[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
EXAMINING EPA'S REGIONAL HAZE PROGRAM:
REGULATIONS WITHOUT VISIBLE BENEFITS
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON ENVIRONMENT
COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
SECOND SESSION
__________
March 23, 2016
__________
Serial No. 114-71
__________
Printed for the use of the Committee on Science, Space, and Technology
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://science.house.gov
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HON. LAMAR S. SMITH, Texas, Chair
FRANK D. LUCAS, Oklahoma EDDIE BERNICE JOHNSON, Texas
F. JAMES SENSENBRENNER, JR., ZOE LOFGREN, California
Wisconsin DANIEL LIPINSKI, Illinois
DANA ROHRABACHER, California DONNA F. EDWARDS, Maryland
RANDY NEUGEBAUER, Texas SUZANNE BONAMICI, Oregon
MICHAEL T. McCAUL, Texas ERIC SWALWELL, California
MO BROOKS, Alabama ALAN GRAYSON, Florida
RANDY HULTGREN, Illinois AMI BERA, California
BILL POSEY, Florida ELIZABETH H. ESTY, Connecticut
THOMAS MASSIE, Kentucky MARC A. VEASEY, Texas
JIM BRIDENSTINE, Oklahoma KATHERINE M. CLARK, Massachusetts
RANDY K. WEBER, Texas DON S. BEYER, JR., Virginia
JOHN R. MOOLENAAR, Michigan ED PERLMUTTER, Colorado
STEVE KNIGHT, California PAUL TONKO, New York
BRIAN BABIN, Texas MARK TAKANO, California
BRUCE WESTERMAN, Arkansas BILL FOSTER, Illinois
BARBARA COMSTOCK, Virginia
GARY PALMER, Alabama
BARRY LOUDERMILK, Georgia
RALPH LEE ABRAHAM, Louisiana
DARIN LaHOOD, Illinois
------
Subcommittee on Environment
HON. JIM BRIDENSTINE, Oklahoma, Chair
F. JAMES SENSENBRENNER, JR. SUZANNE BONAMICI, Oregon
RANDY NEUGEBAUER, Texas DONNA F. EDWARDS, Maryland
RANDY WEBER, Texas ALAN GRAYSON, Florida
JOHN MOOLENAAR, Michigan AMI BERA, California
BRIAN BABIN, Texas MARK TAKANO, California
BRUCE WESTERMAN, Arkansas BILL FOSTER, Illinois
GARY PALMER, Alabama EDDIE BERNICE JOHNSON, Texas
RALPH LEE ABRAHAM, Louisiana
C O N T E N T S
March 23, 2016
Page
Witness List..................................................... 2
Hearing Charter.................................................. 3
Opening Statements
Statement by Representative Jim Bridenstine, Chairman,
Subcommittee on Environment, Committee on Science, Space, and
Technology, U.S. House of Representatives...................... 5
Written Statement............................................ 7
Statement by Representative Suzanne Bonamici, Ranking Minority
Member, Subcommittee on Enviorment, Committee on Science,
Space, and Technology, U.S. House of Representatives........... 9
Written Statement............................................ 11
Statement by Representative Lamar S. Smith, Chairman, Committee
on Science, Space, and Technology, U.S. House of
Representatives................................................ 13
Written Statement............................................ 14
Statement by Representative Eddie Bernice Johnson, Ranking
Minority Member, Committee on Science, Space, and Technology,
U.S. House of Representatives.................................. 16
Written Statement............................................ 17
Witnesses:
Mr. William Yeatman, Senior Fellow, Competitive Enterprise
Institute
Oral Statement............................................... 18
Written Statement............................................ 20
Mr. Thomas P. Schroedter, Executive Director, Oklahoma Industrial
Energy Consumers
Oral Statement............................................... 29
Written Statement............................................ 31
Mr. Bruce Polkowsky, Environmental Policy Consultant
Oral Statement............................................... 44
Written Statement............................................ 46
Mr. Aaron M. Flynn, Partner, Hunton & Williams LLP
Oral Statement............................................... 59
Written Statement............................................ 61
Discussion....................................................... 82
Appendix I: Answers to Post-Hearing Questions
Mr. William Yeatman, Senior Fellow, Competitive Enterprise
Institute...................................................... 96
Mr. Thomas P. Schroedter, Executive Director, Oklahoma Industrial
Energy Consumers............................................... 98
Mr. Bruce Polkowsky, Environmental Policy Consultant............. 101
Mr. Aaron M. Flynn, Partner, Hunton & Williams LLP............... 111
Appendix II: Additional Material for the Record
Documents submitted by Representative Lamar S. Smith, Chairman,
Committee on Science, Space, and Technology, U.S. House of
Representatives................................................ 120
Documents submitted by Representative Suzanne Bonamici, Ranking
Minority Member, Subcommittee on Enviorment, Committee on
Science, Space, and Technology, U.S. House of Representatives.. 560
EXAMINING EPA'S REGIONAL
HAZE PROGRAM:
A TEN-YEAR REVIEW OF COSTS
AND BENEFITS
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WEDNESDAY, MARCH 23, 2016
House of Representatives,
Subcommittee on Environment and
Committee on Science, Space, and Technology,
Washington, D.C.
The Subcommittee met, pursuant to call, at 9:33 a.m., in
Room 2318 of the Rayburn House Office Building, Hon. Jim
Bridenstine [Chairman of the Subcommittee] presiding.
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Chairman Bridenstine. All right. The Subcommittee on the
Environment will come to order.
Without objection, the Chair is authorized to declare
recesses of the Committee at any time.
Welcome to today's hearing titled ``Examining the EPA's
Regional Haze Program: Regulations Without Visible Benefits.''
I recognize myself for five minutes for an opening statement.
Today's hearing focuses on EPA's Regional Haze Rule. As the
Obama Administration nears the end of its time in office, we
must carefully review the impact, costs, and achievability of
any rules and implementation plans this activist EPA attempts
to put in place on the way out the door. As we will see, the
benefits of this regulation are dubious but the costs to
individual states, including my home state of Oklahoma, will be
very, very high.
Unlike the other regulations promulgated under the Clean
Air Act that this Committee has examined, the Regional Haze
Rule is unique for two important reasons. First, it is an
aesthetic regulation, and not a public health regulation. These
rules were designed primarily to ensure the public can clearly
see the sights at National Parks and other natural landmarks.
Second, Clean Air Act legislative history specifically gives
individual states a unique degree of authority to be decision
makers when implementing visibility-improving policies. Over
the past several decades, visibility levels at many of our
national parks and wilderness areas have significantly
improved, due in large part to the efforts of individual states
working together with stakeholders to implement plans at the
state level. The EPA did not object to the state plans then,
recognizing our system of federalism.
But under this President, the EPA has overruled the plans
created by many states to comply with this rule, instituting
Federal Implementation Plans in 14, including Oklahoma, 14
states, and attempting to institute Federal Implementation
Plans in two more. These federal plans will have huge
implementation costs, hurting consumers, those on fixed
incomes, and small businesses. It will force coal-fired power
plants to shut down and make electricity generation more
expensive. OG&E and AEP-PSO, utilities in my state, have had to
shut down power plants, forcing them to propose rate hikes or
else go out of business.
I will remind my colleagues about the multitude of
economically detrimental, radical regulations pushed by this
administration, including the Clean Power Plan, Waters of the
United States, and the National Ambient Air Quality Standards
for ozone. And now, in a continuation of its war on the poor,
the EPA is using ``visibility improvement'' to force utilities
and other stakeholders to further move away from coal and other
forms of cost-effective power generation. What's worse is that
the improvements to visibility will be negligible. Many of the
EPA's own visibility goals have already been achieved.
Further, the scientific justification for this regulation
is shaky and questionable, as our witnesses will testify. The
EPA is instituting more stringent controls for visibility than
it would for health-based regulations. The precedents set in
this rule--requiring additional controls with no real benefit
while requiring controls on individual generation sources--
could have significant and draconian ramifications for regional
haze planning across the country. This is yet another example
of the federal government bullying my constituents.
