mr. Barton. OK. Could you get us the numbers and provide--
--
    Ms. McCabe. Absolutely.
    Mr. Barton. I may be off, but I am not off orders of 
magnitude. I mean, I may be off a little bit, but if the 
country adopts these proposed regulations, if you want to 
build, you know, anybody that would be crazy enough to try to 
build a coal-fired power plant, you would basically be paying 
three to four times, for the emission control, what you are 
paying to generate the power.
    Ms. McCabe. What I can say, Congressman, is, based on the 
economic analysis that is laid out in our proposed rule, the 
cost of building a coal-fired power plant under the proposed 
standards is in line with other non-natural gas power 
generation. Biomass, nuclear, and such.
    Mr. Barton. Well, since they are non-competitive, that 
might be a true statement, yes. Finally, my time is expired, 
could you give the committee a summary of all CO2 
poisoning incidents in the last 5 years here in the United 
States? It is going to be a short piece of paper.
    Ms. McCabe. Yes. We are concerned about carbon because of 
its effects in the atmosphere and on the climate, which are 
well demonstrated.
    Mr. Barton. So you accept that nobody has been poisoned as 
a result of inhalation or exposure to CO2 in the 
United States ever?
    Ms. McCabe. CO2 does not work in that way, but 
it creates damage to public health without doubt.
    Mr. Barton. That is a debatable proposition.
    Mr. Whitfield. Gentleman's time has expired. At this time I 
will recognize the gentleman from Kentucky, Mr. Yarmuth. Now, I 
think, at our last subcommittee hearing, we recognized that he 
was a new member of the Energy and Commerce Committee, and Mr. 
McNerney and I were talking, and he said, I don't think we 
introduced him, and I thought we did. But, Mr. McNerney, would 
you like to make some comments?
    Mr. McNerney. Well, no, I appreciate that opportunity. Mr. 
Yarmuth is a close friend of mine from Kentucky, so he is well 
connected to these issues. But, coming from a journalistic 
background, he has a lot of insight into how to proceed, and 
question witnesses, so I really think he is going to be a 
tremendous addition to our committee and our subcommittee. 
Thank you.
    Mr. Whitfield. Yes. And since Mr. Tonko actually was here 
before Mr. Yarmuth, you all now know Mr. Yarmuth, but we are 
going to recognize Mr. Tonko of New York for 5 minutes.
    Mr. Tonko. Thank you, Mr. Chair. Sorry, Mr. Yarmuth. OK.
    Administrator McCabe, welcome. The motivation for this 
legislation and the direction of the questions today suggest 
there is considerable skepticism about carbon capture and 
sequestration technologies. I strongly support moving forward 
to address carbon pollution, and I do not believe we can leave 
the utilities sector out of that effort. While I believe carbon 
capture technologies are technically feasible, I am not as 
confident about our ability to sequester the carbon dioxide, 
that is, capture. We may need to build new plants in areas that 
are not close to a storage reservoir. In light of that, I have 
a few questions.
    Other than using the captured carbon dioxide for enhanced 
oil recovery, are there other options for sequestering carbon 
that are being considered?
    Ms. McCabe. Well, we know that it is possible to sequester 
carbon, even not for enhanced oil recovery. The EPA has 
regulations in effect now that provide guidance for people on 
how to do that, so it is doable.
    Mr. Tonko. OK, thank you. And are there any opportunities 
being explored to use biomass as the final sequestration 
reservoir for carbon?
    Ms. McCabe. I don't know, Congressman, but we would happily 
follow up on that question.
    Mr. Tonko. Thank you. Is there any opportunity for gaining 
further efficiencies in operation of a new coal-fired utility, 
or integrating renewable generation, or CHP, for that matter, 
with coal-fired generation that would enable a facility to meet 
the standard without having to capture and sequester all the 
carbon dioxide that is generated?
    Ms. McCabe. Well, I should clarify that the proposed rule 
does not require that all the carbon be captured. It is based 
on a partial carbon capture, about 30 to 50 percent, and this 
is all laid out in our proposal, is the point at which 
meaningful reductions of carbon can occur at a reasonable cost. 
There are other technologies and approaches that the power 
sector can use to reduce carbon, and you have named some of 
them.
    Mr. Tonko. And that integration, you think, is feasible 
with other generation, or CHP?
    Ms. McCabe. I believe so.
    Mr. Tonko. It seems to me we are focusing too much on what 
cannot be done, and not investing sufficient research dollars 
in solving the problems. Are we investing enough in research?
    Ms. McCabe. Hard for me to answer that, Congressman. I 
think that there is a lot of work being done to explore a 
variety of ways to produce power in a clean way. In addition, 
there are many companies that are on the forward edge of their 
industry, trying to find ways to reduce harmful pollution, 
including carbon. And there is government interest, and 
academic interest, in helping to further those technologies.
    Mr. Tonko. Well, it is a trillion dollar industry, and a 
couple billions of research just may not cut it. I would also 
observe that we rarely have a technology ready to go to solve a 
problem if there is no certain market for that technology. Is 
it the administration's view that regulatory certainty will 
move technology development forward more rapidly?
    Ms. McCabe. That has been the history of the Clean Air Act, 
in developing standards for new plants of any sort, all sorts 
of industries, that putting those regulations in place provides 
a path for the industry, and those technologies then become 
standard.
    Mr. Tonko. Well, I assume EPA is working closely with DOE 
on this effort. And, while DOE is not here today, I hope we 
will have an opportunity to hear from that agency on this topic 
also.
    And, finally, I would ask, in terms of the instant 
legislation that we are reviewing here today, does that move us 
closer toward research at a time when we need that research? It 
seems to me it is pulling us away from research. It is not 
focusing on the element of that research.
    Ms. McCabe. Well, the bill, as I understand it, we are 
taking a different approach to determining how to set a 
standard for future power plants that would not provide the 
path for innovation, and moving new technologies into the 
market.
    Mr. Tonko. Well, it seems we are in a phase of activity 
here where R&D is absolutely a compelling factor in order for 
us to transition, transform, an arena that is essential to the 
growth of this country, and its economy, so I thank you for 
your responses today, and it is great to have the agency 
represented here.
    Ms. McCabe. Thank you.
    Mr. Tonko. I yield back, Mr. Chair.
    Mr. Whitfield. Gentleman yields back. At this time 
recognize the gentleman from Nebraska, Mr. Terry for 5 minutes.
    Mr. Terry. Thank you, Mr. Chairman, and appreciate you 
being here.
    I want to follow up on a white paper that was signed by 17 
Attorney Generals, including ours from Nebraska. The white 
paper was sent to the EPA, as I said, by 17 Attorney Generals, 
and it states that, ``The elimination of coal as a fuel for new 
electric generation would have highly concerning implications 
for electricity prices, and for the economy, and job creation 
in general, as well as the competitiveness of American 
manufacturing.'' I happen to agree with the Attorney Generals' 
statement on this, particularly in Nebraska, where we are a 
coal heavy reliant state, and very close to the Powder River 
Basin. So it allows us to have very affordable and reliable 
electricity generation in our state.
    So I want to know, does the EPA maintain that it has legal 
authority to eliminate coal as a fuel for new electric 
generation?
    Ms. McCabe. The proposed rule would not eliminate coal for 
new electric generation. In fact, just the opposite. The 
proposal would provide a clear regulatory path that coal plants 
could follow.
    Mr. Terry. Now, I understand that answer, and some would 
say that the regulatory issues would, in essence, prevent, the 
way that they will be expected to be written and implemented 
would make it very difficult and expensive to use coal.
    Now, the Attorney Generals also raise concerns that the EPA 
will not properly defer to the states in establishing or 
implementing standards for existing power plants, and that, 
under the guise of ``flexibility'', the EPA will require 
existing plants to operate less, or shut down. Can you provide 
assurances to the Attorney Generals that in its GHG regulation 
of existing plants, EPA will note force the retirement or 
reduction of operation of still viable coal-fired plants?
    Ms. McCabe. So, Congressman, now you are shifting to the 
existing----
    Mr. Terry. The new one----
    Ms. McCabe [continuing]. Power plant----
    Mr. Terry. Yes, exactly.
    Ms. McCabe [continuing]. Proposal, which, of course, is not 
at a proposal stage yet. It is at the very early stages of 
discussion. And the Clean Air Act provision for existing 
facilities operates in a very different way from the provision 
for setting new source performance standards. It does require 
the EPA to set guidelines, and then relies on the states to 
develop plans to achieve those guidelines in their states. This 
is the very successful and fundamental provision that underlies 
the Clean Air Act of the federal/state partnership when it 
comes to, especially, existing sources, that states are in the 
best position to figure out how best to comply with 
environmental targets.
    So those are the discussions we are having now, and will be 
having. And the ultimate outcome, and what is expected of the 
existing fleet, will be very different from what is expected in 
a new source performance standard. And, as Administrator 
McCarthy has said, there is no expectation that carbon capture 
and sequestration would be a technology that would be 
appropriate for existing plants.
    Mr. Terry. OK. But, in discussions from some of our more 
rural coal-fired plant operations, they fear that the standards 
for reduction of CO2, that will be extremely costly 
to meet, and, therefore, their only options, that is the 
quotations around flexibility, is to reduce their operations. 
Now, are you receiving feedback from states like Nebraska, 
where we do have older coal-fired plants that are going to be 
significantly impacted by this rule?
    Ms. McCabe. We are having lots of discussions with states 
all around the country, including Nebraska and others, and we 
are discussing the differences between the new sources standard 
and the existing standards. And it is not our expectation that 
the existing standards, which, of course, will go through 
robust public comment period as well, will require the----
    Mr. Terry. So, for example, who would you be communicating 
with, or receiving input, at this early stage, from Nebraska? 
Is it from the power plants? Is it operators, the companies?
    Ms. McCabe. Through our Region XVII office, there have been 
discussions both with state officials, and I believe also the 
power sector representatives, as well as other stakeholders.
    Mr. Terry. OK. Thank you.
    Mr. Whitfield. Gentleman's time has expired. At this time 
recognize the gentlelady from California, Ms. Capps, for 5 
minutes.
    Mrs. Capps. Thank you, Mr. Chairman. And welcome, and thank 
you for your testimony, Administrator McCabe.
    We have heard from my friends across the aisle, and from 
Senator Manchin, about the cost of implementing carbon emission 
standards, but we have not heard anything yet from them about 
the much higher costs that we are already paying for due to 
climate change. We are seeing more extreme storms, coastal 
erosion, and droughts across this country, not to mention the 
broader impacts of things like ocean acidification, and the 
increased public health risks. Ms. McCabe, will you elaborate a 
bit on this, please? What are some of the costs we are already 
paying for because of these unchecked emissions, and what are 
some that we will be paying for down the road if we don't take 
action now?
    Ms. McCabe. Thank you for your question. As you noted, 
there are significant impacts already being felt across the 
country, and indeed across the globe, as a result of the 
changing climate. You mentioned some of them. In this country 
we have seen increased wildfires, in both frequency and 
severity, that cost, in terms of property damage, in danger to 
human health, and indeed sometimes to human life. In addition, 
storms like Hurricane Sandy are tremendously costly, 
devastating to those communities----
    Mrs. Capps. Yes.
    Ms. McCabe [continuing]. In terms of the property damage, 
the health impacts, which last far beyond the actual events----
    Mrs. Capps. Absolutely.
    Ms. McCabe [continuing]. Of the storm.
    Mrs. Capps. Thank you. I will move on, because----
    Ms. McCabe. Sure.
    Mrs. Capps [continuing]. I know you could go on and on on 
that topic. Given that power plants are the number one source 
of carbon pollution, do you see any way to reduce these costs, 
the kind that you were talking about, without first reducing 
carbon emissions?
    Ms. McCabe. Carbon emissions need to be reduced.
    Mrs. Capps. Yes. Now, we all know the cost and viability of 
carbon capture sequestration technology has been at the core of 
this debate. But, again, my friends across the aisle have been 
focusing on the cost, but at the same time ignoring the 
benefits of using this technology. Whether it is jobs 
developing better CCS systems, jobs installing the systems, or 
jobs in related industries that purchase the captured 
CO2, which is a whole other industry, there are some 
benefits to CCS that should not be ignored, right? Now, Ms. 
McCabe, did EPA compare the costs and benefits of implementing 
CCS in its analysis? If so, can you briefly discuss those 
findings?
    Ms. McCabe. In our proposal we have an economic analysis 
that lays out all these issues, and looks at the expected costs 
of the technologies for gas and coal plants, so all that 
information is laid out.
    Mrs. Capps. Thank you. And that is something that is 
available to the public----
    Ms. McCabe. Absolutely.
    Mrs. Capps [continuing]. So that we can see that there is a 
payoff in economic development for doing this.
    And a final question. We hear frequently that power 
companies would be eagerly building new coal plants, if only it 
weren't for the uncertainty created by EPA and these carbon 
emission regulations. Setting aside the fact that cheap natural 
gas has really been the primary reason behind the recent 
decline in coal, which I did hear mentioned in this hearing, I 
do want to focus on this uncertainty issue. To me, if there is 
one thing for certain in this debate, it is that carbon 
emissions must, and will be, regulated, it is just a matter of 
how and when. I mean, we regulate everything in energy 
generation, don't we?
    EPA's authority to regulate carbon emissions from power 
plants has been upheld twice by the United States Supreme 
Court, and President Obama has made it very clear that these 
power plant rules are a top priority for his administration. I 
see this discussion draft, and other efforts to derail the 
emission standards, as simply delaying the inevitable. So I 
want to ask if you think this proposed legislation would 
decrease or increase uncertainty regarding the regulation of 
carbon emissions. Industry tells me all the time that what they 
want is certainty. So I would like to have your comments on 
this.
    Ms. McCabe. I hear that also, Congresswoman. I have heard 
that over the years from industry, that they want regulatory 
certainty so that they can plan their investments, and know 
what they should be building. And this proposal that we are 
going forward with would provide that, as opposed to a delay 
and further----
    Mrs. Capps. Right.
    Ms. McCabe [continuing]. Uncertainty.
    Mrs. Capps. And don't you feel that the industries do 
recognize that they will be facing, if not sooner, later, some 
more regulation as they develop newer and newer technologies?
    Ms. McCabe. That is what we have heard from many 
industries.
    Mrs. Capps. Thank you very much for your testimony.
    Mr. Whitfield. Gentlelady's time has expired. At this time 
recognize the gentleman from Ohio, Mr. Latta, for 5 minutes.
    Mr. Latta. Thank you, Mr. Chairman, and thank you, 
Administrator, for being with us today. Really appreciate your 
testimony today. And, just to give you a little background 
about my neck of the woods, Ohio gets 78 percent of its overall 
electricity comes from coal-fired plants. And up in my area of 
Northwest Ohio it is even greater than that. According to the 
national manufacturers, I have 60,000 manufacturing jobs in my 
district, which is the third largest number of manufacturing 
jobs on this committee. I also represent the largest number of 
farmers, so what it really comes down to that you are hearing 
is that we need energy, and we need very competitive energy to 
be able to compete. And we are able to compete out there as 
long as we can have those things happening. But if all of a 
sudden our energy costs start going up we are in trouble.
    And also I am blessed because, not only do I have your 
traditional large energy companies that are in my state, and 
across my district, but I also have electric co-ops, which I 
also have the largest number in the State of Ohio in a 
congressional district, and I also represent a large number of 
municipal utilities. And I also go through a lot of businesses, 
and I have gone through over 400-plus businesses over about a 
14-month period. And the number one thing I have always heard 
from everybody out there, it is on regulatory issues is the 
number one concern, but it is also about the EPA. And when we 
are talking about the EPA, I have never heard any business out 
there ever tell me that they are not for clean air, or for 
clean water. But they are very concerned, because one of the 
issues, again, that concerns them is that they have got to be 
able to be competitive.
    And when I look at the proposed bill, especially in section 
three, one of the issues that it comes down to, what you would 
be looking at, they have to study the economic impacts of such 
rural guidelines that affect the potential economic growth, 
competitiveness, and jobs on the electric ratepayers out there. 
So, again, that is what concerns the people in my district, 
and, really on the manufacturing side. And if I could just ask 
a few questions, real quickly?
    The first is when you are talking about the EPA conducting 
listening sessions, willing to plan regulations for existing 
power plants, the EPA has really avoided states like Ohio that, 
again, rely heavily on coal-fired generation. Can the EPA 
provide any assurance that it will defer to states to set the 
standards of performance for existing electric generating units 
in their states?
    Ms. McCabe. What I can tell you, Congressman, is that the 
way that this section of the Clean Air Act works is that EPA 
establishes guidelines, and then the states develop plans to 
implement them. And that is a familiar approach in the Clean 
Air Act. Very much our intent is to work with states so that 
they have the flexibility to do that. And that is what a lot of 
these initial interactions we are having with the states are 
all about, is to make sure that we know what is going on 
currently in the states, what they are looking forward to in 
their own energy policy, so that we can make sure that we 
design a guideline that can accommodate that kind of 
flexibility.
    Mr. Latta. Well, it is very, very important that that 
happens, because, again, if you don't hear what is happening in 
these businesses out there, we are not going to have those 
folks out there that are going to be able to provide these 
jobs. And also, can the EPA provide the assurance for the 
ratepayers in these states that the electricity rates will not 
go up as a result of the EPA regulations?
    Ms. McCabe. We have seen over time that pollution control 
technology has been able to advance in this country in the 
power sector while keeping energy costs low, and that is a very 
important consideration for the administration as we move----
    Mr. Latta. Well, and again, because I am out talking to 
these businesses every week, and again, their number one issue 
is we have got to stay competitive. We don't want to see these 
jobs going someplace else, because they want to make sure that 
they have jobs for their community.
    And also, again, because when you look how unique, like 
Ohio is, in the Midwest, and Indiana right next door, and I 
represent a district that runs right down the Indiana line. 
When you look how much energy they get from coal in Indiana, 
will the EPA thoroughly look at the regional and local 
electricity rate impacts on these regulations?
    Ms. McCabe. We will look at those sorts of things, and we 
recognize that different states are in different positions. 
They have different energy mixes, different fuels, different 
energy needs. And all of that can be looked at in the 
development of a state specific plan.
    Mr. Latta. And finally, some of the discussion was 
occurring, especially with Mr. Barton earlier. Could you 
provide the committee with a list of the facilities that were 
using scrubbers when the standard was implemented and made 
final in the late 1970s on the----
    Ms. McCabe. Sure.
    Mr. Latta [continuing]. Clean Air--we get a list of those 
companies, we would appreciate that.
    Ms. McCabe. We will follow up with that.
    Mr. Latta. OK. Thank you very much. Mr. Chairman, see my 
time has expired, and I yield back.
    Mr. Whitfield. Gentleman yields back. At this time I will 
