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S. HRG. 109–1011

IMPLEMENTATION OF THE EXISTING PARTICULATE

MATTER AND OZONE AIR QUALITY STANDARDS

HEARING

BEFORE THE

SUBCOMMITTEE ON CLEAN AIR, CLIMATE CHANGE,

AND NUCLEAR SAFETY

OF THE

COMMITTEE ON ENVIRONMENT AND

PUBLIC WORKS

UNITED STATES SENATE

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

NOVEMBER 10, 2005

Printed for the use of the Committee on Environment and Public Works

(

Available via the World Wide Web: http://www.access.gpo.gov/congress.senate
(II)

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

JAMES M. INHOFE, Oklahoma, Chairman

JOHN W. WARNER, Virginia

CHRISTOPHER S. BOND, Missouri

GEORGE V. VOINOVICH, Ohio

LINCOLN CHAFEE, Rhode Island

LISA MURKOWSKI, Alaska

JOHN THUNE, South Dakota

JIM DEMINT, South Carolina

JOHNNY ISAKSON, Georgia

DAVID VITTER, Louisiana

JAMES M. JEFFORDS, Vermont

MAX BAUCUS, Montana

JOSEPH I. LIEBERMAN, Connecticut

BARBARA BOXER, California

THOMAS R. CARPER, Delaware

HILLARY RODHAM CLINTON, New York

FRANK R. LAUTENBERG, New Jersey

BARACK OBAMA, Illinois

ANDREW WHEELER, Majority Staff Director

KEN CONNOLLY, Minority Staff Director

SUBCOMMITTEE ON CLEAN AIR, CLIMATE CHANGE, AND NUCLEAR SAFETY

GEORGE V. VOINOVICH, Ohio, Chairman

CHRISTOPHER S. BOND, Missouri

JIM DEMINT, South Carolina

JOHNNY ISAKSON, Georgia

DAVID VITTER, Louisiana

THOMAS R. CARPER, Delaware

JOSEPH I. LIEBERMAN, Connecticut

FRANK R. LAUTENBERG, New Jersey

BARACK OBAMA, Illinois
(III)

CONTENTS

Page

NOVEMBER 10, 2005

OPENING STATEMENTS

Carper, Hon. Thomas R., U.S. Senator from the State of Delaware ................... 4

DeMint, Hon. Jim, U.S. Senator from the State of South Carolina .................... 6

Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma .................... 10

Isakson, Hon. Johnny, U.S. Senator from the State of Georgia .......................... 9

Jeffords, Hon. James M., U.S. Senator from the State of Vermont, prepared

statement .............................................................................................................. 46

Lautenberg, Hon. Frank, U.S. Senator from the State of New Jersey ............... 7

Voinovich, Hon. George V., U.S. Senator from the State of Ohio ........................ 1

WITNESSES

Moret, Stephen, president and CEO, Baton Rouge Area Chamber of Commerce ..................................................................................................................... 34

Prepared statement .......................................................................................... 287

Olens, Sam, chairman, Cobb County Board of Commissioners, Marietta, GA ... 30

Prepared statement .......................................................................................... 192

Wehrum, William, Acting Assistant Administrator, Office of Air and Radiation, U.S. Environmental Protection Agency ................................................... 12

Prepared statement .......................................................................................... 48

Responses to additional questions from:

Senator Jeffords ......................................................................................... 60

Senator Lautenberg ................................................................................... 57

Senator Lieberman .................................................................................... 54

Werner, James, director, Division of Air and Waste Management, Delaware

Department of Natural Resources and Environmental Control ....................... 32

Prepared statement .......................................................................................... 222

ADDITIONAL MATERIAL

Article, Daily Report for Executives, No. 215, Tuesday, November 8, 2005,

Environment Industry Report Says Delaying Ozone Deadline Would Reduce

Impact of 8-Hour Standard ................................................................................. 37

Chart, Days in Violation of Ozone Standard in Atlanta ...................................... 195

Letters from:

Diesel Emission Reduction Program Supporters ........................................... 24

National Governors’ Association, National Conference of State Legislatures, National Association of Counties, National League of Cities ......... 23

Lists:

Major Mobile Source Pollution Control Measures Implemented in Atlanta ............................................................................................................... 219

Major Sources EGU’s in the CAIR Region that EPA Estimates will not

Have Both a Scrubber and a SCR in 2010, 2015 and 2020 under

CAIR ............................................................................................................. 62–185

Memorandum, Federal RFG Impact on the Atlantic Area ................................... 196

Presentation, National Association of Regional Councils 38th Annual Conference, June 2004 ............................................................................................ 199–218

Report, The Economic Impacts of Attaining the 8-Hour Ozone Standard:

Philadelphia Case Study, NERA Economic Consulting, September

2005.................................................................................................................... 230–286
Page

IV

Resolution by the ARC Requesting Legislative Relief and a Time Extension

from Federal RFG Requirements ........................................................................ 196

Statement, Koncelik, Joseph P., director, Ohio Environmental Protection

Agency ................................................................................................................... 291
(1)

IMPLEMENTATION OF THE EXISTING PARTICULATE MATTER AND OZONE AIR QUALITY

STANDARDS

THURSDAY, NOVEMBER 10, 2005

U.S. SENATE,

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS,

SUBCOMMITTEE ON CLEAN AIR, CLIMATE CHANGE,

AND NUCLEAR SAFETY,

Washington, DC.