Later this spring, the Committee will invite the EPA so
that it will answer questions as to why it has become a radical
political arm of the Obama Administration, and why they are
rushing through a vast number of hasty, non-scientific
regulations, including the Regional Haze Implementation Plans.
The EPA needs to be held accountable to the American people.
We welcome the witnesses today and look forward to their
testimony.
[The prepared statement of Chairman Bridenstine follows:]
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Chairman Bridenstine. I now recognize the Ranking Member,
the gentlewoman from Oregon, for an opening statement.
Ms. Bonamici. Thank you very much, Mr. Chairman. Thank you
to our witnesses for being here this morning.
On August 25th of this year the National Park Service will
celebrate their centennial. So it's fitting that we're
discussing EPA's efforts to reduce regional haze and maintain
the scenic outlook of our most treasured locations.
President John F. Kennedy said of the creation of the
National Park System: ``It is the course of wisdom to set aside
an ample portion of our natural resources as national parks and
reserves, thus ensuring that future generations may know the
majesty of the earth as we know it today.''
In 1977, Congress had the foresight to take President
Kennedy's sentiment to heart and they recognized the threat
that air pollution posed to our iconic parks and they called on
EPA to reduce regional haze.
Some may think that preserving the views in our parks and
wilderness areas isn't worth the cost, but clearer skies
actually have a direct effect on the economy, especially in the
local communities that surround our National Parks. Studies
have consistently shown that park visitors will cut their trip
short if the park they are planning to visit is hazy. Shorter
trips and fewer visitors means less money spent on recreational
activities, lodging, and food. For example, in 2014, more than
half a million visitors traveled to Oregon's Crater Lake,
supporting more than 760 jobs.
As a whole our National Park System had 293 million
visitors who added $29.7 billion to the U.S. economy and
supported 277,000 jobs. We should be doing more, not less, to
protect these iconic landscapes and the local economies they
support.
I'd like to put up a slide that shows the progress we've
made under the regional haze program, and emphasize that there
are visible benefits but still work to be done.
[Slide.]
This slide shows a side-by-side comparison of the Great
Smokay Mountains, illustrating the air pollution that existed
in 1990, the clearing that occurred in 2010, and the goal of
natural visibility that still needs to be achieved. In 1990, a
park visitor could see 25 miles out, in 2010, 46 miles, and
with natural visibility conditions they can see 112 miles of
this magnificent mountain range.
Now, I know some consider EPA's efforts to improve air
quality under the Clean Air Act, including the Regional Haze
rule, to be a war on coal. I want to mention that earlier this
month, Oregon became--my home State of Oregon--became the first
state to enact bipartisan legislation to eliminate the use of
coal-fired power by 2035. We did this because coal-fired power
plants are some of our biggest polluters, and if we are going
to make significant progress in combating air pollution in the
future, we need to transition to cleaner sources of energy now.
Such a transition will provide economic opportunities, improve
public health, and preserve the majesty of our National Parks
for future generations.
Mr. Chairman, I have a letter from the National Parks
Conservation Association that I'd like to submit for the
record. The letter describes the importance of clean air to our
National Parks and the need for the Regional Haze program.
Specifically, the letter states ``A steady reduction in haze-
causing pollution is precisely what is required under the
Regional Haze Rule to safeguard our iconic landscapes, support
local communities, and protect the health of all.'' I ask
unanimous consent that the letter be part of the record.
Chairman Bridenstine. Without objection.
[The information appears in Appendix II]
Ms. Bonamici. Thank you, Mr. Chairman.
I look forward to the testimony of our witnesses, and at
this time, Mr. Chairman, I yield back the balance of my time.
[The prepared statement of Ms. Bonamici follows:]
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Chairman Bridenstine. Thank you, Ms. Bonamici.
I now recognize the chairman of the full Committee, Mr.
Smith.
Chairman Smith. Thank you, Mr. Chairman, and thanks to our
witnesses for being here today as well.
The Science Committee has held many hearings on the
regulatory overreach of the Environmental Protection Agency
during this administration. Unfortunately, the EPA is again
attempting to unnecessarily and unlawfully regulate the lives
of the American people. Throughout this Congress, the Committee
has often revealed how the EPA's regulatory overreach will cost
billions of dollars, cause financial hardship for American
families, and diminish the competitiveness of American
employers, all with no significant benefit to climate change,
public health, or the economy. The EPA has rushed through many
costly and burdensome regulations. Examples include the strict
new National Ambient Air Quality Standards for ozone, Waters of
the U.S., and the Clean Power Plan.
Today we will hear how the EPA's interpretation and
execution of the regional haze rule unlawfully undercuts the
statutory authority of the individual states. Congress clearly
intended, through the Clean Air Act, that individual states be
responsible and in charge of the program, not the federal
government. Instead, the administration is determined to use
this rule to impose more costly regulations on Americans.
In my home state of Texas, the EPA's regional haze
imposition would affect 14 power plans and cost more than two
billion dollars. This past Friday, the Attorney General for
Texas requested a stay of this plan.
EPA's regulatory agenda is bad for the American economy and
for the American people. We cannot allow a federal agency to
assume power that Congress has not given it. The Science
Committee will continue to rein in the EPA when it oversteps
its authority. Contrary to the EPA's agenda, Americans want to
be free from overly burdensome regulations, not tied up in
more.
We look forward to EPA's presence at a future hearing. EPA
will also be expected to answer questions about other
regulations that the agency has recently issued or finalized.
Thank you again, Mr. Chairman, and yield back.
[The prepared statement of Chairman Smith follows:]
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Chairman Bridenstine. I'd like to thank the Chairman for
his opening statement.
I now recognize the Ranking Member of the full Committee
for an opening statement.
Ms. Johnson. Thank you very much, Mr. Chairman. Welcome to
our witnesses.
We are here this morning to discuss the Environmental
Protection Agency's Regional Haze program. Nearly 40 years ago,
Congress called on EPA to implement a program that would
address air pollution in the most iconic and unique places in
our country: our National Parks. Members of Congress wanted to
ensure that future generations would be able to enjoy these
scenic vistas and that their view would not be marred by a
discolored haze. While the Nation's air quality has improved
over the years, in part because of programs like the one we are
discussing today, there is still more that needs to be done.
When someone visits a National Park today they miss out on
nearly 50 miles of scenery because of regional haze. This
pollution doesn't just spoil the view; it also has a negative
impact on public health.
Unfortunately, officials from my home State of Texas are
not leading the charge to reduce air pollution, but instead are
fighting the EPA once again. Last month, Texas Attorney General
Ken Paxton filed a lawsuit against EPA after the Agency
rejected the state's plan for reducing regional haze and
replaced it with a federal plan. As I understand it, the Texas
plan did not include a single additional pollution control on
any of the state's facilities. I'm not sure how the state
expected EPA to agree that such a do-nothing plan could qualify
as making reasonable progress toward the program's goal of
eliminating haze pollution and restoring natural visibility
conditions.
Some will likely argue that the pollution controls EPA is
requiring will not have significant impact on visibility at the
Big Bend or the Guadalupe Mountains. They will also argue that
the controls are too expensive and that the reliability of
states' electric grid will be threatened. This certainly is not
the case. EPA's plan represents a cost-effective solution to
addressing regional haze. The EPA's plan will not only ensure
that visitors to the Big Bend and the Guadalupe Mountains can
enjoy the scenery for years to come, but it will help lessen
the public health burden poor air quality has imposed on Texas
for far too long.
So Mr. Chairman, I thank you for holding this hearing, and
I yield back the balance of my time.
[The prepared statement of Ms. Johnson follows:]
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Chairman Bridenstine. I thank the Ranking Member.
I have a number of pages here of bios to read. We have
votes at 10:30, so without objection, I'll bypass on the bios,
and suffice it to say that we have four very qualified
panelists today testifying. All of them have numerous degrees,
and they all care deeply about their communities and their
country.