recognize the gentleman from Kentucky, Mr. Yarmuth, for 5 
minutes.
    Mr. Yarmuth. I thank you, Mr. Chairman. I appreciate the 
welcome, again, and thank you, Mr. McNerney, for your kind 
comments. Ms. McCabe, welcome.
    There was discussion earlier about whether Congress 
intended originally in the Clean Air Act to regulate carbon 
emissions, and the comment made that a court basically ruled 
that it did. Regardless of how we came to this point, the state 
of the law is that not only does EPA have the authority to 
regulate carbon emissions, it has the requirement to regulate 
carbon emissions, isn't that correct?
    Ms. McCabe. That is correct.
    Mr. Yarmuth. And this bill, if I am correct, does not 
change that requirement in any way. I mean, even if this bill 
were to pass, you still have to regulate carbon emissions?
    Ms. McCabe. As I understand it.
    Mr. Yarmuth. So what this bill basically does is just 
eliminate one of the tools that you might have to regulate 
carbon emissions to meet the requirement that you have under 
the law?
    Ms. McCabe. It would significantly change the traditional 
approach that we have taken----
    Mr. Yarmuth. Right.
    Ms. McCabe [continuing]. Under the Act.
    Mr. Yarmuth. And we know there was another approach to 
doing this, and Mr. Waxman mentioned it in his testimony. And I 
want to go back to 2009 for a minute, because, when we were 
debating Waxman-Markey at that time, this was a very hard issue 
for me and the other members for the delegation from Kentucky. 
So we, at least we Democrats, then Ben Chandler and I, and 
Baron Hill from Indiana, and others, worked with Representative 
Boucher of Virginia to kind of construct a methodology that 
would have minimal impact, or the least negative impact on 
Kentucky, which generates about 92 percent of its power through 
coal, and same in my district in Louisville.
    And after we had done that work, and came up with a final 
product, before I cast my vote, I talked to all of the big 
users of energy in my district. I talked to General Electric, 
which has a big manufacturing plant, Ford Motor, which has two 
plants. I talked to UPS, where we have the air hub. I talked to 
the metro government. I talked to University of Louisville, the 
public school system. Every one of those large users of energy 
said they were either for or neutral on the bill. They didn't 
think any of them, none of them, that it would impact them 
negatively. And then I talked to the utility company, which 
powers virtually everybody in my district, and they said they 
thought the impact on residential customers after 10 years 
would be $15 a month additional cost if they did absolutely 
nothing. Didn't insulate, didn't change light bulbs, didn't 
make any changes on the thermostat.
    So, at that point, we were faced with the option of saying, 
all right, this looks like it can work. It can actually deal 
with carbon emissions in a way that doesn't impact states that 
are heavily dependent on coal generated power. The option is to 
turn it back to EPA to issue guidelines which may or may not be 
particularly sensitive to a state like Kentucky, or a state 
like Indiana, or a state like Ohio. And I thought that was a 
good vote. And even though House Republicans opposed it, we did 
pass it in the House. It died in the Senate.
    So my question is, would that kind of methodology still be 
an effective way to deal with carbon emissions, and if we had 
enacted Waxman-Markey in 2009, would we be here today?
    Ms. McCabe. Well, the President has indicated, over a 
number of years, that legislation would be an appropriate way 
to deal with the situation. But that is not where we are today, 
and so we are using the tried and true mechanisms of the Clean 
Air Act to achieve the carbon reductions that are necessary.
    Mr. Yarmuth. All right. And, to your knowledge, has there 
been any proposal made by anybody in the majority party to deal 
with carbon emissions in any way?
    Ms. McCabe. I don't want to speak for everybody, but I am 
not aware of any.
    Mr. Yarmuth. Right. Well, thank you very much for your 
testimony and your work. I yield back, Mr. Chairman.
    Mr. Whitfield. Gentleman yields back. At this time 
recognize the gentleman from Texas, Mr. Olson, for 5----
    Mr. Olson. I thank the Chair. Again, welcome, Administrator 
McCabe.
    This is not news, but America is on course to resume its 
role as the world's energy powerhouse in the 21st century. 
There is no better example of that than the port of Corpus 
Christi in my home state. A few months ago, for the first time 
ever, they exported more oil than they imported. Making this 
opportunity a reality requires common sense rules and no 
overregulation. Your new power plant rule will require carbon 
capture and sequestration. The CCS pilot projects are all near 
oil country. Captured carbon is sold, captured, pumped down, 
and used to jump start old wells. EOR is critical to viable 
CCS, and you recognize that. A quote from your new plant rules 
impact analysis, ``The opportunity to sell the captured 
CO2 for EOR, rather than paying directly for its 
long term storage, strongly improves the overall economics.'' 
So let us discuss EOR.
    Coal is critical for power supply in the Eastern part of 
our country. Do you know how many states east of the 
Mississippi have a single CO2 pipeline? Any idea 
what number?
    Ms. McCabe. No, I don't know.
    Mr. Olson. The answer is two. There is one in Mississippi, 
and a small one on the Michigan/Canadian border. The one in 
Mississippi is linked to the Hastings field in my district. It 
is run by a company called Denbury. I visited their operations 
a few months ago. They spent $2 billion on developments for the 
Hastings field. But they also own the Jackson Dome area in 
Mississippi, which naturally produces CO2. There is 
a power plant in my district as well that captures 
CO2 emissions from coal-fired power plants, and uses 
them for EOR operations right there, over an existing oil 
field.
    Ms. McCabe. Yes.
    Mr. Olson. My point is that CCS EOR will only work because 
of geography and luck. My question is, if a utility decides to 
build a coal plant, they want, to use a quote from your impact 
analysis, ``to strongly improve the overall economics of CCS. 
That means they will need a new pipeline.'' Is it reasonable to 
expect utilities to successfully site, permit, finance, and 
build an entire new network of CO2 pipelines? Is 
that even possible for more than a few test plants?
    Ms. McCabe. Well, as you have noted, EOR is a very 
important use of captured CO2, does help with the 
economics of a plant, but that is not to say that carbon 
storage is not feasible in other places, and we expect those 
types of projects to develop and be viable as coal plants of 
the future are built.
    Mr. Olson. But right now they are not viable without EOR, 
and that is my point. We have to have some mechanism to get 
this carbon dioxide to these power plants. Except for special 
circumstances, geography, with the guise of the Denbury people 
owning a naturally producing CO2 structure.
    My final question is about reliability. And EPA says that 
the new plant rule won't impact electric liability. However, 
the EPA says one benefit is that, and this is a quote, ``the 
proposed rule will also serve as a necessary predicate for the 
regulation of existing sources.'' We don't know exactly what 
the new existing plant rule will look like, but if past actions 
of the Obama administration reflect the future, there will be 
new burdens put upon coal. My home state is in desperate need 
of more power, and reliability is one of my top concerns. Can 
you guarantee that a carbon dioxide rule on existing coal 
plants will put grid reliability first?
    Ms. McCabe. You are asking about the existing rule?
    Mr. Olson. The existing rule, any rule.
    Ms. McCabe. For existing power plants?
    Mr. Olson. Yes, ma'am.
    Ms. McCabe. Yes. I can assure you, Congressman, that in 
looking at what the guidelines would be for existing power 
plants, we would have grid reliability, cost, and those 
considerations very much in our minds as we go forward. And as 
I have noted, the implementation of those guidelines is 
something that the states will be involved with, and it will be 
very much on their minds as well.
    Mr. Olson. But first, number one, everything else below? I 
mean, because it is important, ma'am. We have to have power to 
keep going.
    Ms. McCabe. It is absolutely important, and we don't 
disagree.
    Mr. Olson. OK. Yield back the balance of my time.
    Mr. Whitfield. Gentleman's time has expired. At this time I 
recognize the gentleman from Virginia, Mr. Griffith, for 5 
minutes.
    Mr. Griffith. Thank you, Mr. Chairman. I would have to say 
that many of the things my colleagues have said I agree with, 
and I do have many concerns, particularly in light of the fact 
that did hear earlier from the folks who run the Mississippi 
plant that that is not a practical plan anywhere else, and it 
cost them a billion dollars more than they thought it was, and 
only works because they are right next to the fuel source, 
which is not your typical coal in the United States.
    Switching gears, as established in statute and practice, 
the term stationary source has a specific meaning under Section 
111 of the Clean Air Act. Is the EPA considering or planning to 
redefine what stationary source means for the purposes of its 
pending rulemaking activity on existing electric generating 
units? And here is my concern. There are some who would 
believe, or have us think, that it ought to be the whole state. 
So if I have got a plant, which we do, that was just opened 
last year in my end of Virginia, and it is doing fine, but the 
rest of the state isn't, instead of looking at each individual 
plant, that the EPA may be looking at changing its rule, and 
going with every state, and then all of a sudden new regs get 
put on my clean plant in order to try to help the plants that 
aren't as clean in other parts of the state. Is the EPA looking 
at changing any of those rules in regard to the stationary 
source?
    Ms. McCabe. We are not looking at changing the definition 
of stationary source, but what we will be doing, through the 
111(d), which is the existing source----
    Mr. Griffith. Yes.
    Ms. McCabe [continuing]. Program, is allowing the states 
the flexibility to look at how to meet a target, looking across 
all of the plants, and other activities in the state, which 
means that new clean plants are a benefit to the states, 
because they are already making progress towards reducing 
carbon emissions.
    Mr. Griffith. But if you have some plants that are cleaner 
than others, and the worry that I have is that oftentimes in 
the past the EPA has said, well, we are going to let the state 
do this, and then the EPA, behind the scenes, and this happened 
on storm water management in Virginia, says, you are going to 
adopt these regs, you are going to do this, or else we are 
going to come in and take it away from you, and we are going to 
do it ourselves. That was actual testimony in front of a 
committee I used to sit on when I was in the state legislature.
    So I am a little concerned that if you are going to let the 
states go and look at a statewide project, maybe it is not my 
new clean plant, but it is one that is a little bit newer than 
some of the others. Is there going to be pressure put on the 
states to then say, OK, we don't care if you have one bad 
actor, or two bad actors, you have got to ratchet it up on 
everybody in order to meet certain standards.
    Ms. McCabe. Yes. Well, in the Clean Air Act, which is what 
I am familiar with, we have a long history of working with 
states, developing plans to implement the federal standards, 
and there is certainly room in the process for states to be 
looking at what makes the most sense for their states.
    Mr. Griffith. Well, and I would like to think that we could 
figure out what makes the most sense, but that has not been my 
experience in the past with some of the regulations. In context 
of 111(d), and regulations for existing power plants, the EPA 
frequently refers to the term flexibility. I have not often 
found that to be the case. And not with you, ma'am, but with 
others. Does this mean flexibility in setting the standards, or 
in implementing the standards?
    Ms. McCabe. In implementing the standards. It is EPA's role 
to set the guideline, the target.
    Mr. Griffith. But if flexibility is good, shouldn't it be 
good not only for implementing, but also for setting the 
standards, to make sure that we are not putting people out of 
business, or, as you testified a few minutes ago, making sure 
that we have grid reliability? Shouldn't that flexibility be 
there on both ends of that equation?
    Ms. McCabe. Well, the Clean Air Act's approach over the 
last 40 years has been for the Federal Government to set the 
expected environmental result, and then for the states to find 
flexible and appropriate ways to meet those, and that is the 
way that Congress set out those provisions.
    Mr. Griffith. And Congress did give, I would think, way too 
much flexibility to the EPA, but that is an opinion of mine.
    In regard to the Whitfield-Manchin bill, it seems to me 
that it is reasonable to set standards based on actual 
demonstrable technology. You would agree with that, would you 
not?
    Ms. McCabe. The Clean Air Act already asks us to set 
standards based on----
    Mr. Griffith. I am running out of time. I need a yes or no. 
But you would agree that actual technology, as opposed to 
theorized technology, would be preferable, would you not? Yes 
or no?
    Ms. McCabe. Actual technology is what we base our rules on.
    Mr. Griffith. All right. And would you also agree with me 
that there are high efficiency designs for new coal power 
plants, such as the super-critical and ultra-critical steam 
units, yes or no?
    Ms. McCabe. Yes, and those are appropriate technologies, 
certainly.
    Mr. Griffith. And the Whitfield-Manchin draft legislation 
simply requires that, for new electric generating units, the 
EPA standards would be based on technologies that have been 
demonstrated at operating commercial power plants, and that is 
certainly reasonable, isn't it?
    Ms. McCabe. That would not----
    Mr. Griffith. I am out of time.
    Ms. McCabe [continuing]. Be the approach of the Clean Air 
Act, that has been proven over the years to work effectively in 
developing----
    Mr. Griffith. So is that a yes or a no?
    Ms. McCabe [continuing]. New technology. I would not agree.
    Mr. Griffith. All right.
    Mr. Whitfield. Gentleman's time has expired. At this time I 
recognize the gentleman from West Virginia, Mr. McKinley, for 
5----
    Mr. McKinley. Thank you, Mr. Chairman. I have got five 
questions at least, if not more, but we will try to see if we 
get through some quickly with it. The first is, I am just 
curious, some of the earlier statements had been about that 
this is commercially viable now.
    Ms. McCabe. Yes.
    Mr. McKinley. Because I am curious, Lisa Jackson said, back 
in November of 2011, that it wouldn't be available for, and her 
quote was ``maybe a decade or more.'' So I am curious how that 
has moved up on the chain. And DOE put out their own report 
that said it is not going to be commercially viable until 2020 
as well. But you are saying it is available now. So could you 
get back to me explaining why you disagree with Lisa Jackson, 
and why you disagree with the Department of Energy, their 
projection that it could be available? Could you get back in 
writing to me, rather than answer now?
    Ms. McCabe. Certainly.
    Mr. McKinley. Thank you. Second is, I want to probe a 
little further about you saying how coal-fired powerhouse will 
be viable. You have answered that, but, as an engineer, I want 
to probe a little deeper with that. When you say viable, do you 
mean that will maintain that 38 to 40 percent of the portfolio 
of this country of energy production?
    Ms. McCabe. We expect coal to remain a substantial portion 
of the energy portfolio----
    Mr. McKinley. No, I asked----
    Ms. McCabe [continuing]. Even under these----
    Mr. McKinley. No, the question I asked was----
    Ms. McCabe [continuing]. Even under the proposed----
    Mr. McKinley [continuing]. Thirty-eight to 40 percent?
    Ms. McCabe. That is a pretty precise number.
    Mr. McKinley. OK, call it 35 to 40 percent, then, where it 
is now. Is coal going to lose more under these regulations? OK, 
you are the one that used the term viable. I am trying to 
define viability. I would say viability is 7 \1/2\ cents per 
kilowatt hour in West Virginia. Are you saying that the price 
of electricity is going to go up?
    Ms. McCabe. Congressman, there are a number of factors that 
are affecting the power sector now----
    Mr. McKinley. Will the price of electricity go up under 
your definition of viability?
    Ms. McCabe. I can't give you a----
    Mr. McKinley. And you can't define whether or not it is 
going to be the 35 to 40 percent?
    Ms. McCabe. Well, there are a number of factors that go 
into how much of the power in this country----
    Mr. McKinley. So we could----
    Ms. McCabe [continuing]. Is produced by----
    Mr. McKinley [continuing]. Your term of viable, we could 
have less and less use of coal. I am just concerned about all 
the coal miners, and the people that work in these mines, or 
the people in the industry, how they are going to find jobs, if 
it is less and less, and you are saying it is viable. I am not 
so sure I am into that.
    Let me go to a third element very quickly with it. The 
United Nations panel came out with a report. They have been 
doing it periodically. They talk about that 96 percent of all 
CO2 emissions are naturally occurring, and what this 
whole fight is all about is just four percent. Do you agree 
that it is just four percent?
    Ms. McCabe. I don't agree----
    Mr. McKinley. Four percent I am saying is anthropogenic.
    Ms. McCabe. I don't agree that anthropogenic emissions are 
not a significant factor in----
    Mr. McKinley. That is not the question. State the question, 
please. Do you agree with the United Nations, that said four 
percent of all CO2 emissions come from man?
    Ms. McCabe. I am not familiar with that statement, 
Congressman.
    Mr. McKinley. OK. But you will accept that under the, well, 
maybe you don't, if you are not familiar with it, but I think 
it was the Sierra Club, maybe Earth Justice. I know that Al 
Gore has said that 30 percent of all man-made CO2 
emissions come from the deforestation of our tropical rain 
forests, so that would represent 1.2 percent. If it is four 
percent, 1.2 percent would be 30 percent of four. But yet coal-
fired powerhouses only generate, what, do you know the number?
    Ms. McCabe. They----
    Mr. McKinley. Two tenths of one percent of the 
CO2 emissions in the world come from American coal-
fired powerhouses, six times less than the deforestation of our 
tropical rainforests. But yet, with all these regulations you 
are putting at risk all the American workers in these 
powerhouses, and coal mines, and all across this country. Two 
tenths of one percent, you are willing to put our economy at 
risk for \2/10\ of one percent. I am not comfortable with that.
    Mr. McCabe. Coal fired power plants are the largest sources 
of carbon in the country.
    Mr. McKinley. It is \2/10\ of one percent of the global 
emission, six times worse in the deforestation of our tropical 
rainforests. So my question is, if we decarbonize America, that 
is what you are trying to do, who are you going to blame the 
next time there is a snowstorm, or there is another tornado? 
Because we won't be producing CO2 in America any 
longer, so who is the EPA going to blame next?
    Ms. McCabe. There are many steps that need to be taken to 
reduce carbon, and if----
    Mr. McKinley. Who will you blame next? If we don't produce 
CO2, what will be your excuse for the next tornado, 
the next Hurricane Sandy? I am sorry, my time has run out.
    Mr. Whitfield. Gentleman's time has expired. At this time, 
recognize the gentleman from Texas, Mr. Green, for 5 minutes.
    Mr. Green. Thank you, Mr. Chairman, and I would like to 
thank our witness for being here. And the topics we are 
addressing today at this hearing are complicated, and there are 
a wide range of views. I believe it when scientists tell us 
that man-made global warming is real, personally, I believe to 
successfully regulate GHG emissions, Congress should develop a 
regulatory program that would promote economic growth, and 
provide the responsible path forward. But until Congress moves 
to pass meaningful legislation, efforts such as this 
legislation are not the correct way to address that issue.
    Ms. McCabe, coming from Texas, in the Houston area, I have 
been interested, and I know we had Secretary Moniz here a while 
back. I know that Secretary Moniz visited the plant in 
Mississippi this week and endorsed the technology. At this 
point, where are we with that CCS technology?
    Ms. McCabe. Yes, the Secretary was there and visited the 
plant. The technology at that plant, and several others, is 
moving forward, so we are looking forward to those projects 
beginning operation, and others considering it.
    Mr. Green. OK. My next question would be is CCS 
technologically and economically feasible for everyone? Because 
I know there have been some problems at the Mississippi plant.
    Ms. McCabe. Well, the Mississippi plant has a variety of 
other activities going on beyond the CCS. But the technology is 
available to plants widely.
    Mr. Green. And we know from other EPA studies and proposals 
there is always concern about accurate data. Is the EPA 2012 
proposal data still accurate enough to be effective?
    Ms. McCabe. Well, we always try to base our rules on the 
most accurate data, and the transparent and open rulemaking 
process make sure that people have an opportunity to give us 
