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88–079 2015

EPA’S PROPOSED GHG STANDARDS FOR NEW 

POWER PLANTS AND H.R. lll, 

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 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

(II) 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

RALPH M. HALL, Texas 

JOE BARTON, Texas 

Chairman Emeritus 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

Vice Chairman 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BILL CASSIDY, Louisiana 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

CORY GARDNER, Colorado 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Missouri 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

HENRY A. WAXMAN, California 

Ranking Member 

JOHN D. DINGELL, Michigan 

Chairman Emeritus 

EDWARD J. MARKEY, Massachusetts 

FRANK PALLONE, JR., New Jersey 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

JOHN BARROW, Georgia 

DORIS O. MATSUI, California 

DONNA M. CHRISTENSEN, Virgin Islands 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

BRUCE L. BRALEY, Iowa 

PETER WELCH, Vermont 

BEN RAY LUJAN, New Mexico 

PAUL TONKO, New York 

(III) 

SUBCOMMITTEE ON ENERGY AND POWER

ED WHITFIELD, Kentucky 

Chairman 

STEVE SCALISE, Louisiana 

Vice Chairman 

RALPH M. HALL, Texas 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

LEE TERRY, Nebraska 

MICHAEL C. BURGESS, Texas 

ROBERT E. LATTA, Ohio 

BILL CASSIDY, Louisiana 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

CORY GARDNER, Colorado 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

JOE BARTON, Texas 

FRED UPTON, Michigan (ex officio) 

BOBBY L. RUSH, Illinois 

Ranking Member 

JERRY MCNERNEY, California 

PAUL TONKO, New York 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JOHN BARROW, Georgia 

DORIS O. MATSUI, California 

DONNA M. CHRISTENSEN, Virgin Islands 

KATHY CASTOR, Florida 

JOHN D. DINGELL, Michigan 

HENRY A. WAXMAN, California (ex officio) 

(V) 

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 

(1) 

EPA’S PROPOSED GHG STANDARDS FOR NEW 

POWER PLANTS AND H.R. ——, WHITFIELDMANCHIN 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 

2 

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? 

3 

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 themVerDate Nov 24 2008 13:46 Jan 30, 2015 Jkt 037690 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-94 CHRIS
4 

selves 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. 

5 

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 elecVerDate Nov 24 2008 13:46 Jan 30, 2015 Jkt 037690 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-94 CHRIS
6 

tricity 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. 

7 

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. 

8 

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 

9 

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. 

10 

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 

16 

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:] 

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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, 

24 

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? 

25 

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 

26 

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? 

27 

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? 

28 

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. 

29 

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 

30 

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 coalfired 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. 

31 

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—— 

32 

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. 

33 

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. 

34 

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, 

35 

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 coalfired 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. 

36 

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. 

37 

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. 

38 

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 

39 

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 reguVerDate Nov 24 2008 13:46 Jan 30, 2015 Jkt 037690 PO 00000 Frm 00045 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-94 CHRIS
40 

latory 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 difVerDate Nov 24 2008 13:46 Jan 30, 2015 Jkt 037690 PO 00000 Frm 00046 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-94 CHRIS
41 

ferent 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 

42 

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. 

43 

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. 

44 

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. 

45 

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 

46 

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 

47 

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 

48 

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, 

49 

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? 

50 

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. 

51 

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? 

52 

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? 

53 

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 

54 

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. 

55 

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 

56 

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 

57 

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 antifossil 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:] 

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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 

75 

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:] 

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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 coalfired electricity generation, and the resurgence of natural gas fired 

units, EPA’s new regulations are an equally important factor in 

81 

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? 

82 

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 

91 

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. 

123 

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 reVerDate Nov 24 2008 13:46 Jan 30, 2015 Jkt 037690 PO 00000 Frm 00155 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-94 CHRIS
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sults 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 overVerDate Nov 24 2008 13:46 Jan 30, 2015 Jkt 037690 PO 00000 Frm 00169 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-94 CHRIS
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lap 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 

173 

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 WhitfieldManchin 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 stateVerDate Nov 24 2008 13:46 Jan 30, 2015 Jkt 037690 PO 00000 Frm 00194 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-94 CHRIS
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ment, 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. 

190 

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. 

191 

[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 

192 

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 Presi- dent’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. 

193 

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. 

194 

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 compaVerDate Nov 24 2008 13:46 Jan 30, 2015 Jkt 037690 PO 00000 Frm 00200 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-94 CHRIS
195 

nies 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? 

196 

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 

197 

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 

198 

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 

199 

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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