With that said, I'd like to now----
Ms. Bonamici. No objection.
Chairman Bridenstine. No objection. With that said, I'd
like to now recognize Mr. Yeatman for his opening statement of
five minutes.
TESTIMONY OF MR. WILLIAM YEATMAN
SENIOR FELLOW,
COMPETITIVE ENTERPRISE INSTITUTE
Mr. Yeatman. Thank you. Chairman Bridenstine, Ranking
Member Bonamici, Committee Ranking Member Johnson, and
distinguished members of the Subcommittee, thank you very much
for inviting me to testify before you on EPA's implementation
of the Regional Haze program.
My name is William Yeatman. Very briefly, I work at the
Competitive Enterprise Institute. We're a libertarian think
tank here in Washington, DC. With my testimony I just want to
briefly touch upon two themes as they relate to the Regional
Haze Rule, and that's federalism and cost as against benefits.
So first, under the Clean Air Act's framework of
cooperative federalism, states and EPA are supposed to work
together to improve the Nation's air quality. Now, in this
arrangement, the most aggressive action that EPA can perform
relative to the states is a regulatory takeover. It's known as
a Federal Implementation Plan, and these--or FIP. And these
FIPs are a big deal. They literally are EPA seizing a small
piece of state sovereignty. Because these FIPs, these
regulatory takeovers, are a big deal, they've been employed
sparingly, very sparingly, by previous Administrations. For
example, the previous three Administrations, Presidential
Administrations--George H.W. Bush, Bill Clinton, and George W.
Bush--among them EPA imposed five total regulatory takeovers
across all Clean Air Act programs. Now, by contrast, since
2009, EPA has imposed 15 FIPs, and that's just in the Regional
Haze program, so you take the previous three Administrations,
their total number of takeovers across the entire Clean Air
Act, you add them up, you multiply them times three, and that's
how many we've had from the Environmental Protection Agency
since 2009.
So this raises significant federalism implications. At the
same time, it raises cost concerns by my estimate. These
regulatory takeovers will amount to cost of at least $5
billion. That's in capital cost up front. This burden will fall
primarily upon about seven states including Oklahoma, which
again the residents of Tulsa and Oklahoma City are facing rate
increases of 14 and 20 percent, respectively, and that's just
the beginning and it's due to the Regional Haze Rule. Again,
these costs fall disproportionately on the poorest amongst us.
They're aggressive. The poorest among us spend more on energy
as a proportion of their income. So we've got these federalism
concerns, we've got these aggressive costs. You might think to
yourself, well, geez, EPA must have a really good reason to do
this, to perform these acts, and in fact, the case is--alas,
that's not the case. I mean, the benefits are literally
invisible, and we can demonstrate this with computer modeling
known as--or software, I should say, known as WinHaze, we can
model the visibility improvements attendant to EPA's controls
relative to the states' controls, and if we could please get
the first, so this is a split-screen image. On the left, those
are the state controls. They're 50 percent of the screen.
That's what Oklahoma did, you know, thousands of hours of work
they put into a plan, more than a thousand pages. Those are the
visibility benefits. So on the right, those are the visibility
benefits attendant to EPA's controls, and again, those are
invisible. No reasonable person is going to tell you there's a
difference there. Again, the cost is $1.8 billion. So big-time
cost, invisible benefits. I should note that this is the
greatest visibility improvement wrought by any of EPA's FIPs,
so this is--there's no state whose, you know, benefit, if you
will, is greater than this.
If we could get the next slide?
[Slide.]
This is Texas, so similarly, this is actually a visibility
benefit one-sixth of the previous slide, of Texas, the
implementation plan on the left, EPA's on the right. EPA deemed
Texas's plan insufficiently protective of visibility, and based
on that imposed this plan for $1.7 billion. I mean, there's no
difference. It raises serious questions about, I guess, again,
cost versus benefit. So those were the themes I wanted to brush
upon just in general.
This plan raises serious federalism concerns. It imposes
regressive significant costs, and the benefits are literally
invisible.
Thank you very much. I look forward to the Q&A.
[The prepared statement of Mr. Yeatman follows:]
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Chairman Bridenstine. Thank you for your testimony.
I now recognize Mr. Thomas Schroedter, Executive Director
and General Counsel of the Oklahoma Industrial Energy
Consumers.
TESTIMONY OF MR. THOMAS P. SCHROEDTER
EXECUTIVE DIRECTOR,
OKLAHOMA INDUSTRIAL ENERGY CONSUMERS
Mr. Schroedter. Thank you, Subcommittee Chairman
Bridenstine, and thank you, members, for the opportunity to be
here. I am the Executive Director of a trade association called
OIEC. It is a trade association of energy-intensive
manufacturers, refiners, transporters, and other large energy
consumers. They have facilities located throughout the State of
Oklahoma and the members companies employ tens of thousands of
Oklahomans. Many of those members are engaged in energy-price-
sensitive industries such as pulp and paper, cement, refining,
industrial gases, plastic, food processing, fertilizer. As I
say, these members provide tens of thousands of jobs to the
State of Oklahoma.
My testimony is going to address the impact of the Regional
Haze Rule on the state. Unfortunately, Oklahoma spent a lot of
time coming up with a State Implementation Plan to address
Regional Haze but unfortunately that plan was rejected. It was
rejected by EPA in December of 2011, and EPA insisted that the
State of Oklahoma plan provide for scrubbers on six coal-fired
generating units. Now, those scrubbers were very expensive, and
the State of Oklahoma determined that the scrubbers were not
cost-effective, that they should not be implemented and instead
that the utilities in Oklahoma should move to low-sulfur coal
and they could comply with Regional Haze by doing that. As I
said, EPA disagreed and they imposed--EPA imposed a Federal
Implementation Plan.
What happened after that, OG&E went to court, went to the
10th Circuit. PSO, the other investor-owned utility, negotiated
a settlement with the EPA. But I want you to know that the
bottom line of what's happened or what will happen in Oklahoma
is that we will incur substantial rate impacts for all utility
ratepayers whether they're residential, whether they're small
businesses, whether they're large energy consumers such as my
members.
The first year rate increases--and you're going to hear
lots of numbers today--but the first year rate increases are
estimated to be 11 to 12 percent, but that's only year one.
Based on an analysis that we have done, and I don't think that
many will disagree with, the OG&E will expend more than $4.2
billion in excess costs in order to comply with Regional Haze.
I have a slide on that.
[Slide.]
The nominal cost to comply over the lifecycle is basically
$4.5 billion. The other utility, PSO, will expend approximately
$5.1 billion more than the Oklahoma State Plan, and the reason
PSO's plan is more costly is they are closing their coal
plants. They're converting them to natural gas.
These are very serious ramifications, members, that I'm
pleased that you've given me the opportunity to share with you.
One of the ramifications is that basically we will be left with
reliance on natural gas-fired generation, and that means loss
of diversity. It's like investing in the stock market and only
investing in one stock. We will be heavily invested in one fuel
supply, and that's not good if that price increases.
As you know, as energy rates go up, there's a political for
increased unemployment, and we've looked at that, and
unfortunately, the regressive nature of the Regional Haze
Federal Implementation Plan means that as you get to lower
income consumers, the impact is greater because more and more
of their income is spent on energy. So this is bad for all
consumers, not just large consumers like my members but large
consumers. It's bad for Oklahoma. It will impact the
competitiveness of Oklahoma. I can tell you that my members, if
it becomes too costly to manufacture, will either manufacture
in other states or not manufacture their products.
Thank you for the opportunity to be here today and to
testify.
[The prepared statement of Mr. Schroedter follows:]
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Chairman Bridenstine. Thank you for your testimony.
And so everybody knows, the panelists have submitted
testimony that is much longer that is all made part of the
record, so that will be available for everybody.