the most up to date data. So, before we would finalize any 
rule, we would make sure we had the most up to date data.
    Mr. Green. Well, and again, coming from Texas, I know our 
state agencies are unique, and have important information to 
assist them in balancing these economic demands. Keeping that 
in mind, how would you characterize the states' regulatory 
efforts up to this point, and their importance moving forward?
    Ms. McCabe. Well, the states are key regulatory partners in 
reducing pollution in this country, and always have been, but 
the system that we have relies on national standards being set 
for major industries across the country, so that the pathway is 
clear so that power plants built all across the country that 
are of similar types would meet the same standards, and then 
the states very effectively implement those rules.
    Mr. Green. I guess I am still skeptical about the economic 
feasibility of that. And again, I am looking forward to what 
happens in Mississippi, because I represent a refining 
community, and we do have storage places in Texas that you can 
store the carbon.
    But the President recently announced an end to the 
financing of overseas coal plants in emerging markets. This, 
combined with the EPA actions, are significant measures. And 
again, we know what China is doing on coal, and I am sure we 
are not providing any overseas financing for that, but in other 
areas. Is the administration action enough to really address 
climate change without strong mandatory reductions by other 
major emitters, including, like, China and India?
    Ms. McCabe. Well, this is a global challenge, as you have 
indicated, and actions will need to be taken by many people. 
Part of the President's climate plan is strong United States 
leadership internationally. And one important aspect of being a 
credible and strong leader internationally is to be doing the 
things we need to do here at home. So the plan includes very 
much both of those elements.
    Mr. Green. I know the United States has reduced our carbon 
emissions over the last few years for lots of reasons. You 
know, downturn in the economy, more fuel efficient vehicles. 
But we have actually reduced our country, but in Western 
Europe, and, of course, in the emerging nations, in the 
developing nations, there has been hardly any. In fact, it just 
continues to grow. And I hear my colleagues from West Virginia 
are concerned. We can do everything we want to in this country 
on carbon, but unless our international partners and 
competitors are on the same wavelength, it doesn't do us any 
good, except maybe price our economy out of the world market, 
and that is, I think, a lot of our concern. But I appreciate 
you being here.
    Thank you, Mr. Chairman. I yield back.
    Mr. Whitfield. Gentleman yields back. At this time 
recognize the gentleman from Louisiana, Dr. Cassidy, for 5 
minutes.
    Mr. Cassidy. Thank you, Mr. Chairman.
    Ms. McCabe, I am over here. Let me build a little bit on 
the questions that Mr. Green just asked. Earlier this year I 
introduced the Energy Consumers Relief Act to provide greater 
relief and transparency about the costs and jobs impact of EPA 
regulations that cost at least a billion dollars. Now, first, 
let us just, if you will, kind of establish common ground. Do 
you agree that EPA rules can affect the economy by raising 
electricity rates for consumers, and business, and et cetera?
    Ms. McCabe. I agree that it is an important issue to look 
at, and a lot of information needs to be evaluated by experts.
    Mr. Cassidy. Now, one of the wonderful things we are 
hearing about right now is re-shoring, where companies are 
bringing jobs back from places like China and India because our 
cost of electricity is so much less than theirs. We can't beat 
them on the price of labor, we are whacking them on the price 
of electricity. So again, building on what Mr. Green said, is 
it a concern at EPA that these regulations will effectively 
increase the cost of that electricity to the point that we will 
not have the same amount of re-shoring, the same number of jobs 
being created in these energy intensive enterprises?
    Ms. McCabe. We do enjoy very low energy prices in this 
country, and that has been the case throughout the history of 
the Clean Air Act, and improved efficiency, and lowered 
emissions from power plants. So we have been able to maintain 
those low prices.
    Mr. Cassidy. Now, that is certainly retrospectively, but if 
we speak going forward, and a lot of rules are put in which 
effectively prejudice against coal, which is now, what, 40 
something percent of our energy supply, do we have the risk of 
undoing that? That, as we raise the cost of electricity, what 
was true in the past will not be true in the future, because of 
these regulations, serving as a form of attacks, raising the 
cost of electricity, adversely affect the movement of jobs back 
from overseas?
    Ms. McCabe. The analysis that we do for this rule will be 
the kind of analysis that we have done for previous rules. And 
I expect that this rule will work in a similar fashion. That 
is----
    Mr. Cassidy. Now, I have some concern, which is why I put 
forward that law, if you will, about encouraging transparency. 
Again, do you accept that there should be transparency about 
the potential cost of EPA regulations to ratepayers?
    Ms. McCabe. EPA follows robust transparency and public 
input processes for all of our rulemakings.
    Mr. Cassidy. Now, you say that, but during an EPA budget 
hearing this past spring, the EPA's Acting Administrator 
admitted that EPA had not done sufficient economy-wide modeling 
to account for the full economic impacts of its major rules, 
including higher rates paid by electricity consumers as a 
result of regulations.
    So let me ask, will you commit that, for any regulations 
relating to existing power plants, including the pending 
greenhouse rules, that EPA will conduct economy-wide modeling 
to measure the cost of the higher electricity rates on 
households, businesses, and its effect upon the re-shoring that 
we need to happen in order to recreate good jobs with good 
benefits for the working class of America?
    Ms. McCabe. In all of our economic analysis that we do for 
our rules, EPA follows OMB procedures, and uses appropriate 
peer reviewed and transparent analysis and approaches.
    Mr. Cassidy. But I am trying to reconcile that with the 
Acting Administrator admitting they had not done sufficient 
economy-wide modeling to account for the economic impacts of 
major rules. So there seems to be a little bit of discordance. 
You are saying that you have, and yet he is saying that they 
had not.
    Ms. McCabe. No, there is no disagreement there. Economy-
wide modeling is an approach that has not been used in our 
rules because there are not appropriate analytical methods to 
do it.
    Mr. Cassidy. Now, on the other hand, I am almost out of 
time, but if you don't do that, then that gets back to where I 
was going with this. If you don't do the economy-wide, we don't 
understand the ripple effect, smushing, if you will, the hope 
for re-shoring of jobs.
    Ms. McCabe. The agency has engaged with our Science 
Advisory Board to undertake right now an inquiry into the types 
of appropriate models that would be used.
    Mr. Cassidy. So my fear is that if you don't come to a 
conclusion before these regulations are put out, the hope for 
re-shoring of those jobs will not happen. Your regulations are 
creating uncertainty. Business hates uncertainty. They are not 
going to come back if, my gosh, all of a sudden our electricity 
rates are going up, will they?
    Ms. McCabe. The regulations are creating certainty, so that 
plants will know----
    Mr. Cassidy. But it may be certainty of higher cost. You 
have not done your economy-wide modeling, and so, therefore, 
you don't know whether or not the energy intensive enterprise 
will suddenly find themselves priced out both on labor and on 
the cost of energy, correct?
    Ms. McCabe. There has been an economic analysis done on the 
proposed rule. It is open for comment, and----
    Mr. Cassidy. But not economy-wide, you point out.
    Ms. McCabe. Because the methodologies for that approach 
are----
    Mr. Cassidy. So, therefore, we don't know, and so, 
therefore, we may be keeping jobs from re-shoring because you 
don't know, because we don't have the model. That is my fear.
    I am out of time. I yield back.
    Mr. Whitfield. Gentleman's time. At this time I recognize 
the gentleman from Colorado, Mr. Gardner, for 5----
    Mr. Gardner. Thank you, Mr. Chairman, and thank you, Ms. 
McCabe, for your time here today and your testimony.
    You just mentioned that, and I wanted to follow up with Mr. 
Cassidy, that your regulations create certainty. You just said 
that. Does your regulation make electricity more or less 
affordable?
    Ms. McCabe. Our regulation, as required by 111(b) of the 
Clean Air Act, is intended to require for future power plants 
state of the art technologies----
    Mr. Gardner. Well----
    Ms. McCabe [continuing]. That will----
    Mr. Gardner. If you don't mind, I have a series of these 
questions. Does it make electricity more or less affordable?
    Ms. McCabe. The rules that we will be requiring will allow 
coal plants to proceed in a way that is----
    Mr. Gardner. Right, but I am trying to get to the certainty 
that you said your regulation creates.
    Ms. McCabe. Yes.
    Mr. Gardner. If this regulation creates certainty----
    Ms. McCabe. Yes.
    Mr. Gardner [continuing]. Does your regulation make 
electricity more or less affordable?
    Ms. McCabe. We do not expect that these rules will make 
electricity less affordable in this country----
    Mr. Gardner. OK.
    Ms. McCabe [continuing]. As plants are able to plan ahead 
and build plants that will meet the requirements----
    Mr. Gardner. So will it make electricity more or less 
expensive, then? Maybe that is a better way to put it.
    Ms. McCabe. These are the kinds of things that we look at 
in our economic analysis, and----
    Mr. Gardner. Right. So----
    Ms. McCabe [continuing]. Everybody can----
    Mr. Gardner [continuing]. To keep that certainty, and to 
keep the certainty that you said these rules provide, does it 
make electricity more or less expensive?
    Ms. McCabe. The analysis may show that the addition of 
additional equipment will increase costs to----
    Mr. Gardner. OK, so there is the certainty right there. So 
it will increase electricity costs, thank you. You said that 
you did economic viability projections analysis. Were you at 
the coal hearing in Denver that the EPA held, the listening 
session in Denver?
    Ms. McCabe. No, I wasn't.
    Mr. Gardner. OK. So do you do economic viable studies of 
communities where they produce coal?
    Ms. McCabe. We do economic analysis of the proposed rules 
that we are looking at.
    Mr. Gardner. But, do you look at the communities, where 
there is a coal mine, and there are employees there? I mean, do 
you look at the economic viability of those communities, and 
what happens in this rule that you are certain will make 
electricity more expensive?
    Ms. McCabe. I should amend what I said a minute ago, or 
clarify what I said a minute ago. The analysis that we have put 
forward on this rule does show that this particular rule will 
not increase electricity prices.
    Mr. Gardner. OK. Do you believe that overall regulations at 
EPA increase the cost of electricity?
    Ms. McCabe. I----
    Mr. Gardner. Looking at this regulation in combination with 
other regulations that have come through on greenhouse gases, 
or electricity production from coal?
    Ms. McCabe. There are many factors that affect electricity 
prices over time, and environmental regulations have been shown 
to be a very, very small aspect of what increases prices.
    Mr. Gardner. Do you think those price increases have a 
larger impact on people who may be on a fixed income?
    Ms. McCabe. The price of electricity overall is something 
that affects people. But, as I said, the contribution of 
environmental regulation to those cost changes is minimal.
    Mr. Gardner. All right. Just a couple of other questions. 
For existing plants, do you agree that states will have a 
primary role in setting performance standards for electric 
generating units?
    Ms. McCabe. For existing plants, the role that states have 
is to design the plan at the state level that will meet the 
guidelines that the EPA will establish.
    Mr. Gardner. So the states will have a primary role under 
the Regional Haze Program, this is what I am getting at, which 
is also a program intended to be implemented primarily by the 
states, EPA has been routinely disapproving SIP plans, and 
seeking to impose federal implementation plans that require 
plant owners to spend millions of dollars, or shut down their 
units. Where states object, or challenge the EPA, EPA then 
proceeds to enforce these federal implementation plans through 
litigation. We have got examples of these in Arizona, New 
Mexico, Montana, North Dakota, Utah, and Wyoming. Will you 
provide me with an assurance the EPA will give states more 
deference under its pending greenhouse gas regulations than the 
agency has done under the Regional Haze Program?
    Ms. McCabe. EPA, in fact, has approved the majority of the 
Regional Haze plans.
    Mr. Gardner. So, again, the question is will you give 
states more deference under its pending greenhouse gas 
regulations than the agency has under its Regional Haze 
Program?
    Ms. McCabe. EPA will work with the states, as we always do, 
when they have the authority to design state plans, to make 
sure that those state plans meet the federal target.
    Mr. Gardner. And I have some additional questions. When we 
had Administrator McCarthy before the committee last year, we 
talked about new source performance standards for power plants, 
and, in our exchange, she testified that she could not rule out 
regulation of any of the 70 source categories under EPA's new 
source performance standards program, which covered all types 
of industrial activities. Is that still your position, that you 
cannot rule any source out?
    Ms. McCabe. We are focused on the actions laid out in the 
President's Climate Action Plan, which has power plants as the 
rulemaking that we are----
    Mr. Gardner. Yes. Are there any source categories the EPA 
can affirmatively rule out of greenhouse gas regulations?
    Ms. McCabe. There are many source categories that EPA 
regulates that we have----
    Mr. Gardner. So you can't rule----
    Ms. McCabe [continuing]. No----
    Mr. Gardner [continuing]. Any of them out?
    Ms. McCabe [continuing]. Present intention of----
    Mr. Gardner. If the EPA doesn't pursue regulation of all 
these emission sources, can the EPA guarantee that there will 
not be lawsuits to compel the regulation?
    Ms. McCabe. I can't guarantee that there won't be lawsuits. 
The EPA gets sued all the time. But we make our decisions about 
what to do based on the science, and priority setting, and 
power plants are clearly the largest source of carbon in the 
country.
    Mr. Gardner. The Chairman has been incredibly indulgent of 
my time. And just, finally, one last question. Can the EPA 
provide an assurance that there won't be an ever expanding 
suite of EPA greenhouse gas regulations?
    Ms. McCabe. As I said, we are focused on the source 
category that contributes the most carbon pollution in this 
country.
    Mr. Gardner. So there could continue to be an ever 
expanding suite?
    Ms. McCabe. There are a number of source categories that I 
would not expect us to be looking at, in terms of greenhouse 
gas emissions, and we are focused----
    Mr. Gardner. Be interested in finding out what those are. 
Thank you.
    Mr. Whitfield. Gentleman's time has expired. At this time I 
recognize the gentleman from Texas, Mr. Hall, for 5 minutes.
    Mr. Hall. Thank you, Mr. Chairman.
    Ms. McCabe, the Bureau of Labor Statistics reported, back 
earlier in November 2013, that there were 11.3 million 
Americans unemployed, including 4.1 million long term 
unemployed, and they also reported 8.1 million underemployed 
individuals, those working part time, or had been cut back on 
the work, or couldn't find a full time job. Would you agree 
that raising energy prices when we are facing such chronic 
levels of unemployment is not in the best interest of the 
economy?
    Ms. McCabe. Congressman, we are very concerned, as you are, 
about jobs in this country, and about----
    Mr. Hall. I know you are----
    Ms. McCabe [continuing]. The economy of this country----
    Mr. Hall [continuing]. That, but just answer my question.
    Ms. McCabe. We don't believe that moving forward with these 
regulations will be detrimental to the economy of this country.
    Mr. Hall. Well, for the last 3 years EPA has been telling 
us that they don't intend to implement a cap and trade program 
to regulate greenhouse gas emissions. And as recently as May 
15, I think, of this year Assistant Administrator McCarthy, who 
is testifying just below us here today, stated, in a response 
to our committee that, ``Both Former Administrator Jackson and 
I have said in the past that EPA has no intention of pursuing a 
cap and trade program for greenhouse gases, and I continue to 
stand by these statements.''
    Yet EPA appears to be contemplating a ``system based 
approach'' for regulating existing power plants. In a document 
entitled ``Questions for State Partners'', which has to do with 
EPA's planned greenhouse gas regulations for existing power 
plants, EPA asked questions relating to measures like this: 
resource planning requirements, end use energy, efficiency 
resource standards, renewable energy portfolio standards, and 
appliance and building code energy standards. These measures 
seem to me, and maybe I am wrong about it, but they seem to me 
that they are the types of programs that were included in the 
cap and trade legislation that was rejected by this Congress, I 
think, some 2 or 3 years ago, and I think you are aware of 
that.
    Ms. McCabe. Yes.
    Mr. Hall. Looking at EPA's documents, that sounds like a 
back door cap and trade. And I will just ask you these 
questions, just get right to the point. Talking about the 
planned greenhouse regulations for existing plants, is the EPA 
considering requiring states to adopt these types of programs?
    Ms. McCabe. No, Congressman, this is not a cap and trade 
program at all. This is a program that allows states to develop 
flexible state plans.
    Mr. Hall. Well, you aren't whatever you are acting, in 
whatever positions you take. And when EPA says the agency, 
``has no intention of pursuing a cap and trade program for 
greenhouse gases'', does that just mean at the national level?
    Ms. McCabe. Well, it is not up to us to develop the state 
plans. We are not developing a cap and trade program, nor will 
we require any state to put one in place.
    Mr. Hall. Well, that is my next question. I thank you for 
answering it. Might EPA effectively require it at the state 
level?
    Ms. McCabe. It would be entirely up to the state how they 
would want to approach----
    Mr. Hall. OK.
    Ms. McCabe [continuing]. Meeting the target.
    Mr. Hall. I think that----
    Ms. McCabe. A cap and trade program is not required.
    Mr. Hall. I think that is fair enough, and I thank you for 
your time.
    Mr. Whitfield. Well, thank you, Mr. Hall, and I think that 
concludes our questioners, and I am sure the people on the 
third panel are delighted with that.
    Ms. McCabe, before you go, I want to ask one question, or 
just follow up on Mr. Gardner. Is it your opinion, your belief, 
that the states have the actual authority to set the 
performance standards for existing plants? Or are you saying 
EPA will set the standard of performance for existing plants in 
the states?
    Ms. McCabe. EPA will set the target, but then the states 
will have flexibility to meet that in whatever way makes sense 
to them. So it does not need to be a unit by unit regulation, 
or expectation.
    Mr. Whitfield. And you all are working on this already, 
even though you are not expected to have it until the summer of 
2015, is that correct?
    Ms. McCabe. Well, our proposal will be out in June of 2014. 
We are gathering information right now in order to inform the 
proposal that we will----
    Mr. Whitfield. OK.
    Ms. McCabe [continuing]. Put together.
    Mr. Whitfield. OK. Well, thank you very much, and we look 
forward to your coming back and spending more time with us.
    Ms. McCabe. All right. Thank you.
    Mr. Whitfield. Yes.
    At this time I would like to call up the third panel of 
witnesses, and I want to thank them for their patience, and for 
the long distance that they have come. We appreciate that.
    First of all, we have the Honorable Scott Pruitt, who is 
the Attorney General from the great State of Oklahoma. We have 
the Honorable Henry Hale, who is the mayor of Fulton, Arkansas, 
which I believe is the location of the Turk plant, near 
Texarkana. We have Mr. Tony Campbell, who is CEO and President 
of the East Kentucky Power Cooperative. We have Ms. Susan 
Tierney, who is Managing Principal of the Analysis Group. We 
have Mr. David Hawkins, who is the Director of Climate Programs 
at the Natural Resources Defense Council. We have Mr. Ed 
Chichanowicz, who is an engineering consultant. We have Dr. 
Donald R. van der Vaart, Chief, Permitting Section, North 
Carolina Department of Environment and Natural Resources, 
Division of Air Quality. And we have Mr. Ross Eisenberg, who is 
Vice-President of Energy and Resources Policy at the National 
Association of Manufacturers.
    Thank you for being here, and I will recognize each one of 
you for 5 minutes for your opening statement, and then we will 
have some questions for you.
    So, Attorney General Pruitt, we will recognize you first. 
Thanks for being with us today, and you are recognized for 5 
minutes.