Our next witness is Mr. Bruce Polkowsky, an Environmental
Policy Consultant. You're recognized for five minutes.
TESTIMONY OF MR. BRUCE POLKOWSKY
ENVIRONMENTAL POLICY CONSULTANT
Mr. Polkowsky. Thank you, Chairman Bridenstine, Ranking
Member Bonamici, and Committee Ranking Member Johnson, for the
opportunity to speak to you about my experiences with EPA's
visibility protection program.
Our National Parks and wilderness areas are treasures of
immense cultural and spiritual importance. Visitors expect and
value clean, clear air. Those visitors generate billions of
dollars and thousands of jobs at local gateway communities, and
studies show that many Americans who may not visit these areas
nevertheless value protecting visibility for future
generations.
Section 169(a) of the Clean Air Act establishing the
national goal of preventing and remedying manmade impairment of
visibility in our large National Parks and wilderness areas and
requiring EPA to issue rules for states to provide reasonable
progress towards that goal reflects the expectations and values
of most Americans.
EPA's visibility program has developed slowly, very slowly
from 1980 on to now, but it's done so in conjunction with
advances in scientific techniques to understand the components
and sources of the plumes and haze, and the regulatory program
has developed slowly with input from states and tribes.
Particularly when I was working on the Regional Haze rules at
EPA, I took into account recommendations of the Visibility
Transport Commission for the Grand Canyon that was established
by Section 169(b), and incorporated aspects of targeting the
clearest days for protection and targeting the most impaired
days for improvement that came directly from the Commission as
well as the glide path concept of moving towards natural
conditions based on the Grand Canyon Commission's projected 40
to 70 percent reduction of sulfur dioxide across an eight-state
region.
So the program has also spurred technical innovation in the
monitoring program, a network that has been formed for federal
agencies, states and academic institutions to develop equipment
and techniques for routine capturing and analyzing the chemical
makeup of atmospheric particles, those techniques were proven
in parks and wilderness areas and then became the foundation
for the monitoring of those same particles in urban areas to
implement the Fine Particle Health Standard.
And EPA has fostered innovative implementation as well. In
some actions to control pollutants from sources subject to
Section 169's Best Available Retrofit, or BART technology,
which must be implemented within five years, EPA has shown
great flexibility in seeing value in attaining greater
improvements over a longer period of time at a lower cost. EPA
has also considered multi-pollutant benefits when weighing
alternatives to controlling a single pollutant under BART.
Over the nearly four decades since Congress established the
national goal for our most treasured lands, there has been
significant progress in improving visibility in many but not
all locations. These improvements reflect emission reductions
that lowered atmospheric concentrations of fine particles
resulting from different regulatory programs. Some focused on
protecting human health, others on reducing harmful effects on
public welfare and ecosystems such as acid rain, and some were
taken specifically to address visibility. As the National
Academy of Sciences noted in their 1993 report on protecting
visibility, pollutant emission reductions that lower ambient
concentrations of fine particles will improve the health,
welfare and visibility regardless of which regulatory program
required the reduction.
There is still work to do to maintain progress towards the
national goal. States and EPA each have very important roles in
continuing to make that progress, but given the complex
atmospheric chemistry and meteorology that form and transport
fine particles over long distances coupled with the sensitivity
of clean atmosphere to small increases in fine particle
concentrations, EPA has a unique role in assuring that
implementation plans of all the states and tribes fit together
to continue to make progress towards the national goal.
And one comment I have about the number of FIPs. In 1984, I
had to issue 35 FIPs for visibility protection for the 1980
rule, so there is precedent in looking at when a new series of
programs is required for the EPA to look state by state.
So again, thank you for this opportunity, and I'm glad to
answer any questions you may have.
[The prepared statement of Mr. Polkowsky follows:]
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Chairman Bridenstine. Thank you, Mr. Polkowsky.
Our next witness is Mr. Aaron Flynn, Partner at Hunton and
Williams. He previously served as legal counsel for the Science
Advisor to the President at the White House Office of Science
and Technology Policy. Mr. Flynn, you're recognized for five
minutes.
TESTIMONY OF MR. AARON M. FLYNN
PARTNER, HUNTON & WILLIAMS LLP
Mr. Flynn. Thank you, and good morning. It is an honor to
appear before this Subcommittee to offer testimony on EPA's
Regional Haze program. As the Chairman just said, my name is
Aaron Flynn. I'm a Partner in the law firm of Hunton and
Williams. I've practiced environmental law as an attorney for
the Congressional Research Service for the White House Office
of Science and Technology Policy, and since joining Hunton and
Williams in 2007, my practice has focused on the Regional Haze
program.
When Congress enacted the Regional Haze provisions of the
Clean Air Act, it made very clear that the states, not EPA,
should make the key decisions about how to implement the
program. Congress directed EPA to develop rules to guide state
decision making while states were tasked with weighing the
relevant information, particularly information related to
compliance costs and the relative significance of visibility
improvements that different controls can achieve, and then
deciding which controls were justified and which demanded too
much. The early decisions of the DC. Circuit acknowledged and
strictly adhered to Congress's design for the program. In 2002,
the court struck down EPA's first attempt at a Regional Haze
rule in a case called American Corn Growers Association versus
EPA because that rule unlawfully constrained state discretion
to make Best Available Retrofit Technology, or BART
determinations. EPA's rules would have effectively forced
states to place greater weight on visibility impacts over costs
or any of the other statutory BART factors, and in tossing out
those rules, the DC. Circuit stated clearly that EPA could not
infringe in that matter on state decision making.
When EPA promulgated replacement Regional Haze Rules in
response to the Corn Growers decision, including rules
affording states broad discretion to adopt alternatives to
strict BART requirements, the DC. Circuit sustained those
regulations against challenges that sought more restrictive
policies.
EPA began to stray from a commitment to recognizing state
discretion, however, when implementation of the Regional Haze
program began in earnest in several early rulemakings to
establish BART requirements for facilities over which EPA had
direct regulatory authority and where no state had an
opportunity to weigh in first the Agency established precedents
for conducting BART assessment, precedents that were not
necessarily clear requirements of the Clean Air Act or EPA's
BART rules. Not only did those rulemakings establish
questionable analytical practices, they also imposed
requirements that sources install the most expensive emission
controls operated to achieve the most stringent emission limits
possible. That's a questionable policy in and of itself for
older facilities that are undergoing emission control
retrofits, as all BART-eligible facilities are.
In subsequent rulemakings, EPA went even further. While
state plans that adopted EPA's policy preferences were often
approved, states that chose to use their discretion differently
frequently faced plan disapproval and replacement of their
policy decisions with federal plans imposing strict emissions
limits and expensive technology requirements.
Many states challenged the disapproval of their plans in
federal circuit courts, and some of those challenges have led
to successful settlements and some limited victories. The vast
majority of decisions, while acknowledging the state's role in
the Regional Haze program, have nevertheless accepted arguments
that could be interpreted to grant EPA broad discretion to
disapprove state plans. Decisions from the 8th, 9th and 10th
Circuits affecting facilities in Oklahoma, North Dakota,
Nebraska and Arizona have all deferred largely to EPA's
judgment and granted no similar deference to state decisions.
Litigation over EPA's actions during the Regional Haze
program's first planning period may be coming to a close but
one case that is still in the earliest stages could set the
tone for the next state of implementation. Petitions for review
of EPA's Regional Haze Rule for Texas and Oklahoma have been
filed in the 5th, 10th, and DC. Circuits, and whichever case--
whichever court hears the case will decide a number of key
questions of first impression under the program including the
scope of state discretion under the Clean Air Act's Reasonable
Progress provisions, which will likely be the key driver of any
future regulatory requirements under the program.
The court will also be acting on one of EPA's most
controversial Regional Haze Rules to date, one that would cost
approximately $2 billion more than Texas's plan while achieving
no appreciable incremental visibility benefit. And DDPA's own
monitors confirm that the Agency's Reasonable Progress goals
for Texas are being achieved today based on emissions
reductions that have already occurred, rendering EPA's plan
unnecessary.
I look forward to discussing these issues further, and
thank you again for the opportunity to testify today.
[The prepared statement of Mr. Flynn follows:]
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Chairman Bridenstine. I thank the witnesses for their
testimony. Members are reminded that Committee rules limit
questioning to five minutes. The Chair recognizes himself for
five minutes.
Mr. Flynn, is the Regional Haze program intended to protect
public health?
Mr. Flynn. Thank you for the question, Chairman. It
categorically is not intended to protect public health.
Chairman Bridenstine. Can you explain how this makes this
rule different from the National Ambient Air Quality Standards?
Mr. Flynn. Absolutely. The Regional Haze Rule is aimed
entirely at protecting visibility conditions. Section 169(a) of
the Clean Air Act establishes a national goal that Congress set
of achieving visibility conditions in what are called Class I
Federal Areas, essentially National Parks and wilderness areas,
large ones, that is unimpaired by manmade air pollution. That
national goal is phased in over a long period of time, a
decades-long expanse of time. EPA has set a target goal for
achieving the national goal of 2064. Even that date is not
written into the statute, and it's simply a part of EPA's
regulations, and EPA's regulations provide for the fact that
states are free to determine whether the glide path to get to
unimpaired visibility by 2064 is in fact reasonable. If it's
not reasonable, states are free to push that deadline back even
further.
Chairman Bridenstine. Let me ask you on that. Did Congress
intend the Regional Haze program to be used by the EPA to
mandate specific controls at specific power plants? Was that
the intent?
Mr. Flynn. Congress certainly provided for the BART
provisions, which envision states looking at and deciding
whether specific controls are justified for a specific
facility.
Chairman Bridenstine. But that would be up to the states,
right?
Mr. Flynn. Exactly right, sir, and it is also--certainly
there was no--there's nothing in the Clean Air Act that
suggests that specific controls for specific classes of
facilities are mandated by the Regional Haze program. It is
very much a process of weighing various factors, a process that
is imbued with a vast amount of discretion in order to
determine whether controls are justified at all and what
controls those might be, and as you said, those decisions are
intended to be made by the states.
Chairman Bridenstine. Okay. Thank you.
Mr. Yeatman, would you agree that EPA's visibility goals at
the heart of the Regional Haze regulations have already been
achieved. Based on the pictures you showed up and compared to
some of the pictures we saw before that, it would appear that
most of these goals have already been achieved. Would you agree
with that?
Mr. Yeatman. Thank you very much for the question. Indeed,
I would agree that as Congress envisioned and as EPA
envisioned, because this is an aesthetic regulation and not a
public health regulation, that states could very well achieve
the goals of this program through implementation of the Clean
Air Act's public health rules. I mean, remember, the Clean Air
Act is a ratcheting mechanism. Every eight years the New Source
Performance Standards for each source category must be reviewed
and updated. Every eight years Hazardous Air Pollutant
Standards for each source category must be updated. So the very
nature of the Clean Air Act is to get more stringent with time.
It is as such reasonable to depend on these ever-more stringent
public health controls to achieve these not public health,
these aesthetic goals.
Very briefly, if I might just touch upon the matter of the
Federal Implementation Plans that was brought up by my fellow
witness, indeed, I would note I was under the impression it was
26 as opposed to 35, but that is neither here nor there. We can
definitely get the official number in the record. I note only
that all FIPs are not created equal. As I understand it, and as
was explained in the testimony of my fellow witness, Mr.
Polkowsky, the science wasn't there to implement Regional Haze
Rules for regional haze as opposed to individual plumes until
the late 1990s. The upshot is, there weren't costs attendant to
those FIPs. I mean, correct me if I'm wrong, Mr. Polkowsky, but
I'm under the impression there were controls at the Four
Corners power plant that first round but I don't know of any
others. The upshot being, there certainly weren't $5 billion
worth of costs imposed by the federal government on unwilling
states. So I think that's a difference that should be noted.
Chairman Bridenstine. In my few remaining seconds, at this
time, Mr. Yeatman, are additional and more stringent Regional
Haze regulations necessary?
Mr. Yeatman. Oh, it's for each state to determine. That's
for states to determine how much they value an aesthetic
improvement.
Chairman Bridenstine. Okay. My time is expired.
I now recognize the Ranking Member, Ms. Bonamici, for five
minutes.
Ms. Bonamici. Thank you very much, Mr. Chairman, and thank
you to our witnesses for all your testimony and expertise.
I basically want to focus on economic issues, but Mr.
Polkowsky, you state in your written testimony in your
conclusion that it's important to recognize that any pollution
control required for protection of visibility will have
collateral benefits for public health by reducing human
exposure to fine particulate matter, and that is also spelled
out with more detail in the letter that we submitted for the
record from the National Parks Conservation Association because
we are talking about the same pollutants that contribute to
visibility impairment, harming public health when we're talking
about respiratory disease, decreased lung function, asthma
attacks.
So could you just briefly comment on that aspect as well?
Even though yes, this rule was--the goal is for visibility but
there are--you know, we often think about unintended
consequences of legislation. These happen to be positive
consequences that aren't necessarily what was the goal of the
legislation.
Mr. Polkowsky. Yes, you're absolutely correct in that when
you control for visibility to aim at a certain target like a
BART determination as we did in Arizona in the mid-1980s--
sorry, in the early 1990s, there were certainly benefits to
exposure on tribal lands and nearby communities. So those
exposures reduce--those pollutants being reduced, sulfur
dioxide in that case, is going to contribute to lower sulfate
levels, which will improve visibility. It will also mean less
sulfate to be inhaled and less health impacts for the
communities that are exposed, and that's true for implementing
maximal improved visibility if it reduces levels of fine
particles. It works both ways, and----
Ms. Bonamici. Thank you. And I'm going to ask you, in your
testimony you talk about the long-term surveys that the
National Park Service has conducted of park visitors, and you
mentioned the value that visitors ascribe to clean air and
scenic views, and you state that the protection of visibility
in our most treasured parks and wilderness areas drives
economic progress in those regions and nationally.
So can you talk about--you did in your testimony, but
expand on the economic effect of haze and how does that impact
a visitor's experience and the economy of the local region?
Mr. Polkowsky. Well, as you already noted, one of the key
factors is that as visibility improves, people actually spend
more time at the parks, and that's very important because when
they spend more time, they spend more money, and as our Clean
Air Task Force report in 2000 looked at, you know, can we
actually link improving--reducing emissions from power plants
across mainly the eastern sector. This is before the full wave
of controls that is sort of well underway in the east. Would
that actually result in economic benefit across all these
communities and more jobs, and the answer was yes.
Ms. Bonamici. And I do want to get in another question in
my remaining time.
Mr. Polkowsky, the testimony of some witnesses seems to
suggest that the EPA should sort of rubber-stamp the state's
implementation plan, and I don't think anyone here is
suggesting that, so could you talk about the oversight role of
the EPA in implementing the Regional Haze program and whether
it's appropriate for the EPA to evaluate the state's
implementation plan to ensure that the requirements of the
program are being met?
Mr. Polkowsky. It's, you know, a sort of required role of
the Clean Air Act for EPA to have oversight on all State
Implementation Plans for whatever program is being implemented,
and in this case, as I mentioned in my oral testimony, we're
dealing with the formation and transport over long, long
ranges, hundreds of miles, and so coordinating the state plan,
for instance, perhaps in Texas with what the goals that were
set in Arkansas for Caney Creek Wilderness is important. That's
an important function to make sure that Arkansas is going to
get what it's counting on in terms of emissions reductions from
another state.
Ms. Bonamici. And are there particular states--I think
there was an example of Colorado where the approval process
went through and----
Mr. Polkowsky. Well, Colorado took a multi-pollutant,
multi-target approach for looking at not only visibility at
Rocky Mountain National Park and other 12 Class I areas but
also looking at the nitrogen deposition and ozone on the front
range and combined all that together as part of the Regional
Haze Plan and EPA approved it.