STATEMENTS OF HON. E. SCOTT PRUITT, ATTORNEY GENERAL, STATE OF 
   OKLAHOMA; HON. HENRY HALE, MAYOR, FULTON, ARKANSAS; TONY 
 CAMPBELL, PRESIDENT AND CEO, EAST KENTUCKY POWER COOPERATIVE; 
  SUSAN F. TIERNEY, MANAGING PRINCIPAL, ANALYSIS GROUP; DAVID 
   HAWKINS, DIRECTOR OF CLIMATE PROGRAMS, NATURAL RESOURCES 
DEFENSE COUNCIL; J. EDWARD CICHANOWICZ, ENGINEERING CONSULTANT; 
   DONALD R. VAN DER VAART, CHIEF, PERMITTING SECTION, NORTH 
   CAROLINA DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES, 
DIVISION OF AIR QUALITY; AND ROSS E. EISENBERG, VICE PRESIDENT, 
     ENERGY AND RESOURCES POLICY, NATIONAL ASSOCIATION OF 
                         MANUFACTURERS

               STATEMENT OF HON. E. SCOTT PRUITT

    Mr. Pruitt. Chairman Whitfield, Congressman McNerney, and 
members of the subcommittee, good morning, and thank you for 
the invitation to join you today to discuss concerns, from a 
state perspective, of the EPA's proposed standards of 
greenhouse gas emissions on new power plants. This is an issue 
of great concern for Oklahoma and other states who were given 
authority by Congress to develop and implement emissions 
standards from existing power plants.
    In recent years the EPA has expressed an unwillingness to 
appropriately defer to state authority under the Clean Air Act. 
The prospect of aggressive performance standards for coal based 
power plants is a cause for serious concern among the various 
states. The EPA has indicated a similarly aggressive approach 
to existing coal based power plants, for which the President 
has directed the EPA to propose standards by June 1 of 2014, 
and to finalize those rules by June 1 of 2015.
    While the Clean Air Act gives the EPA the authority to 
develop the framework for the states to establish emission 
standards for existing power plants, the EPA may not dictate to 
the states what those standards should be. The states are 
allowed to engage in a cost benefit analysis, and consider a 
wide range of factors in setting those standards. This is 
important to note because the EPA's new emission standard, 
under the guise of ``flexible approaches'', mandates new coal 
based power plants use costly carbon capture storage 
technology. This is technology that likely remains commercially 
unviable for at least a decade.
    The U.S. Energy Information Administration projects coal-
based electric generation will provide 40 percent of base load 
energy in this country in 2014. The elimination of coal based 
electric generation would result in higher electricity prices 
for our ratepayers. It would be detrimental to the national and 
state economies, as well as job creation, and other things. 
Increased electricity prices also will hurt the competitiveness 
of American manufacturing. I, and the Attorney Generals of 16 
other states, recently submitted to the EPA a white paper 
outlining those concerns, and our position on both the EPA and 
the states' role under Section 111(d) of the Clean Air Act. I 
have submitted that white paper to you this morning.
    Unfortunately, this is not the only issue at which the 
states and the EPA are at odds over the scope of their 
respective responsibilities. The Congressman from Colorado 
referenced the Regional Haze program. Many states, including 
Oklahoma, are actively engaged in legal challenges to thwart 
the EPA's attempt to expand its authority under the Regional 
Haze program. Under the Clean Air Act's Regional Haze rules, a 
target date of 2064 was set to achieve natural visibility in 
federally designated areas across the country. Regional Haze 
deals with issues of aesthetics, not health, and visibility, 
and safety of the public health. As such, the Clean Air Act 
gives states the primary role in establishing regulations.
    In Oklahoma, stakeholders joined together, worked with 
utilities, to construct a plan for Regional Haze, and submitted 
that in 2010, that allowed for fuel diversity, and balanced 
environmental protection and the need for affordable energy. 
Our state plan accomplished those objectives for the Regional 
Haze rule, and exceeded the target date of 2064 by nearly 4 
decades. The EPA rejected Oklahoma's state implementation plan 
in favor of a federal implementation plan, which would cost the 
state utilities almost $2 billion within 3 years. What is more, 
the federal plan would provide less environmental benefits than 
the state plan, and is estimated to increase costs for Oklahoma 
ratepayers by as much as 20 percent.
    Our state made the decision to sue the EPA over its 
decision. This is a case of first impression under the Regional 
Haze rule adopted in 2005, and will likely potentially end up 
before the U.S. Supreme Court. Many states are monitoring that 
case, as the decision will impact their ability to set policy 
within their jurisdiction.
    There is a great deal of frustration among the states with 
the EPA's attitude, that it ignores the proper role of the 
states as the agency attempts to expand its authority. The EPA 
seems to have a view that the states are merely a vessel to 
implement whatever policies and regulations the administration 
sees fit, regardless of the wisdom, cost, or efficiency of such 
measures. Fortunately, for the states, that is not what the law 
allows. Congress clearly intended for the states to have 
primacy in the areas of environmental regulation, and for the 
EPA to work with the states closely to regulate those issues. 
However, the EPA is attempting to usurp the role of the states, 
all in the name of imposing the administration's anti-fossil 
fuel mentality.
    The extent and form of greenhouse gas regulation is 
important to the states. The states have the experience, 
expertise, and ability to regulate those issues, and must be 
allowed to play their proper roles established by Congress. We 
hope that by making our concerns known here today and beyond 
that the EPA will respect the principles of cooperative 
federalism, something that has been talked about here today, 
that are all set forth in the Clean Air Act, and take a more 
common sense approach to any new regulations, and include the 
states in that process. If not, we will attempt to obtain 
relief from the courts, and we will certainly welcome 
Congressional oversight being brought to bear on these federal 
agencies.
    I look forward, Mr. Chairman, to answering any questions 
you may have today and others, and thank you for the time this 
morning.
    [The prepared statement of Mr. Pruitt follows:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Whitfield. Thank you, Mr. Pruitt.
    Mayor Hale, you are recognized for 5 minutes, and just be 
sure to put your microphone on so we can hear you.