Ms. Bonamici. Terrific. My time's about to expire. I yield
back. Thank you, Mr. Chairman.
Chairman Bridenstine. The gentlelady yields back.
I now recognize the gentleman from Texas, Mr. Neugebauer,
for five minutes.
Mr. Neugebauer. Thank you, Mr. Chairman.
Mr. Yeatman, earlier this month on March third, a lawsuit
was filed by Texas utilities under the Regional Haze issue, and
the state of Texas had to respond to an egregious action by
EPA. In this case, EPA waited more than six years to disapprove
the Texas State Implementation Plan and replace it with a
Federal Implementation Plan that imposes interim compliance
requirements that some people say cannot be met.
You know, it's kind of interesting when EPA rejected the
Texas plan based on that--on direct reasonable progress into
source-specific analysis, and I think the tenth Circuit
actually ruled that the source-specific analysis in determining
reasonable progress was not required either by the law or the
regulation. Isn't this just kind of a bullying of the coal
industry and trampling on the states' plans and rights?
Mr. Yeatman. It is certainly, I would argue, an instance of
inappropriate treatment of the states, an inappropriate--an
absence of respect for the state's decision making, indeed, the
state's authority pursuant to the Clean Air Act.
If I might add very briefly, at the outset of your question
you noted that EPA waited six years to approve and act on
Texas's plan, and that's actually a big component of this
Regional Haze regime, that EPA has 18 months by statute to
judge a state plan, and yet what it has done time after time
and state after state is sit on these plans well past the 18
months, and what that does is under the Clean Air Act,
environmental groups are allowed to sue the EPA to compel
missed deadlines. The upshot is, because EPA has not been
meeting its statutory responsibilities to review state plans in
a timely fashion, they've opened themselves up to what are
known as these ``sue and settle'' litigations or lawsuits
whereby they become beholden to these ultra-rushed deadlines,
these ultra-rushed rulemakings of which Texas was one.
So that is a facet I wasn't able to address in my oral
testimony but it is an important element of this regime as
implemented. The Agency simply has not been meeting its
statutory responsibilities in reviewing these plans. They've
left states twisting in the wind.
Very briefly, I'll note that Texas submitted its plan in
2009 in accordance with 2006 document--I'm sorry--guidance
documents on Regional Haze issued by EPA. So Texas was using
the most recent documentation while EPA sat on the Texas plan.
They issued updated guidance on which the Texas plan was
judged. So it's sort of, you know, after the fact review with
respect to--or I guess a bait and switch. I'm not sure what
metaphor I'm looking for. But Texas based its plan on the rules
that were in play when they submitted it. EPA waited six years,
changed the rules, and then judged the Texas plan based on
different rules. So I'm glad I was afforded the opportunity to
discuss that matter.
Mr. Neugebauer. Well, you know, it's my understanding that
EPA's own monitors showed that Texas had already achieved its
visibility goals. Can you address that? How does that make
sense?
Mr. Yeatman. You're exactly right. Again, EPA is going to
base its regulation upon model results. However, real-world
results, the last five years, the running average at the Big
Bend National Park indicates that Texas has already achieved
EPA's 2018 goal. So despite the fact that Texas has already
achieved EPA's 2018 goal, EPA's own goal, and despite the fact
that EPA's controls don't result in any visibility benefit and
they cost about two billion dollars, you know, EPA proceeded
the pace. So it is--that's another troubling aspect certainly
of the Texas FIP.
Mr. Neugebauer. So let me understand that. So waited five
years, and then Texas was already meeting the goal, but EPA
denied their plan and said we want you to do a new plan, which
as I understand will force Texas to spend $2.8 billion to
increase an already 28.4-mile view by the length of seven
football fields. Does that make sense for--I think that's $2.8
million a yard.
Mr. Yeatman. That sounds--now, cost figures I have heard I
guess perhaps closer to two billion dollars. Nonetheless, we're
talking billions of dollars for benefits that are literally
invisible. So the only dispute I would have with your comment,
respectfully, is that Texas achieved the EPA's goal over the
last five years while EPA was dithering on its plan.
Mr. Neugebauer. Thank you. I yield back.
Chairman Bridenstine. The gentleman yields back.
I now recognize the Ranking Member, Ms. Johnson, for five
minutes.
Ms. Johnson. Thank you very much, Mr. Chairman.
Mr. Polkowsky, I appreciated your quoting President Teddy
Roosevelt in your testimony as he was surely someone ahead of
his time in contemplating issues and environmental health. In
1908 in a speech given at the opening of the Conference on
Conservation and Natural Resources, he said, ``But the time has
come to inquire seriously what will happen when our forests are
gone, when the coal, the iron, the oil and the gas are
exhausted, when the soil shall be still further impoverished
and washed into streams, polluting the rivers, denuding the
fields, obstructing the navigation. These questions do not
relate only to the next century or to the next generation. It
is time for us now as a Nation to exercise the same reasonable
foresight in dealing with our great natural resources that
would be shown by any prudent man and conserving and widely
using the property which contains the assurance of well-being
for himself and his children.''
More than 100 years later, it seems that we still are
working against the forces that would keep us from achieving
the vision laid out by President Roosevelt when he had this in
mind. Why is it important that we continue to improve the air
quality for our National Parks and around the country? Is it
simply good enough to achieve some arbitrary standard or should
we strive to make good on the words of President Roosevelt?
Mr. Polkowsky. Well, I certainly think we should make good
on the words of President Roosevelt, and I think that sort of
having a false dichotomy of looking at this as visibility
protection or public health is just--it's wrong. We live in one
atmosphere, and we should be striving to get that atmosphere as
clean as we can, to improve public health, to improve the
aesthetic quality of our parks and wilderness areas as one
program moving forward. And I think the history of looking at
EPA's Visibility Protection program has been one of applying
careful science to exactly that goal.
Ms. Johnson. Thank you. The Clean Air Act's Visibility
Protection program is grounded in science, showing that
reducing pollution that scatters light like sulfur dioxide,
nitrogen oxide, and particulate matter results in cleaner and
clearer air. Visibility impairment is measured in deciviews, a
measure of the perceptive change in visibility where the higher
the deciview value, the worse the visibility impairment.
In his testimony, Mr. Yeatman suggests that because the
average person may not be able to perceive or visibly discern
the reduction in haze achieved through the additional controls
required by EPA and because of that, the controls are not worth
the added cost. Do people actually notice visibility
improvement? Is a one deciview of visibility improvement, or
conversely, degradation, actually perceptual to a National Park
visitor? And can we explain why emissions reductions result in
less than a deciview of improvement are needed to advance the
Clean Air Act objectives?
Mr. Polkowsky. The answer is that any given view can take
anywhere from a half a deciview to be visible to several
deciviews but people in general on views that incorporate a
wide aspect of contrast change and enough sky color can see a
one-deciview change. A study in Phoenix looked at a deciview
change over one deciview at a time from 14 deciviews to 32
deciviews, and people ranked those, 385 people ranked those in
absolute order from good to bad, and that wouldn't have
happened if they couldn't perceive a change of a deciview.
And so it's really important that we also make progress
towards improving these deciview readings at these parks and
wilderness areas, and you can only do that incrementally, and
one single source may only move a fraction but the courts and
EPA have said that, you know, this is the way you move forward.
Ms. Johnson. Thank you very much. My time is about to
expire.
Chairman Bridenstine. The gentleman from Louisiana, Mr.
Abraham, is recognized for five minutes.
Mr. Abraham. Thank you, Mr. Chairman.
Mr. Polkowsky, in your testimony you mentioned innovation
implementation of EPA's rules and orders, and I would probably
argue that I would use a different adjective that probably in
this public forum would not be appropriate in my opinion.