                  STATEMENT OF HON. HENRY HALE

    Mr. Hale. Chairman Whitfield, and members of this 
committee, it is a great honor to sit here today and testify 
before the committee about the Southwestern Electric Power 
Company, a unit of American Electric Power, which began serving 
customers back in 1912, made the announcement in 2006 to build 
a power plant in Southwest Arkansas, the John W. Turk Plant, 
which later became the single largest project ever constructed 
in the county where I live, with a capital investment of $1.8 
billion. Hempstead County, which had been around for 195 years, 
founded in 1818, is eternally grateful to SWEPCO and AEP for 
their decision to build just a mile or two up the road from my 
hometown. The plant went into commercial operation on December 
the 20th, 2012.
    SWEPCO went to great length to overcome major environmental 
and legal challenges in building Turk, one of the cleanest, 
most efficient coal fueled electric generating plants in North 
America. It was the culmination of 6 years of successful 
engineering, construction, legal, and regulatory effort. Turk 
is an example of how well planned teamwork and coordination can 
make a project of this magnitude come together. It is the first 
power plant in the U.S. to use ultra-supercritical steam 
technology, which requires a plant to use less coal, thereby 
lower the level of emissions, including carbon dioxide, sulfur 
dioxide, nitrogen oxide, and mercury.
    The Turk plant is a 600 megawatt facility that provides 
operation 24 hours a day to meet the growing electrical needs 
of SWEPCO and co-op customers in Arkansas, Louisiana, and 
Texas. SWEPCO realizes how important it is to plan for the 
future energy supply for our states, community, and customers.
    The Turk plant is good for the local economy. While America 
was enduring difficult economic times, the Turk plant provided 
construction jobs for a peak of over 2,000 workers, and bring 
tax revenue to local government. Construction alone generates 
$38 million in sale and property revenue. The plan has 109 
permanent jobs, with an annual payroll of $9 million. The plant 
pays about $6 million in annual school, and county, and 
property tax. I certainly appreciate the tax support generated 
to the local school district, which I am an employee.
    But it is not about the plant. SWEPCO gave the local 
college, the University of Arkansas Community College at Hope, 
a $1 million grant to start up a power plant technology degree 
program early on in the process. Hundreds have graduated, and 
many are able to get jobs at Turk Plant, enhancing education in 
a part of the State of Arkansas that desperately needed it in 
recent years. The Turk team impacts the local community in a 
positive way with toy drives, park improvement for nearby Hope, 
Fulton, and McNab. Construction workers and SWEPCO employees 
also, on site, gave their time, money, and materials to improve 
the lives of others in the area.
    The Turk Plant has won several awards this year, including 
the Edison Award, from Edison Electric Institution, the 2013 
Plant of the Year Award from Power Magazine, and 2012 Project 
of the Year in the Best Coal Fuel Project category from Power 
Plant.
    I thank you for allowing me to speak to you this day. Thank 
you.
    [The prepared statement of Mr. Hale follows:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Whitfield. Mayor, thanks so much.
    And, Mr. Campbell, you are recognized for 5 minutes.

                   STATEMENT OF TONY CAMPBELL

    Mr. Campbell. Chairman Whitfield, Ranking Member McNerney, 
and members of the subcommittee, thank you for the opportunity 
to appear before you today. My name is Tony Campbell. I am 
President and CEO of East Kentucky Power Cooperative, and I 
have served in that position since 2009.
    East Kentucky Power Cooperative is a generation and 
transmission cooperative based in Winchester, Kentucky. East 
Kentucky Power Cooperative, and its 16 owner-member 
cooperatives, exist to serve the end consumer. East Kentucky 
Power Cooperative generates electricity at three base load 
power plants fueled by coal, and one peaking plant fueled by 
natural gas. More than 90 percent of the power that is 
generated is fueled by coal. East Kentucky Power Cooperative's 
total generating capacity is about 3,000 megawatts, and we 
employ about 700 employees. More than one million Kentucky 
residents and businesses in 87 counties depend on the power we 
generate. We also serve some of the neediest Kentuckians. The 
household income of Kentucky Cooperative members is 7.4 percent 
below the state average, and 22 percent below the national 
average.
    East Kentucky Power Cooperative supports the bipartisan 
Whitfield-Manchin discussion draft bill as common sense 
legislation that provides important guidelines and parameters 
for EPA to follow in developing greenhouse gas regulations for 
new and existing power plants without causing irreparable harm 
to the U.S. economy. This bipartisan bill is badly needed to 
ensure EPA does not promulgate a rule that jeopardizes the 
country's energy future, puts electricity reliability at risk, 
and severely harms the economy.
    While East Kentucky Power Cooperative sympathizes with the 
need to address climate change issues on a global scale, we 
should not impose immediate changes to this country's electric 
infrastructure, forcing utilities to rely on undeveloped 
technologies as the answer. That risk may prove greater than 
the issue it was intended to solve.
    Congress never intended for the Clean Air Act to regulate 
greenhouse gas emissions from power plants. This fact is 
illustrated by EPA's attempts to promulgate greenhouse gas new 
source performance standards under Section 111. The 
administration's proposed greenhouse gas performance standards, 
first issued in April 2012, demonstrated unequivocally that the 
administration seeked to end new coal generation through 
regulation. In that proposal, EPA chose not to establish a 
separate standard for coal-fired units. Instead, it lumped coal 
units together with natural gas fired units into a new new 
source performance standard subcategory, and established a 
greenhouse gas emission limit that only some natural gas 
combined cycle units can achieve.
    These proposed Section 111 regulations have already had a 
chilling impact on electricity generation in the U.S. While the 
current low price of natural gas has contributed to the decline 
in coal-fired electricity generation, and the resurgence of 
natural gas fired units, EPA's new regulations are an equally 
important factor in this trend. In recent years, electric 
utilities have faced a daunting array of environmental 
regulations on all fronts, air, water, and waste, that have 
contributed to the widespread coal-fired unit retirements. Coal 
fired generation is essential to ensure energy diversity, and 
to keep the electricity prices low.
    There is also a significant national security issue that I 
would like to highlight for you. In addition to the realities 
and risks of rising natural gas prices, it is simply not 
feasible or prudent for the nation's entire existing coal-fired 
generation capacity to be transitioned to natural gas. Natural 
gas generation requires transportation from natural gas wells 
to power plants by an intricate network of interstate pipelines 
and compressor stations that allow the gas to be constantly 
pressurized. These requirements raise not only infrastructure 
concerns, but also national security concerns. If a compressor 
station were to fail, or become the victim of a terrorist 
attack, the nation's electric grid could be placed in jeopardy.
    When these natural gas supply requirements are contrasted 
with coal, which is plentiful in supply, can be stockpiled at a 
30 to 45 day supply, and can be transported by several 
different methods without the use of interstate pipelines, it 
makes no sense to require wholesale conversions from coal-fired 
generation to natural gas, particularly in areas of the country 
that are rich in coal resources, and are not located in close 
proximity to natural gas wells.
    Coal fired power plants in the U.S. only contribute 
approximately four percent of the global greenhouse gas 
emissions. The U.S. power fleet has already reduced 
CO2 emissions by 16 percent below 2005 levels, with 
CO2 from coal-fired power plants reduced by almost 
25 percent. The EPA should allow coal-fired power plants to 
continue to make these reductions in a reasonable manner, and 
in response to market pressures, instead of by regulatory fiat.
    Furthermore, the regulation at issue will not have a 
meaningful impact on global climate change. The minimal impact 
that these regulations will have on the environment further 
underscores the need for all greenhouse gas regulations to be 
economically achievable. While East Kentucky Power Cooperative 
has significant concerns with the proposed regulations of the 
new sources, particularly the assumptions on carbon capture and 
sequestration technology, our greatest concern relates to 
regulations for existing sources.
    Pursuant to the consent decree with the EPA, East Kentucky 
Power Cooperative has invested almost $1 billion in 
retrofitting our existing coal-fired power plants over the last 
decade with modern air pollution control equipment. In 
addition, we have invested more than one billion, and installed 
two new cleanest coal-fired units in the country. An existing 
source rule that requires carbon capture and sequestration 
would leave East Kentucky Power Cooperative with no choice but 
to convert these units to natural gas, essentially wasting the 
extensive capital investment that we have been forced to make 
to lower pollutants from the coal-fired units. This would 
result because there is currently no demonstrated technology 
that would be able to control greenhouse gas emissions.
    Mr. Whitfield. Mr. Campbell, your time really has expired. 
If you would just summarize real quick?
    Mr. Campbell. I will summarize. Thank you, Mr. Chairman. To 
summarize, East Kentucky Power Cooperative appreciates the work 
of this committee, and the opportunity to present our views of 
the EPA's regulations on greenhouse gas from power plants. I 
would like to reaffirm East Kentucky Power Cooperative's 
support for the Whitfield-Manchin discussion draft bill.
    [The prepared statement of Mr. Campbell follows:]
    
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    Mr. Whitfield. Thank you very much.
    And, Ms. Tierney, you are recognized for 5 minutes.

                 STATEMENT OF SUSAN F. TIERNEY

    Ms. Tierney. Thank you, Mr. Chairman. Representative 
McNerney, and members of the subcommittee, I appreciate the 
chance to be here. I understand the premise for the bill you 
are considering today is a concern that the EPA's actions will 
have the effect of barring the ability of coal in new power 
plants and existing power plants, and will have a negative 
impact on electricity consumers and the economy.
    In light of the market realities that we are experiencing 
in the United States today and ahead, I think this concern is 
misplaced for several reasons. First, various abundant domestic 
energy resources are competing to supply affordable, reliable, 
and clean electricity supply. That is happening now, and it is 
good for Americans.
    Second, EPA's taking action under Section 111 will help to 
clarify the rules of the road under which coal and natural gas 
will compete with each other, and with other power supplies and 
technologies in the future. Having clear rules and regulatory 
stability will help a positive investment environment at a time 
when the nation stands to spend up to a trillion dollars on new 
generating capacity in parts of the country.
    Third, putting the rules in place will help EPA address 
pollutants that have been found to threaten public health, and 
the welfare of current and future generations, and they will 
allow a pathway for coal and natural gas to be part of our 
vibrant energy supply. EPA's action under Section 111 is 
important for public health, and is consistent with domestic 
energy resource development and use as part of a reliable, 
affordable, competitive clean energy supply, and there are 
several reasons why I reached that opinion.
    First, coal has been the dominant fuel, and remains the 
dominant fuel, used to generate electricity in the United 
States in no small part because of its affordability in its 
price. Second, the level of coal used has varied dramatically 
over the years as new developments in technologies and fuel 
developments in prices have brought about changes in the supply 
mix, including nuclear power, renewable energy, and much more 
natural gas.
    Until recently, these economic conditions greatly favored 
the use of coal, but the shale gas revolution has fundamentally 
changed that situation. This other abundant domestic supply is 
now economically accessible, can supply 100 years at today's 
levels of consumption, and it can play an important role in 
helping the U.S. reduce greenhouse gas emissions from power 
supply. Abundant domestic supply of renewable energy also can 
supply these outcomes.
    Currently, low gas prices are putting economic pressure on 
coal facilities. We see the forward natural gas prices 
continuing to make it attractive to invest in natural gas, as 
compared to coal-fired generator facilities. This economic 
pressure is lowering, not raising, electricity prices, and has 
been the case around the country, and there is more market 
pressure on coal as a result of that. This has contributed to 
the announcements of retirements of some of the oldest and 
least efficient coal-fired generating units, and the economics 
of over 100 power plants that had been proposed to be built on 
coal have been gradually cancelled because of those poor 
economic alternatives. Today the fuel of choice is natural gas 
for power generation, as well as renewable power projects. And, 
as we have heard today, it is away from coal.
    The bottom line for electricity market fundamentals is that 
coal and natural gas are in strong competition, will remain so. 
They were at head to head to competition, in terms of market 
shares, a year ago, in 2012, and coal has regained a small 
portion of the competitive share that gas had taken away. These 
market dynamics have been important for helping the United 
States and the electric industry provide power reliably and 
affordably to consumers at low prices, and that will continue. 
They are affording the U.S. the opportunity to diversify, not 
otherwise, its overall mix of supplies.
    The industry's responses to the EPA regulations will 
stimulate much needed economic activity and modernization of 
the electric system. Again, the investors in this industry need 
certainty, and the EPA greenhouse gas rules are providing that, 
in light of the fact that they have been expected for many 
years, and are on their way. The recent changes in coal use 
have taken place at a time when production has remained 
relatively strong, in large part because of the export growth 
that we have seen.
    And, finally, let me just summarize by saying that the 
EPA's 111 regulations for new and existing power plants will 
allow flexibility, and pathways for coal and gas to play an 
important role going forward in our electricity supply.
    Thank you.
    [The prepared statement of Ms. Tierney follows:]
   
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    Mr. Whitfield. Thank you.
    And, Mr. Hawkins, you are recognized for 5 minutes.

                   STATEMENT OF DAVID HAWKINS

    Mr. Hawkins. Thank you, Mr. Chairman. I would like to offer 
a few facts for the subcommittee's consideration.
    First, if we continue to use our atmosphere as a dump for 
carbon pollution, we will wreck the climate. Now, coal-fired 
power plants are the largest carbon pollution source in the 
United States, and more than 40 years ago Congress authorized, 
in the Clean Air Act, EPA to protect the public against harmful 
air pollution, and Supreme Court has confirmed that that 
authority includes the authority to regulate harmful carbon 
pollution.
    EPA is moving ahead to set sensible standards for carbon 
pollution from power plants, and it is following an approach 
that has been used for 43 years by seven Presidents prior to 
President Obama. President Nixon, Ford, Carter, Reagan, George 
H.W. Bush, Clinton, and George W. Bush, all of those Presidents 
presided over EPA standard setting that looked at available 
technologies to control a pollution stream, looked at whether 
those technologies were transferable, or already applied in the 
category being considered for regulation, and looked at what 
the costs would be, and whether those costs would be 
reasonable.
    That is exactly what EPA has done for the proposed standard 
for new coal-fired power plants, and it has based that 
technology on gas CO2 capture systems, which have 
been demonstrated for decades in other major industry 
categories. The power sector has not used that technology yet, 
but that is not an argument against EPA's proposed standards, 
for the power sector did not use SO2 scrubbers, NOx 
controls, or mercury controls until government required them to 
use those controls.
    Now, a few words about costs. Partial carbon capture, which 
is the basis for EPA's standard for new coal plants, can easily 
achieve that standard with reasonable added costs. What was 
EPA's basis for that? Well, it looked at a number of Department 
of Energy studies, and projected that a new coal plant with 
partial carbon capture would have electricity production costs 
about 20 percent higher than a coal plant with no carbon 
capture controls. Now, the cost difference would be much less 
if revenues from enhanced oil recovery sales were included.
    EPA has also announced a schedule for guidelines to control 
carbon pollution from existing power plants, working in 
cooperation with state clean air officials. NRDC's own 
analyses, using an accepted government and industry model, 
demonstrates that we can achieve significant reductions in 
carbon pollution from existing power plants with benefits of 
about 25 to $60 billion annually, compared to compliance costs 
of about $4 billion. Our approach would not require the use of 
carbon capture on existing plants, though that, or any other 
measure that would reduce carbon pollution, could qualify as a 
compliance measure.
    Now, the draft legislation by Representative Whitfield and 
Senator Manchin would repeal EPA's carbon pollution authority 
for existing power plants, and essentially would allow the 
power sector to dictate what standards could be adopted for new 
coal plants. That is not the way the Clean Air Act was written. 
It is not the way any of the seven Presidents before have 
implemented it. This legislation would harm Americans by 
allowing excess carbon pollution from power plants that would 
stay in the air for centuries, disrupting the climate that 
sustains our civilization.
    Ironically, the legislation would not improve the lot of 
coal producers or communities in coal country. Rather, it would 
destroy power sector interest in deploying carbon capture and 
storage systems, the one technology that could provide a 
pathway for a more sustainable use of coal.
    Bills to cut Clean Air Act protections against carbon 
pollution will not solve the coal sector's problems. Power 
companies have choices other than coal, and as long as carbon 
policy remains temporarily locked in a closet, the industry 
will look elsewhere for their power investments. It makes no 
sense to invest billions of dollars in a new coal plant when 
there is no resolution of the rules that will apply to its 
carbon pollution. Congress cannot make this problem disappear 
by forcing EPA to close its eyes.
    Thank you very much.
    [The prepared statement of Mr. Hawkins follows:]
    
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    Mr. Whitfield. Thank you, Mr. Hawkins.
    And, Mr. Cichanowicz, you are recognized for 5 minutes.

               STATEMENT OF J. EDWARD CICHANOWICZ

    Mr. Cichanowicz. Chairman Whitfield, and members of the 
subcommittee, thank you for the opportunity to speak this 
morning. For more than 4 decades I have designed and tested 
environmental controls for fossil power stations. This morning 
I will summarize my opinion on the status of carbon capture and 
sequestration, and present a few graphics to show what the 
design challenges are.
    CCS differs from all controls previously adopted to power 
stations to date. The amount of CO2 removed from the 
gas stream is at least 15 times the amount of sulfur dioxide 
that is removed by flue gas desulfurization when using a high 
sulfur coal. The CO2, once captured, in most cases 
must be transported at least dozens of miles, and the ultimate 
sink is well below the Earth's surface. All three of these 
steps have yet to be conducted at full scale on a coal-fired 
power station.
    Let us look at a commercial design for one of the three 
options to control CO2. Exhibit 1 shows the 
preliminary design of a 750 megawatt power station equipped 
with post-combustion control. This station was proposed, but 
not actually built. The equipment in red shows the boiler and 
steam turbine that produce the power. Encircled in green are 
the conventional controls for the emissions of sulfur dioxide, 
nitrogen oxides, particulate matter, and trace species, such as 
mercury. Encircled in blue is the CO2 capture 
equipment. The array of towers on the right absorbs 
CO2, and those on the left regenerate 
CO2. What is noticeable is the size of the 
equipment. It is much larger than the conventional 
environmental controls. You can appreciate why it is important 
to get this design right, and get it right the first time.
    The problem is that we have limited data from which to base 
a design, so we must do three things with our data. The first 
is to scale results from small pilots and early demonstrations 
to enable designing a large commercial unit. The second is to 
generalize results, or extend what we learned with one coal at 
one site to the variety of coals and sites that we will 
encounter around the U.S. And the third, most important, is to 
make sure that all the individual components work together.
    Exhibit 2 helps explain a critical step in scaling. Exhibit 
2 shows the largest pilot plant operating in the U.S. right now 
that is testing this particular process. It is at Alabama 
Power's Plant Barry. This pilot plant treats the gas flow equal 
to about 25 megawatts of capacity. The test towers for 
CO2 absorption and regeneration are designed to look 
like the core, like an apple core, from a commercial reactor. 
So if we were designing a system for Exhibit 1 right now, we 
would scale this Barry pilot plant results by a factor of 37. 
For some steps, this is straightforward, and can be done with 
confidence, but for many steps, it cannot be done. There are 
two other methods to capture CO2, the pre-combustion 
method that is used with gasified coal, and oxycombustion. I 
believe all three options, given time, have an equal chance to 
be commercially proven.
    There are additional pilot plants and demonstrations coming 
on line in the next few years, but their numbers are few, and 
the results will take a while to acquire. Exhibit 3 shows a 
timeline of pilot plants, small commercial, and demonstration 
units that I think will influence CCS feasibility in the U.S. 
Most of these are in North America, but several are in Europe. 
The timeline shows the date when operations begin, and, on the 
vertical axis, it shows the size of the test or demonstration 
unit, in terms of the equivalent capacity.
    I have included both pre-combustion and oxycombustion 
options on the chart, and these are distinguished by different 
symbols. I have also distinguished between projects that are 
operating or under construction. Those are the ones with the 
symbols filled in, which I understand you can't see real well, 
but they tend to be more in the lower left. The projects that 
are not yet financed are represented by the open symbols. 
Although the Great Plains Synfuels Unit has operated with pre-
combustion control for years, we need to generalize results 
beyond the lignite fuel that it uses and the co-production of 
chemicals and power.
    The final graphic highlights the utility demonstrations in 
the circle on the right. Exhibit 3 shows that only a few 
demonstration projects will be operating in the next several 
years. And, please, recognize the importance is not the start 
date, but the date when we acquire experience that we can use 
in coming up with a design, and that will be several years from 
startup.
    There are equally challenging issues concerning 
CO2 sequestration or re-use. These include, for 
example, the distribution of CO2 sinks throughout 
the U.S., the predicted 5 to 10 year period to confidently map 
the details of the site, and the potentially confounding role 
of property rights. My written testimony further addresses 
these topics.
    In summary, CCS, at some time in the future, may prove a 
feasible technology to control CO2 emissions. In my 
opinion, we need until about 2020 to make this assessment with 
a reasonable degree of confidence. CCS is not commercially 
proven now. For it to be so, we need to populate that circle on 
the right with many more symbols, and the need to be closed, 
showing financed operating units not open.
    Thank you for your time.
    [The prepared statement of Mr. Cichanowicz follows:]
    
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    Mr. Whitfield. Thank you very much.
    And, Dr. van der Vaart, you are recognized for 5 minutes.

              STATEMENT OF DONALD R. VAN DER VAART

    Mr. van der Vaart. Good morning, Chairman, and members of 
the committee. I am with the State of North Carolina. Thank you 
for the----
    Mr. Whitfield. Your microphone----
    Mr. van der Vaart. Sorry. I am with the State of North 
Carolina, and I appreciate the opportunity to testify today. 
Before I comment on the specifics of EPA's use of Section 111 
of the Act, I wanted to note issues that my comments will not 
address.
    First, my comments are not about the scientific uncertainty 
of the impact anthropogenic greenhouse gas emissions have on 
climate. My comments do not address the accuracy or inaccuracy 
of the IPCC models relied upon by the EPA, or the divergence 
between the models' predictions and the actual temperatures 
over the past 15 years. These issues are critical to any 
decision on whether, in the absence of Congressional 
authorization, the EPA should regulate greenhouse gas emissions 
from stationary sources.
    Against this background, I offer three specific concerns 
about EPA's current actions to regulate greenhouse gas 
emissions from fossil fuel fired electric generating units. 
First, EPA is required by Congress to base any new source 
performance standard on the best system of emission reductions 
that the Administrator determines has been adequately 
demonstrated. The EPA has recently proposed NSPS for utility 
units, assumed carbon capture and storage, or CCS, has been 
adequately demonstrated. One need only look at the yet to 
operate Kemper County Energy Facility in Mississippi, with its 
substantial governmental funding, as prima facie evidence that 
the EPA's conclusions are unsupported.
    Even if a state is blessed with the requisite geologic 
formations, facilities would be required to build miles of 
pipeline simply to reach the formation. EPA's proposed approach 
will pit the reliability of this nation's electricity supply 
against the considerable uncertainty of environmental 
permitting of these pipelines, superimposed on an unproven 
technology of CCS. Sound science, rather than speculation, 
should drive environmental regulation.
    Second, the traditional function of Section 111 was to 
protect, or grandfather, existing facilities to prevent their 
migration to less polluted areas of the country. The 1990 
amendments to 111(d) were true to this tradition by prohibiting 
the overlap of 111(d), for existing sources, with two other 
programs in the Act. Section 111(d) prohibits EPA from 
regulating pollutants from source categories regulated under 
Section 112. In 2011, EPA issued regulations under Section 112 
applicable to fossil fuel fired electric generating units, 
thereby foreclosing regulation under Section 111(d).
    In the past, EPA has suggested that there is a conflict in 
the statutory language of Section 111(d) with regard to whether 
the 112 prohibition was pollutant specific or source category 
specific. This is a false choice, as there is no internal 
conflict in Section 111(d). Prior to 1990, Section 112 was 
pollutant specific. In 1990, the structure of Section 112 was 
changed from one that regulated pollutants to one that 
regulated source categories. To prevent overlap with the newly 
structured 112 program, 111(d) was augmented to exclude not 
only Section 112 pollutants, but also Section 112 regulated 
source categories. The two exclusions are entirely self-
consistent, and should not be used to invoke Chevron deference.
    Section 111(d) also prohibits regulating pollutants listed 
under Section 108. A pollutant must be listed under Section 108 
when three criteria are satisfied. Those criteria were 
satisfied when EPA published its endangerment finding under 
Section 202. While North Carolina takes no position on whether 
EPA should establish NAAQS for greenhouse gases, all of the 
conditions necessary to list greenhouse gases under Section 108 
have already been met. The listing in itself prohibits EPA from 
regulating greenhouse gas emissions under Section 111(d). 
Indeed, EPA may already be under a pre-existing non-
discretionary duty to issue criteria and simultaneously propose 
a natural ambient air quality standard for greenhouse gases.
    Finally, in the case where EPA does have authority to 
establish emission guidelines under Section 111(d), that 
authority is limited. EPA is not authorized to impose emission 
standards on existing sources. Rather, EPA can only establish a 
unit specific guideline that describes what control 
technologies have been demonstrated. Once EPA provides that 
guideline, Section 111(d) allows states to develop unit 
specific emission standard after considering many factors, 
including the cost, physical constraints on installing 
controls, and the remaining useful lifetime of the emission 
units.
    The plain language of the Act, as well as the legal 
precedent, precludes EPA and states from designing a standard 
that relies on reductions made outside of the emission unit. 
Any flexibility in compliance with a standard based on a 
specific emission standard resides with the states, who have 
the primary responsibility for implementation of this program.
    Thank you.
    [The prepared statement of Mr. van der Vaart follows:]
    
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    Mr. Whitfield. Thank you very much.
    And, Mr. Eisenberg, you are recognized 5 minutes.

                 STATEMENT OF ROSS E. EISENBERG

    Mr. Eisenberg. Thank you. Good afternoon, Mr. Chairman. 
Members of the subcommittee, thank you for having me today, on 
behalf of the NAM.
    We are at a crossroads on energy and climate. Our nation is 
truly awash of every single type of energy, be it oil, gas, 
coal, nuclear, renewables, energy efficiency. This robust all 
of the above portfolio and policy, and our commitment to it, is 
helping fuel a manufacturing resurgence in this country. It is 
a good thing.
    However, the very same government that is presiding over 
this, and is benefitting from this, is perilously close to 
enacting policies that would stop us from using most of this 
energy, and many of these decisions would be irreversible, and 
could limit manufacturers' long term competitiveness.
    Now, manufacturers are committed to protecting the 
environment through greater environmental sustainability, 
increased energy efficiency and conservation, and by reducing 
greenhouse gas emissions. We believe that policies to reduce 
greenhouse gases, whether legislative or regulatory, must be 
done in a thoughtful, deliberative manner, and transparent 
process that ensures a competitive, level playing field for 
U.S. companies in the global marketplace. And it should focus 
on cost effective reductions, be implemented in concert with 
all major emitting nations, and take into account all relevant 
greenhouse gas sources and sinks.
    Unfortunately, our government has settled on a climate 
policy that really meets none of these objectives, regulation 
under the Clean Air Act. But as inflexible and unforgiving as 
the Act tends to be with respect to greenhouse gases, many of 
the choices that EPA is making to implement the Act for 
greenhouse gases are equally problematic.
    We know, from the President's Climate Action Plan, that he 
believes the only way to reduce greenhouse gases in the U.S. is 
to stop using fossil fuels. We disagree. We believe that we can 
use fossil fuels, while also innovating and manufacturing the 
technologies needed to limit the resulting emissions. However, 
EPA's greenhouse gas NSPS regulation set us on a clear path 
toward elimination, and nothing else. And so what really should 
be a policy on climate winds up looking suspiciously like a 
means to an end.
    The standard for new power plants bans conventional coal-
fired power, based on EPA's assertion that partial CCS has been 
adequately demonstrated, taking into account costs and energy 
requirements. We know this isn't true. We have talked about it 
a lot today. While we believe CCS holds great promise as a 
technology, and should happen, it is simply not ready to be 
deployed the way the EPA insists it will be in the near term. 
And because it is not commercially available, this, and all 
future NSPS for greenhouse gases are essentially a line drawing 
exercise in what energy we can and we can't use. Right now EPA 
is drawing that line to eliminate coal, and to allow everything 
else. But these standards are reviewable every 8 years, which 
means 8 years from now EPA will be redrawing that line, and the 
same arguments being used to crowd out coal today could very 
well be used to do the exact same thing to natural gas.
    Regulations that result in the limitation of coal or gas 
could pose serious problems for manufacturers. Coal was 
responsible for 37 percent of our nation's electricity in 2012, 
followed by gas, at 30 percent. These fuels will remain the 
dominant sources of energy in the U.S. for many years, and the 
nexus is even more profound at the state level. States where 
manufacturing is heaviest, places like Indiana, Michigan, 
Louisiana, Kentucky, Kansas, Pennsylvania, Ohio, they use a lot 
of coal, and they use a lot of natural gas.
    And so now EPA is going to have to draw that line not only 
on the new fleet, but on the existing fleet of power plants in 
a little more than 6 months. Then it will have to do it for 
other industrial sectors, like refineries and chemical 
manufacturing, natural gas drilling, iron and steel, aluminum, 
cement, pulp and paper, glass, food processing, and many 
others. That is why we frequently say that manufacturers will 
be hit twice by these regulations, both as users of the energy 
being regulated, and as industries considered next in line to 
receive similar regulations from EPA on their own plants.
    And that is why the choices EPA is making in this rule 
matter. The legal issues, like when a technology is adequately 
demonstrated, and what constitutes significant endangerment, 
matter beyond just this rule, because every sector has a 
stretch technology that doesn't make a lot of financial sense 
right now, but would theoretically reduce emissions. So is this 
now what NSPS is going to require for each of them?
    Now, I suspect that the members of this subcommittee, both 
Republican and Democrat, would prefer that EPA take a different 
approach to greenhouse gases than it has done so far. I still 
believe you can do something about it. We at NAM support the 
Whitfield-Manchin bill, which allows the EPA to regulate 
greenhouse gases, but ensures that the regulations are done 
smarter and better.
    Now, opponents are calling this a repeal bill. That is not 
true. This bill doesn't repeal anything. For new power plants, 
it requires separate standards for coal and gas, with sub-
categorization. It provides a reasonable path forward for CCS, 
which allows the EPA to require it, but only when it is truly 
ready. And, finally, it allows the EPA to craft rules or 
guidelines for existing power plants. It doesn't stop them from 
doing it. It just gives Congress a say over when they are OK, 
and when they can say go.
    The Whitfield-Manchin bill, at the end of the day, would 
give manufacturers regulatory certainty by preserving an all of 
the above policy. Had the proposed rule that we are discussing 
today looked like that portion of the Whitfield-Manchin bill, I 
think we are having a different conversation. By enacting this 
bill, Congress can steer the EPA toward an end result that 
accomplishes long term meaningful reductions in greenhouse gas 
emissions, while preserving a health and robust manufacturing 
sector.
    Thanks. I look forward to your questions.
    [The prepared statement of Mr. Eisenberg follows:]
    