I've heard when Mr. Neugebauer, you said, Mr. Yeatman, that
Texas has achieved its own goal, and the states are doing a
wonderful job. I've heard that this implementation of EPA's
rules in this instance would cost billions of dollars and
increase energy costs, as you said, Mr. Schroedter. And again,
I don't think anybody on this panel doesn't want clean air and
beautiful, pristine national parks, but I think I could argue
that with the billions of dollars, the increased energy costs,
states doing a great job themselves, that the consumer is not
going to be able to afford to go to the parks if this goes into
law.
Now, I'm a physician by trade, so I have to make decisions
on objective data and hard science, and Mr. Yeatman and Mr.
Flynn, I'll address this question to you. What science and
modeling has the EPA used to come up with this? I mean, I can't
find any, and maybe I'm missing something, but I'll let you
respond.
Mr. Yeatman. Thank you for the question. There are no
tricks. I mean, this is--what I demonstrated to you was
precisely what EPA is bringing to the table. With respect to
the previous discussion about deciview and visibility, that
Oklahoma picture, the side-by-side one, that was 2.89
deciviews. The Texas picture, that was .5 deciviews. Now,
according to peer-reviewed research, there is a 20 to 40
percent change of the average person being able to view a one-
deciview change. We saw that difficulty. It was evident when we
compared the----
Mr. Abraham. But the EPA claimed that the average person
can pick up one single deciview. That can't be correct.
Mr. Yeatman. Well, respectfully, I think EPA's language is
``likely,'' so they use hedge words such as that. I don't think
they've ever definitively said that one deciview indeed would
be visible, and indeed, the agency never directly takes on for
obvious reasons the putative benefits of its rule.
Mr. Abraham. Thank you, Mr. Chairman. That's all I have. I
yield back.
Chairman Bridenstine. The gentleman yields back.
I now recognize the gentleman from Michigan, Mr. Moolenaar,
for five minutes.
Mr. Moolenaar. Thank you, Mr. Chairman. Thank you,
panelists.
Mr. Yeatman, I wanted to ask you about the sue-and-settle
lawsuits and this concept that according to your written
testimony, every EPA disapproval of a state Regional Haze plan
and every EPA Federal Implementation Plan has been rendered
pursuant to a sue-and-settle lawsuit between environmental
special interests and the Agency. I wondered if you could
explain for us how that works and what are the practical
ramifications for that?
Mr. Yeatman. Thank you very much for the question. So it
works--I laid it out in a previous answer. Really, it's a
function of EPA's inability to meet its statutory
responsibilities. EPA is leaving states twisting in the wind
while it waits years to respond to these plans, and because the
statute affords special interests the opportunity to sue the
EPA to compel the Agency to meet its non-discretionary duties,
what we have is a scenario whereby EPA sits on the plan,
exceeds the statutory responsibility, opens itself up to
litigation, that then leads to these--the practical
ramification is a rushed deadline. State after state after
state has complained that EPA is imposing these costs, these
billion-dollar costs, and conducting these rulemakings on an
ultra-tight schedule. So, you know, of course a rushed
rulemaking is a shoddy rulemaking, so sue-and-settle itself in
this instance is a function of the Agency's not meeting,
failing to meet its statutory responsibilities in reviewing
state plans, and the ultimate impact are rushed, poor
rulemakings.
Mr. Moolenaar. And what is the state's role in that? I
mean, they would be a stakeholder. Are they involved in that
process?
Mr. Yeatman. That's a wonderful question. I'm glad you
brought that up.
The worst element, if you will, of the sue-and-settle
component of this regulatory regime is that the Agency has
actively litigated to oppose states from intervening in these
sue-and-settle lawsuits, so that is--states are the regulated
entity. They're EPA's partner under the cooperative federalism
framework. So states become aware that these negotiations are
occurring between EPA and special interests under the auspices
of district court, federal district court. States want to
intervene. You know, North Dakota has tried this, Oklahoma has
tried this, Texas has tried this. They won't intervene and
protect their interest. Again, cooperative federalism. They're
the regulated entity. EPA when they haven't actively litigated
to oppose state participation, they've ignored state
stakeholders at the negotiating table. So that has been a very
troubling aspect. I mean, perhaps the most egregious affront to
cooperative federalism has been EPA's activity in the courtroom
with respect to these sue-and-settle lawsuits.
Mr. Moolenaar. Thank you for clarifying that.
Mr. Schroedter, am I pronouncing that right?
Mr. Schroedter. Yes.
Mr. Moolenaar. Thank you. In your written testimony, you
mention the regressive economic nature of this regulation, and
I wondered if you'd go into more detail for us on how this rule
widens the income inequality gap.
Mr. Schroedter. Yes. In my testimony, I point out that, for
example, with respect to the impact on households that first of
all, Oklahoma households spend an average of 12 percent of
their after-tax incomes on energy. Eight hundred and twenty-
seven thousand Oklahoma households earn less than $50,000 per
year, and they spend 21 percent of their after-tax incomes on
energy. Three hundred and eighty-one thousand households with
annual incomes of $10,000 to $30,000 spend 25 percent of their
after-tax income on energy. So you can imagine if we're talking
about rate increases of ten percent to 20 percent, which is
what's going to happen in Oklahoma, that these are going to be
the most impacted, the lower income and those on fixed incomes,
and it's a regressive ramification for Oklahoma households.
Mr. Moolenaar. And how about the effect on small
businesses? Is that something that would force businesses to
close shop or move to another state because of these costs?
Mr. Schroedter. Well, on small businesses, you know, the
electric--the energy cost can make a difference between making
it and breaking it. If you're on the bubble, let's say, I mean,
if you're barely getting by and you get hit with a 10 to 15
percent increase, not only that, but then you're looking at
more increases, those businesses, those small businesses are
likely not going to make it. They're going to shut down.
Whether they move to another state I think is more for the
larger industries and my members where if the electric bills
become such that they are no longer competitive in their
operations, they're going to move the production. What you'll
see is, you'll see moving production to other states, and if
other states get hit, then what'll happen? Offshore, perhaps,
because it won't be competitively economic to manufacture the
product. So that's a concern, a big concern.
Mr. Moolenaar. Thank you.
Chairman Bridenstine. The Ranking Member has requested 30
seconds to make a second. Without objection, would that be all
right? Okay.
Ms. Bonamici. Thank you, Mr. Chairman. We have no other
members on this side.
And I just wanted to request that we put into the record a
Sustainable Energy in America fact book from 2016, Bloomberg
New Energy Finance, that found "importantly surging renewables
build and coal retirements have not triggered a dramatic leap
in retail power prices. Average retail electricity rates across
the country remain 5.8 percent below the recent peak 2008 in
real terms in part due to cheap generation from natural gas.''
So without objection, I'd like to enter this into the record.
Chairman Bridenstine. Without objection, so ordered.
Ms. Bonamici. Thank you.
Chairman Bridenstine. You're welcome.
[The information appears in Appendix II]
Ms. Bonamici. Thank you, Mr. Chairman.
Chairman Bridenstine. Real quick. On the sue-and-settle
issue, my understanding is, the sue-and-settle rulemaking that
affected the state of North Dakota was actually a lawsuit that
happened in California. Are you aware of that?
Mr. Yeatman. Yes, Chairman.
Chairman Bridenstine. Now, explain to me why the EPA would
sue to prevent North Dakota from having any kind of involvement
in that rulemaking?
Mr. Yeatman. A matter of legal strategy. The Agency--
ultimately, it's not the EPA that's suing, it'll be an
environmentalist group that----
Chairman Bridenstine. Okay.
Mr. Yeatman. --would bring the suit to compel EPA to do its
duty. It is the Northern District Court of California, and the
Bay area is perceived by such litigants as being more favorable
to their cause, if you will, than other courts. So that's why
they wouldn't go to North Dakota, a federal district court.
That's why they would say you find this unusual arrangement
whereby EPA is negotiating with an environmental special
interest in a northern California court North Dakota's
regulatory responsibilities.