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    Mr. Whitfield. Well, thank you, and thank all of you for 
taking time to be with us, and for your testimony.
    Attorney General Pruitt, Ms. McCabe talked about the 
cooperative spirit with the states, and I know that many states 
that I have heard from are quite concerned about EPA setting 
standards and not working in a cooperative way, becoming more 
and more aggressive with states. What has your experience been? 
Would you classify your experience with the EPA on recent rules 
and regulations in a cooperative way, or has it been an 
adversarial way? How would you describe it?
    Mr. Pruitt. Well, Mr. Chairman, two responses. I think, 
under 111(d), it is very clear that Congress intended that 
cooperative federalism be alive and well, as it relates to that 
particular section. Our experience with the Regional Haze rule 
that I mentioned in my comments demonstrates that the EPA has 
taken a different approach respecting the role of the states in 
cooperative federalism.
    Under that rule, as you know, the states are authorized to 
determine the methodology, the process, the plan, to meet the 
guidelines that you, in Congress, and the agency has set, which 
is natural visibility by the year 2064. Oklahoma did just that 
in the year 2010, and beat the deadline by decades. But the EPA 
rejected the plan, and simultaneously endeavored to force upon 
the State of Oklahoma a federal plan that would cost $2 
billion, primarily because, Mr. Chairman, in my estimation, 
fuel diversity was maintained. Coal plants, along with natural 
gas, were maintained. Fossil fuels were being utilized in the 
plan, and the EPA didn't like that, and rejected the plan.
    So, though we have talked a lot about that today, and Ms. 
McCabe made reference to cooperative federalism, I guess I will 
draw upon President Reagan's comment in the '80s about trust, 
but verify, with respect to foreign policy. The states have 
routinely endeavored to trust and work with the EPA, but, in 
response, particularly around the Clean Air Act, and the 
Regional Haze Program, it has not been demonstrated that they 
are, in fact, respecting the states' role.
    Mr. Whitfield. Yes. Well, thank you, Mr. Pruitt.
    Mr. Hawkins, and Mr. Eisenberg, I want to thank you for 
your comment, but you used the word repeal, that we were 
repealing their authority, the EPA's authority, under our 
legislation, and we actually don't repeal it. We set some 
parameters, and, on the existing plants, the only power that 
Congress would have would be to set the effective date.
    But in the larger context, all of us understand that coal 
is not being used as much today, certainly for new plants, 
because natural gas prices are so low. We definitely understand 
that. And I think Mr. McKinley made a great point. 805 billion 
tons of CO2 emissions each year, about 3.5 percent 
of that is man-made, and fossil fuel, U.S. coal plant 
emissions, amounts to, like, \2/10\ of a percent.
    So then it raises the question of moving forward, we live 
in a very unpredictable world. We don't know what is going to 
happen. Why should the U.S. be the only country in the world 
that has standards so stringent on emissions that practically 
you cannot build a new coal powered plant? As I said in my 
opening statement, Europe is closing down 30 gigawatts of 
natural gas plants, mothballing them, because of high natural 
gas prices, and they are building more coal powered plants.
    And so why are we taking these extreme efforts that would 
basically eliminate coal from new opportunities only in 
America? And I would like to hear all of you, if you want to 
make it brief. Yes, Mr. Hawkins, you go right ahead.
    Mr. Hawkins. Well, to begin, the United States is not the 
only country that is requiring carbon capture performance on 
coal plants. The United Kingdom does, and our neighbor to the 
north, Canada, does. Both of those countries have in place 
rules and----
    Mr. Whitfield. But are the emission standards as stringent 
as here?
    Mr. Hawkins. The Canadian standards----
    Mr. Whitfield. Could you build a Turk plant in Canada, or--
--
    Mr. Hawkins. The Canadian standards apply to new plants and 
to existing plants, after they reach 40 years of life.
    Mr. Whitfield. Well, let me just say, and we can talk about 
this some more, I have had some discussions with people about 
that, and it is my understanding that they are significantly 
different. But I would just tell you, when \2/10\ of the 
emission comes from coal plants in all the emissions worldwide, 
this is, in my view, a pretty extreme position. All we are 
saying is, with our legislation, we want it to be an option 
that people would have the opportunity to utilize it.
    Mr. Hawkins. Mr. Chairman, may I say one word about natural 
versus man-made? The statistics that you are citing are 
confusing what are natural fluxes of hundreds of millions of 
tons that go out of the ocean every year, hundreds of billions 
of tons that go back into the land every year. There are no net 
emissions from those huge transfers. The only net emissions are 
caused by human activities, and man is responsible for 100 
percent of the increased emissions. These natural fluxes have 
nothing to do with----
    Mr. Whitfield. Well, all I am saying is that the 
Intergovernmental Panel on Climate Change, the Energy 
Information Administration, and EPA have said 803 billion tons 
total emissions, and man-made, 3.5 percent.
    Mr. Hawkins. Yes, but they include equal amounts out and 
equal amounts in from the natural system. So those natural 
systems that are included in those 800 billion add nothing to 
the atmosphere.
    Mr. Whitfield. So do you think we might be able to anything 
with our legislation that you will support us?
    Mr. Hawkins. To do what, sir?
    Mr. Whitfield. Do you think we could do anything with our 
legislation in which you would support us?
    Mr. Hawkins. With your legislation? Yes. You could change 
it around so that you would return to some of the provisions 
that were in the Waxman-Markey bill, which this committee did 
report out, and this House did approve, with seven or eight 
Republican votes at the time. You could turn it into a program 
that would actually deploy carbon capture and storage. And if 
you did, we would support it.
    Mr. Whitfield. Thank you.
    Mr. McNerney, you are recognized for 5 minutes.
    Mr. McNerney. I thank the Chairman, and I thank all the 
witnesses. I know it is a long trip, it is a long day, and it 
is an issue with a lot of different perspectives.
    In 2011, I am going to direct a question to you first, Ms. 
Tierney, the American Electric Power proposed to develop a 
large CCS plant in West Virginia, but they had to cancel 
because, as the CEO explained, without federal carbon pollution 
standards, it couldn't get recovery for that investment. You do 
work with executives. Is that a typical experience?
    Ms. Tierney. Yes. It is common, if a regulated utility does 
not see that they are required to do something, they have a 
difficult time making the case before regulators about a cost 
associated with that. So that was what was behind the AEP 
decision to cancel that project.
    Mr. McNerney. OK. One more question. In your testimony you 
mentioned that the EPA rules will address public health and 
help ensure that coal and natural gas remain viable. Would you 
expand on that a little bit?
    Ms. Tierney. Yes. Right now it is clearly the case that, as 
I mentioned, the investment choices that are being made by the 
electric industry are for renewables and natural gas projects. 
Coal is just simply too expensive, too large a capital 
investment to make, and too risky, with regard to what will 
happen with controls on carbon in the future.
    So having certainty, such as that which EPA will be 
introducing with their guidance on existing rules, excuse me, 
guidance on existing plants, and their regulations on new 
plants, will provide a framework under which people can make 
investments, push technology forward, so that eventually we can 
find a time when coal and natural gas, with carbon capture and 
sequestration, can go forward. And I am speaking of coal when I 
say that.
    Mr. McNerney. OK. Mr. Hawkins, you mentioned that the 
benefits basically outweigh the costs. I think you mentioned a 
$20 billion benefit for a specific case, compared to a $4 
billion cost. Could you describe that a little bit?
    Mr. Hawkins. Yes. This was an analysis that NRDC did of an 
approach to regulating existing power plants, and those 25 to 
$60 billion benefits were a combination of health benefits 
associated with reduced soot and smog pollution from the power 
plants whose emissions would be cut, as well as climate 
protection benefits based on the administration's earlier 
social cost of carbon calculations, on what is the benefit of 
reducing a ton of carbon. Those were the earlier benefits 
costs, not the current higher costs. So that was the basis of 
the conclusion.
    It does cost something. It is not a free program. But $4 
billion in a several hundred billion dollar a year industry is 
definitely a digestible cost. And when you compare that to the 
25 to $60 billion in public health and climate protection 
benefits, this is a bargain.
    Mr. McNerney. Thank you. Well, this next one is going to be 
addressed to you as well. In 2008 coal supporters trumpeted new 
technologies to reduce carbon emissions from coal, while 
providing affordable electricity. Now, there was a lot of 
optimism at that point. I would like to show another TV 
advertisement that was produced in 2008 from the coal industry.
    [Video shown.]
    Mr. McNerney. So what that shows is the coal industry was 
willing to spend money to put out advertising on TV to promote 
this. There was a lot of optimism in 2008. Was the coal 
industry right? Did they have the technology ready to go, or 
was that a fantasy at that time?
    Mr. Hawkins. As far as carbon capture and storage is 
concerned, I still believe it.
    Mr. McNerney. Where did all that spirit and optimism go?
    Mr. Hawkins. Well, unfortunately, when faced with a 
requirement to actually perform to these promises, the industry 
has taken a very short-sighted view, and basically said, no, 
what we want to do is block EPA. And the legislation would 
prevent power sector customers of coal to actually be able to 
finance plants, because those plants would not be in 
anticipation of any future EPA regulation, because EPA couldn't 
consider the results if there was any government money in them, 
and the financing wouldn't happen unless there were some 
government money, because there were no requirements. It is a 
perfect catch-22.
    Mr. McNerney. Thank you. I yield back.
    Mr. Whitfield. Gentleman's time has expired. At this time 
recognize the gentleman from Texas, Mr. Olson, for 5----
    Mr. Olson. I thank the Chair, and welcome to our witnesses. 
I know it has been a long morning, so I would like to pick you 
up with a greeting we say in Texas. Howdy, you all.
    My first question is to you, Mr. Eisenberg. As you know, 
sir, we have the world's strongest economy, and highest quality 
of life, because we have cheap, reliable sources of power. 
Reliable power is a matter of life and death in many cases for 
average Americans. But below that, cheap, reliable power is 
critical to the manufacturing revival we are seeing all along 
America, and along the Texas Gulf Coast, the whole Gulf Coast. 
No company would invest in a multi-billion dollar project if 
they have to constantly rely on backup generators, or worry 
about the power going out. Can you describe how electric 
reliability and rates impact investment decisions?
    Mr. Eisenberg. Absolutely. Thank you for the question. For 
many manufacturers, and certainly a substantial portion of my 
membership, for many of them, energy is their single greatest 
expense. So they are going to go, and they are going to build, 
and they are going to expand where energy is reliable, where it 
is affordable, and, yes, I mean, where they can get it, and 
where they can get it cheaply.
    I listed, I don't know, five or six states in my testimony 
where there is this unbelievably evident nexus between coal, 
natural gas, manufacturing. I mean, I could have listed 25 
states. I could have listed 35 states. If you look at a map, 
that is where the manufacturing is. It is where energy is 
inexpensive. And I am not saying that it only has to be those 
two. There are plenty of places in the Northeast, and in the 
West, in the Pacific Northwest, where we are using hydropower, 
renewables, and other things like that, and nuclear.
    But energy matters. It matters a lot to manufacturers. It 
may not be the only thing that matters, but for a lot of them, 
it is a very, very, very large part of why they make a decision 
to locate in a certain place, or to expand in a certain place.
    Mr. Olson. Thank you for that answer, sir.
    Question for you, Mr. Campbell. You mentioned in your 
testimony that your utility serves some of the neediest people 
in Kentucky. And I know that during the recession, the number 
of people behind on their electric bills skyrocketed, exploded. 
It is a real cost to consumers, and your consumers in 
particular. Can you tell me how price sensitive the residents 
you serve are? I mean, how much does it hurt them if prices go 
up?
    Mr. Campbell. Well, the people we serve are some of the 
poorest people in Kentucky, and cooperatives, by their nature, 
serve a lot of the poorer part of the country. But let me give 
a relation to East Kentucky Power Cooperative. Over the last 
decade, we have doubled the price of our power, and a large 
portion of that is because of the consent decree that forced us 
to put on some of the scrubbers for nitrous oxide and sulfur 
dioxide early. We did it early. And they are very sensitive 
being able to afford our power.
    And if we look at CO2 right now, and I will just 
use the President's suggestion of a cap and trade program, and 
$38 a ton for CO2, our revenue this year is about 
$900 million. And if we had $38 a ton tax on top of that for 
every CO2 ton that we released, that would increase 
us about $470 million, so that is going to be another 50 
percent rate increase on some of the poorest people in the 
country. So they are going to have to start to choose, can they 
afford medicine, can they afford food, or are they going to 
afford electricity?
    Mr. Olson. So basically their whole life is impacted 
dramatically by these increases in costs? I mean, they might 
not buy health care, which means they will be more prone to all 
the bad problems we have in our health care industry right now. 
They won't have the jobs. I mean, this is not just something 
that is in Kentucky. This is all across the country.
    Mr. Campbell. That is correct.
    Mr. Olson. And my final question, I have got 25 seconds 
here, is for you, Dr. van der Vaart. The EPA has very concrete 
benefits to claim, few of them, in the proposed new plant rule. 
It will, however, help them check an important box. The EPA 
crows in the proposal that one benefit is that, and this is a 
quote, ``The proposed rule will also serve as a necessary 
predicate for the regulation of existing resources.'' This rule 
has always been about cutting new plants off at the knees so 
they can focus on existing ones. As we look at the costs and 
benefits of the new plant rule, should we also be considering 
the costs of a sweeping rule on existing plants?
    Mr. van der Vaart. Yes. Obviously, under Section 111(d), 
the states, when implementing the standard, have the duty to 
consider costs. I think that what you raise is an interesting 
facet of the new source. It is a required predicate for the EPA 
to pursue a 111(d) program for existing sources. I think it is 
also a predicate to their true desire, which is a cap and 
trade, and they are trying to use a very stringent new source 
standard, perhaps, as a bogey for that. And they are trying to 
use the word flexibility to hide their desire of including off 
the fence, or off the property, reductions that go into a cap 
and trade so-called target.
    Mr. Olson. Thank you, sir. I am way above my time. I am 
much obliged for your answers. Thank you, Mr. Chairman.
    Mr. Whitfield. Gentleman's time has expired.
    At this time recognize the gentleman from Texas, Mr. Green, 
for 5 minutes.
    Mr. Green. Thank you, Mr. Chairman. Again thank our panel.
    Mr. Eisenberg, there is concern about regulations having 
economic impact on manufacturers, and, of course, the cost of 
their electricity, like you just said. Are any of your members 
manufacturers of CCS technology?
    Mr. Eisenberg. They are.
    Mr. Green. Are they optimistic about the economic output 
related to the manufacture of this technology moving forward?
    Mr. Eisenberg. You know, they are. They, like NAM, believe 
that we can have this technology, and that it can work. The 
issue is when? You know, and one thing that has come up 
throughout the course here is, this bill actually is relatively 
consistent with what everybody else has been saying as to when 
CCS has been available, and a lot of my members are telling me 
that as well. EPA, in last year's rule, said that CCS would be 
available 8 years from whenever the rule was enacted, 2022. 
Waxman-Markey would have required, I think four gigawatts of 
demonstrated and achievable CCS, and then wouldn't require it 
for 4 years after that. So this is entirely consistent.
    So it is a long winded way of getting to our members do 
think that we can get there. I think we can get there. I just 
don't think we are there right now.
    Mr. Green. OK.
    Dr. Tierney, the current EPA proposal created separate 
categories for natural gas and coal. In this legislation, there 
is a further subdivision of coal. Now, if you can't tell from 
my accent, I am from Texas, and we burn dirt and call it coal, 