Chairman Bridenstine. Could EPA not--so could EPA not--
working with the state, could EPA not bring North Dakota to the
negotiation?
Mr. Yeatman. That was the very suit that North Dakota AG
Wayne Steinem tried to intervene and the Agency actually
litigated to prevent, so it was----
Chairman Bridenstine. When you say ``the Agency,'' who is
``the agency''?
Mr. Yeatman. Well, the Environmental Protection Agency
working with the Department of Justice.
Chairman Bridenstine. So the Agency did sue to prevent
North Dakota from having a seat at the table?
Mr. Yeatman. I guess legalese, slight difference. I mean,
they litigated--they were already part of the suit as the
respondent. They joined with the environmental special
interests to prevent intervention of right by North Dakota.
Chairman Bridenstine. That is absolutely bullying states.
I now recognize the gentleman from Alabama, Mr. Palmer, for
five minutes.
Mr. Palmer. Thank you, Mr. Chairman. I just want to follow
up on this issue of how higher energy costs impact families. To
the point that was made, income--families with incomes below
$30,000 spend almost a quarter of their disposable after-tax
income on household energy. That's just now, right now. Among
those are senior citizens, which make up, I forget, 20
something million households. Their median income is somewhere
below $34,000 a year, has a tremendously negative impact on
their disposable income, and it's also interesting to note that
the National Black Chamber of Commerce has addressed this issue
in regard to the Clean Power Plan, and I think this goes along
the same lines, and they project that if these EPA regulations
go into effect that it's going to increase poverty, household
poverty among African-Americans by 23 percent, and by 26
percent among Hispanic families.
That said, there's some issues here that are very troubling
to me, and the gentleman from Michigan, Mr. Moolenaar, touched
on it, and that is this whole issue of sue-and-settle and
consent decrees. I've done a substantial amount of work on the
issue of consent decrees at the state level and also looked at
the federal level. As a matter of fact, I coauthored a paper
back a few years ago on how state legislatures can protect
themselves.
But what's going on right now is outside of what we've seen
in years previous. And Mr. Yeatman, you can respond to this.
Why would you think the EPA hasn't fought these suits through
the courts including going all the way through the appeals
process to get a judgment rather than simply entering into a
consent decree? You can use your imagination.
Mr. Yeatman. It is a fantastic question, and it's an issue
we've been pressing at CEI is for the Agency to defend its
discretion, to defend its prerogatives, to establish its own
priorities instead of being beholden to environmental special
interests and having these unelected, again special interests,
in effect dictate the Agency's limited resources. It is--I'm
loathe to put a cause behind it. I can only find it--I find it
inexplicable.
Mr. Palmer. Well, I can tell you this. In cases that I
studied where states and the federal government in some cases
but most of my work was at the state level, it was very evident
that state agencies wanted to enter into a consent decree
because it was their way of bypassing the legislature. They
were able to increase spending, expand their programs by court
order. I mean, what a wonderful opportunity to do that.
I would--again, using our imagination, I would go so far as
to say that it appears to me, Mr. Chairman, that the EPA is
acting in collusion with environmental groups to achieve their
agenda, whatever it may be, of regulating outside their
statutory authority, and I think that's a huge issue. Would you
like to respond, Mr. Yeatman?
Mr. Yeatman. If I might speak to that issue, for whatever
reason, a pioneer in this Regional Haze regime has been EPA
Region 6, and that's Texas, Louisiana, Arkansas, Oklahoma, New
Mexico. In 2010, so a number of these sue-and-settle consent
decrees--you know, one consent decree that affected Region 6
states, we know it was brought by Wild Earth Guardians in 2010.
We know that the then-EPA Region 6 Administrator, Al
Armendariz, who you might remember resigned in some controversy
when he compared his enforcement style to that of a
crucifixion, we know that he used to work at Wild Earth
Guardians. We know that after he resigned from the EPA, he
joined the Sierra Club. We learned from a FOIA that there were
contacts between Al Armendariz and his former colleagues at
Wild Earth Guardians regarding the actual--regarding the sue-
and-settle consent decree or the sue-and-settle process, and he
was actually told by the EPA, whoa, you cannot be doing that.
Mr. Palmer. Well, let me tell you what else we've
discovered in that regard. We know that the EPA was holding
seminars to teach their employees how to avoid FOIAs and
National Archives and records requests by using websites set up
by outside groups and maintained by outside groups. So there is
collusion here, and Mr. Chairman, it may be in our best
interests to hold a hearing to see if there might even be
criminal activity here. Because it seems to me that there's a
fraud being perpetrated upon the American people, and I'm going
to make this as my closing statement.
What really bothers me about this is the EPA is trying to
regulate everything from ditch water to the climate, now the
aesthetics of the environment, yet they covered up one of their
own scientists' reports in Flint, Michigan, about the lead in
water up there. They released millions of gallons of toxic
material into creeks in Georgia and denied that they did it and
finally had to admit it, and then by their own action released
millions of gallons of toxins into the Animas River that flowed
all the way down into Colorado and Utah and New Mexico and
tried to cover that up. I think we need to dig deeper into
this. I yield the balance of my time.
Chairman Bridenstine. The gentleman from Alabama, Mr.
Palmer, makes great points.
I recognize--remember, this is a fly-out day so they're not
likely to hold votes open for very long. We've got about ten
minutes left. I recognize Mr. Babin from Texas for five
minutes.
Mr. Babin. Thank you very much, Mr. Chairman, and I'm just
going to be very, very brief, and I appreciate what Mr.
Palmer--those questions that he just asked, and right along
those same lines, in your written testimony, Mr. Yeatman, you
explained how EPA repeatedly has employed a supposedly
independent consultant to second-guess state determinations on
Regional Haze. However, during the same period, this same
independent consultant has also worked on Regional Haze rules
for environmental special interests like the Sierra Club. Does
this lead you to question the EPA's independence? And I would
like for you to explain. And then also, to your knowledge, how
long has this type of arrangement been going on, and which
state determinations have been affected by her involvement?
Thank you.
Mr. Yeatman. Thank you for the question. Yes, this raises
serious conflict-of-interest concerns. This independent
consultant has been employed by the Sierra Club with the
National Parks Conservation Association on I believe it's six
different Regional Haze rulemakings. I can--in the record, I
can put down the states. I don't know them off the top of my
head. At the same time, she's been employed by the EPA for five
different rulemakings. So this is the same--during the same
Administration, the same regulatory regime, the same
independent consultant, and just to clarify what's going on
here, the states spent thousands of hours on these Regional
Haze plans. These Regional Haze plans are thousands of pages
long. It's a lot of expertise. It's a lot of resources that
states expend on them. This independent consultant, who again
seems to be playing both sides of the field here, based on her
analysis, EPA is disapproving the state plan. So we've got on
the one hand a co-sovereign of the United States, thousands of
hours of work. On the other hand, that work being effectively
shown to the side, cast by the wayside due to the input of this
one contractor.
So it is one other point with respect to this. Sierra Club
is one of the environmental special interests that has been
involved in each of the sue-and-settle lawsuits that have led
to these deadlines for these rulemakings. That means that EPA
before the courts and Sierra Club are adversaries on this, you
know, putatively or supposedly, you know, in our adversarial
legal system they're on opposite sides of the coin. However, at
the same time, they're employing the same independent
consultant. I mean, it just, again, raises these, I would argue
serious conflict-of-interest concerns.
Mr. Babin. Absolutely. I thank you for that.
Mr. Chairman, to save time so we can go vote, I yield back
the balance of it.
Chairman Bridenstine. I'd like to thank the gentleman from
Texas.
I thank the witnesses for their valuable testimony today
and the members for their questions. The record will remain
open for two weeks for additional comments and written
questions from the members.
Mr. Babin, if you have additional questions, you can
certainly submit them for the record.
This hearing is adjourned. Thank you.
[Whereupon, at 10:49 a.m., the Subcommittee was adjourned.]
Appendix I
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Answers to Post-Hearing Questions
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