but natural gas has been our fuel of choice, and it has grown 
substantially. Does the additional category have any economic 
cost or benefit to it?
    Ms. Tierney. To whom was that addressed?
    Mr. Green. Ms. Tierney.
    Ms. Tierney. I am sorry. Because I wasn't expecting this to 
come to me, did you say at the very end that this raises costs?
    Mr. Green. Well, no, I wanted to know, the current EPA 
proposal separates categories of natural gas and coal. In this 
legislation, the further subdivision of coal, does this 
additional category have any economic cost or benefit to it, if 
there is a separate----
    Ms. Tierney. Yes, I think it does have a benefit to it, 
because it allows for a different treatment of coal relative to 
natural gas by size and category of technology. So, yes, it 
does provide more flexibility inherently with those two 
categories.
    Mr. Green. Well, that concerns me somewhat.
    Mr. Pruitt, in Texas we have lots of natural gas, and we 
are discovering more and more each day. And I know Oklahoma is 
our neighbor, and, if you all would leave our football players 
at home, we would be really happy.
    Mr. Pruitt. We don't want to do that, Mr. Green.
    Mr. Green. Natural gas continues to expand its footprint 
for fuel, for power generation. Can you comment on the role of 
natural gas in your state's power generation/fuel mix?
    Mr. Pruitt. I mean, as Attorney General, many of us across 
the country represent ratepayers----
    Mr. Green. Yes.
    Mr. Pruitt [continuing]. Before our respective corporation 
commissions as these types of discussions ensue. And I think 
the most important thing is fuel diversity. I think the 
utilities need the ability to choose between natural gas and 
coal, other forms of energy, to provide electricity to their 
consumers. I think when policy is being used, regulation is 
being used, to pick winners and losers, elevating certain 
energy over others, it is detrimental, ultimately, to the 
consumers in our respective states.
    Mr. Green. And I can see that. The other issue is that we 
have had environmental laws for many years, and this would 
overlay it with carbon. And I know you don't do some of the 
things in producing electricity, I mean, like NOx. 
That was built into the cost of our utility providers. But 
carbon sequestration, or control, would be just added 
additional cost.
    But if you are comparing coal with natural gas, or wind, 
and I don't know Western Oklahoma very well, but I know West 
Texas, and parts of South Texas, and the wind power growth has 
just been amazing. We know there are no carbon problems with 
wind, or even solar, if someday we get to it in our part of the 
country. But natural gas is half the carbon footprint of, for 
example, coal. So natural gas would probably be the fuel of 
choice, if we ended up going more for carbon sequestration.
    Mr. Pruitt. And I think that is, in fact, happening, as far 
as utility companies, because of the low cost of natural gas 
presently.
    Mr. Green. Yes. It is based on cost now, not because of the 
environmental impact, I guess, of natural gas.
    Mr. Pruitt. Perhaps, but I think that base load energy 
between coal and natural gas, fossil fuels generally, it is 
ultimately very important to utility companies to have the 
ability to choose what is the best source of their energy as 
they provide the electricity to the consumers.
    And Congressman, I think the issue for the states is that 
ultimately there is a role for us to play. It has been 
recognized here today by Ms. McCabe and others, and we see, 
under the Regional Haze Program, and we are concerned about, 
under this particular proposed rule, that the state's role will 
be diminished, and that the cost benefit analysis will be not 
properly addressed by the EPA. And that is the reason we are 
concerned about that, prospectively.
    Mr. Green. OK. Thank you, Mr. Chairman. I know I am over 
time.
    Mr. Whitfield. Gentleman's time has expired.
    At this time recognize the gentleman from Virginia, Mr. 
Griffith, for 5----
    Mr. Griffith. Thank you, Mr. Chairman. I would point out 
several times folks have said that, obviously, power companies 
want to build gas power plants, which is certainly true, 
because of the cost of natural gas, but I also think, and, Mr. 
Campbell, I am going to direct this question towards you. I 
also think that power companies would be looking more at coal 
if they thought they could build something that would be 
effective, because the price, most recent that I have is 
September, is 3.62 per 1,000 cubic feet for natural gas. And 
experts have previously testified in front of this committee at 
$4 you are at a position where you are breaking even on the 
production of the energy between coal and natural gas. And a 
couple times this year we have actually gotten up to that $4 
level, and people project over the next few years that we 
probably will break that $4 level on natural gas.
    And isn't it true that most electric power companies like 
to have a diversity so that if natural gas prices spike, they 
can rely on coal, and if coal prices spike, they can rely on 
natural gas, and also look to other resources? Is that not 
true? Is my understanding correct?
    Mr. Campbell. That is absolutely correct. In fact, our 
strategy in Kentucky, at East Kentucky, is to diversify our 
portfolio naturally. We will probably go to a little bit more 
natural gas, because we realize there are regulatory risks out 
there too. But we think a healthy diversity of fuel is good for 
all of us.
    Mr. Griffith. Now, your headquarters is a little bit 
outside of my district, but I do touch Eastern Kentucky, down 
on the southwestern end of my district, and I also represent a 
lot of folks who are struggling to make ends meet. And you 
believe that these new regulations, if we don't pass the 
Whitfield-Manchin bill, will cause the electric prices to go up 
for those people, don't you?
    Mr. Campbell. I do believe that they will naturally make 
costs for those people to go up. I believe the new source 
performance standards, with low natural gas, if you assume that 
will go to gas, that will probably keep the rates steady. But 
if you look into the future, and we all have a mad dash to gas 
because we are not going to clean our coal plants up with CCS, 
carbon capture and sequestration, that is going to drive costs 
up.
    Mr. Griffith. And the programs, in my area, at least, if we 
get a cold winter, the programs that help people heat their 
homes who can't afford it, they don't last all winter. Is that 
true in your area as well?
    Mr. Campbell. We do. They run out of funding, and churches 
help, and some people just have to live with less electricity.
    Mr. Griffith. And what they do is they end up crowding into 
one room, several people, or, if it is an elderly person living 
alone, they just heat one room. Isn't that what they do you in 
your area as well?
    Mr. Campbell. That is correct. Yes, sir.
    Mr. Griffith. And that is a shame, isn't it?
    Mr. Campbell. Yes, sir.
    Mr. Griffith. And policies from the Federal Government 
really ought not do that to people, where they make these 
choices, isn't that correct?
    Mr. Campbell. Yes, sir.
    Mr. Griffith. And you have seen studies that also would 
show that that affects their health, doesn't it?
    Mr. Campbell. It does.
    Mr. Griffith. In a negative way, not a positive?
    Mr. Campbell. Yes. Electricity has really increased the 
life expectancy of the people of the United States. No one can 
not say that electricity hasn't improved our lives.
    Mr. Griffith. And affordable electricity makes that even 
better?
    Mr. Campbell. That is correct.
    Mr. Griffith. Dr. van der Vaart, if I might ask you, as a 
regulator, and as a lawyer, as a legal matter, under Section 
111(d), the issue, in terms of setting carbon dioxide standards 
of performance, is what is achievable at an existing electric 
generating unit. Isn't that correct?
    Mr. van der Vaart. That is correct.
    Mr. Griffith. And I would ask both you and Attorney General 
Pruitt, as regulators, can you discuss your concerns about the 
EPA seeking to regulate beyond the scope of its authority in 
planned regulations of existing electric generating units?
    Mr. van der Vaart. I would just like to say, if it does, in 
fact, pass the legal thresholds I referred to, the issue is 
that the Clean Air Act only provides authority for a reduction 
feasible by the institute of technology on the emission unit. 
What I heard earlier today is that a target, which is a 
euphemistic way of saying a limit, will be set by the Federal 
Government. That is my experience as well. If, however, in 
setting that limit the EPA includes the entire system, demand 
side management, you are going to have a number that is 
absolutely unachievable at a single unit.
    Mr. Griffith. And I understand that. Attorney General?
    Mr. Pruitt. Congressman, I would say that the EPA may 
require the states to adopt standards, the EPA may guide the 
states on how to do that procedurally, but ultimately the 
states are vested with the legal authority to decide the 
ultimate standards. And I think that is what is important, is 
we talk about these 111(d) discussions we are having.
    Mr. Griffith. Well, I appreciate that very much. In regard 
to CCS, I would agree with you, Mr. Eisenberg. We may get there 
someday. We are not there yet, and what we are going to do is 
we are going to make people in my district, and in Mr. 
Campbell's service area, and people all over the United States 
pay more for electricity, and that is going to negatively 
impact not only the amount of money in their household, but 
also, as we have heard today, it is going to affect negatively 
their health, and their viability in the world. And so it is a 
real shame that some people are opposed to this really good 
bill that Chairman Whitfield has introduced.
    With that, Mr. Chairman, I yield back.
    Mr. Whitfield. At this time recognize the gentleman from 
West Virginia, Mr. McKinley, for 5----
    Mr. McKinley. Thank you again, Mr. Chairman. Mr. Chairman, 
I have got two reports here, two white papers, one by Dr. 
Christie and Dr. Bajerob on this subject, and I would ask 
unanimous consent they be entered into the record. Mr. 
Chairman, ask these reports be entered into the record.
    Mr. Whitfield. Without objection, yes.
    Mr. McKinley. Thank you. Also, I have come here as an 
engineer, and I want to make sure we avoid Washington-speak, 
and it happens a lot. It happened in the earlier panel, where 
were just trying to get a direct answer about whether or not, 
under the new source performance standard, was going to 
increase the cost of the production of coal, coal-fired 
generated electricity. She wouldn't give us the answer.
    So my question, the two of you that are engineers on the 
panel, would you say that, if the new source performance 
standard goes into effect, will it cost more for those power 
plants that use coal?
    Mr. van der Vaart. Yes, it definitely will.
    Mr. McKinley. Will the cost of electricity increase?
    Mr. van der Vaart. Yes.
    Mr. McKinley. Thank you. And you?
    Mr. Cichanowicz. Absolutely.
    Mr. McKinley. Why can't people just say that straight out? 
Why is Washington-speak so confusing? Thank you for that.
    Mr. van der Vaart, studying your body language in some of 
the testimony from Mr. Hawkins, it seemed like you might 
disagree with some of his comments. Would you like to expound a 
little bit, clarifying some of his statements?
    Mr. van der Vaart. I think my comments covered my position 
pretty well. Again, I am very concerned whether there is any 
legal authority for the EPA to do what they are doing, both in 
the existing source category, but also even in the way that 
they are promoting the new source requirements.
    Mr. McKinley. Let me close in the timeframe I have, maybe 
open to the panel. If all of these regulations are imposed, and 
we de-carbonize America, who wins? Because the carbon is still 
going to be generated around the world. We know that Russia and 
China are going to continue. So who wins? Our workers are going 
to lose their jobs. Our manufacturing is going to lose its 
edge, because the cost of electricity is going to go up. So who 
wins?
    Mr. Hawkins, can you tell me? Who wins?
    Mr. Hawkins. The American people will win.
    Mr. McKinley. If they don't have a job they win?
    Mr. Hawkins. I will explain why I believe that.
    Mr. McKinley. Make sure----
    Ms. Hawkins. I will do it quickly. The United States has an 
incredibly successful model with the Clean Air Act, and this is 
not just theory. We have proven that when the United States 
steps out and demonstrates to the rest of the world that it is 
possible to use American ingenuity to deploy technology to 
clean up our big pollution sources, protect public health, and 
improve the economy at the same time, other countries get it, 
and they follow, and it helps everyone.
    Ms. Tierney. And when you think about the fact that the 
United States has put more carbon pollution into the air 
cumulatively, compared to any other country, it is our turn to 
lead, and we will be able to innovate and move the rest of the 
world with us.
    Mr. McKinley. OK. I am just curious.
    Mr. Campbell, how about you? Who wins?
    Mr. Campbell. Well, let me say, long term, I think everyone 
could win, but let us just look at the Clean Air Act. And I 
understand a lot of people say, boy, if you just do this, the 
technology will come. Build it, and they will come. Look, the 
Clean Air Act came, Congressman Waxman said this morning, in 
1974. That is correct, and it was 40 years, and we had somewhat 
of a proven technology. Now we don't have that, and they are 
trying to shrink that down on everybody, and we are just going 
to do it. And I don't think that can happen, and I think we 
will be a loser.
    I think we have to keep the economy of the United States 
strong so we can find these technologies, so we can help the 
world. If you look at nitrous oxide, and sulfur dioxide, and 
particulate matter cleanup that we did, China is not building a 
lot of those plants with that back-end equipment. I mean, I 
have been trying to sell a coal plant that I have right now 
overseas. None of them want the back-end equipment.
    Mr. McKinley. Thank you, Mr. Campbell.
    Mr. Cichanowicz?
    Mr. Cichanowicz. Yes. I----
    Mr. McKinley. Am I close on that? My question----
    Mr. Cichanowicz. Pretty close.
    Mr. McKinley [continuing]. In part is not only who wins, 
but also, again, your body language, you seem to be concerned 
whether or not we have actually demonstrated enough process 
that we are ready to implement. You know that Ernie Moniz came 
out last week and said, it is ready, we are ready to implement 
carbon capture. And I got the sense that you don't agree with 
that.
    Mr. Cichanowicz. Certainly I don't, and we have had some 
comments all morning about how if the power industry would just 
get to work on things, the problems would go away. Certainly 
you can deploy many advanced technologies. It just takes time. 
All these have risk, and you can go back to selective catalytic 
reduction in scrubbers. Yes, they are successful now, but 
everybody keeps forgetting, that took a while. It took decades 
to sort out the problems.
    And I think in my testimony I was clear, maybe we will have 
an answer in 2020. We don't know yet. But it just takes time to 
do the work, and understand the risks, and come up with 
possible solutions.
    Mr. McKinley. Thank you very much. My time has expired.
    Mr. Whitfield. Gentleman's time has expired. Well, that 
concludes today's hearing. I want to thank all of you for being 
focused on the issue, and for your time and effort. I know many 
of you traveled long distances, but we do appreciate it.
    And, Mr. McNerney, you have some documents you want to 
enter into the record?
    Mr. McNerney. Yes. Mr. Chairman, I ask unanimous consent to 
enter into the record two letters from organizations expressing 
concerns with, and opposition to, the proposed bill, due to its 
anticipated negative effects on climate and public health. The 
first is a letter from the American Lung Association, American 
Public Health Association, and other health and medical 
associations. The other is a letter from 79 environmental 
groups, and other organizations, on behalf of their members and 
supporters.
    Mr. Whitfield. Without objections, so ordered. Thank you.
    [The information was unavailable at the time of printing.]
    Mr. Whitfield. And then I also would like to enter into the 
record, I know the NRDC, in their testimony, had included a 
proposal relating to these issues, and we had the National 
Economic Research Associates do an analysis, and a letter from 
the American Coalition for Clean Coal Electricity relating to 
that. And then I would also like to enter into the record 
letters from the U.S. Chamber, the National Association of 
Manufacturers, and the Fertilizer Institute about the 
discussion draft.
    [The information appears at the conclusion of the hearing.]
    Mr. Whitfield. And then did you all get copies of the 
documents that Mr. McKinley wanted to introduce? OK.
    Mr. McNerney. Yes. Mr. Chairman, we got those late, so we 
would like to have a chance to review those.
    Mr. Whitfield. OK. So you all can review them, and we will 
keep the record open for 10 days. Remind members they have 10 
days to submit questions for the record. And I ask the 
witnesses all agree to respond to any questions we may have for 
you all, if you would.
    So, thank you again, and I know that we will be seeing you 
again as we go along, working on these issues. The hearing is 
adjourned.[Whereupon, at 1:14 p.m., the subcommittee was 
adjourned.]
    [Material submitted for inclusion in the record follows:]
    
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