The subcommittee met, pursuant to notice, at 9:30 a.m. in room

406, Senate Dirksen Building, Hon. George V. Voinovich (chairman

of the subcommittee) presiding.

Present: Senators Voinovich, Inhofe, DeMint, Isakson, Carper,

and Lautenberg.

Senator VOINOVICH. The meeting will please come to order.

OPENING STATEMENT OF HON. GEORGE V. VOINOVICH,

U.S. SENATOR FROM THE STATE OF OHIO

Good morning and thank you all for coming. Today, we are discussing implementation of the existing particulate matter and

ozone air quality standards. This is the second hearing on this important topic, as we held a similar one on April 1, 2004, before EPA

designated 495 counties across the Nation, 38 in my State of Ohio,

as in nonattainment for either one or both of the standards. As I

stated at that hearing, this is not about the standards. They are

what they are and the counties across the country need to meet

them.

Our focus must be on meeting standards in a way that does not

further degrade our competitiveness. We are at a crossroads. The

decisions and investments we make today will determine the competitiveness of the United States for future generations. While innovation and productivity has traditionally been the source of our

Nation’s preeminence, the gap between us and the rest of the world

is closing quickly.

Before it is too late, we must put forth a comprehensive vision

of how we will remain competitive in the global economy. Of our

challenges, none is more pressing than energy. I would like to refer

to the fact that we need a second Declaration of Independence, energy independence. This entails a national commitment to become

more independent of foreign sources of energy by harmonizing our

Nation’s energy, environmental and economic policies.

All of these policies play an integral role in the implementation

of our Nation’s air quality standards. This was clearly stated by
2

Cincinnati Chamber of Commerce President, Michael Fisher at the

2004 hearing.

‘‘Our businesses face a confusing series of environmental laws and regulations

that often lead to miscommunication, regulatory uncertainty, lost business investment and even higher energy costs. Simply stated, conducting business in an area

designated as nonattainment is more complicated, more time-consuming and costly.’’

As a former Governor who brought all of Ohio’s counties into attainment, I understand firsthand that these standards are an unfunded mandate on our State and local governments and we need

to do all we can to help them come into compliance. The Federal

Government needs to let communities know what is required of

them, even though State implementation plans are due in June

2007 and April 2008, the particulate matter rule was only proposed

this month and the second ozone implementation rule was finalized

just yesterday.

The EPA owes an explanation about this delay, because the

States need these rules earlier. Is it a lack of manpower, or has the

Agency simply been spending too much time on doing analysis of

Senator Carper’s bill and our manager’s amendment on Clear

Skies?

Senator CARPER. Time well spent.

[Laughter.]

Senator VOINOVICH. EPA’s Clean Air Interstate Rule is a good effort to help by significantly reducing powerplant emissions. But it

does not provide the full assistance needed by many areas such as

those in moderate attainment, like the city of Cleveland, OH,

where I was the mayor. I met with the Ohio EPA Director, Joe

Koncelik, several times on this issue and would like to insert into

the record testimony that he has provided. Without objection, it is

ordered.

[The referenced document follows on page 291.]

Senator VOINOVICH. He continues to emphasize that the Cleveland area cannot attain, and this is an example of many other nonattainment areas in the country, the Cleveland area cannot attain

the ozone standards by its deadline of 2010, but could by 2015. He

states,

‘‘Ohio believe that the current Federal approach to improving air quality lacks coherency. The federally mandated air pollution control programs are on much longer

implementation schedules than the deadlines established by U.S. EPA for States to

meet the 8-hour ozone standard. A better balance needs to be struck.’’

In other words, the implementation schedules go out beyond

2010, but these communities that are not in compliance have to

comply by 2010. A better balance is desperately needed in northeast Ohio and other areas where the economy is already struggling.

The lack of coherency in our environmental, energy and economic

policies is having a major impact, with 100,000 jobs lost in the

chemical industry and funding increases desperately needed for the

LIHEAP program to help the poor.

Simply put, the chickens have come home to roost. We compartmentalize our different policies, failing to recognize that like Paul’s

letter to the Romans, Chapter 12, we are all part of the same body.

We must start looking at the bigger picture and understand that

what we do in one area affects another area. Enacting multi-emissions legislation would provide certain reductions, unlike the legal

challenges and delays we have seen with EPA rules, and harmoni-
3

zation between the attainment dates and Federal air policies would

also avoid unnecessary harm.

I thank EPA for their presentation recently to this committee on

their extensive analysis of the proposals that I just referenced. EPA

has also finalized new diesel fuel and engine regulations to substantially reduce diesel emissions. This is going to help nonattainment counties, because on-road and non-road diesel vehicles and

engines account for roughly one-half of the nitrogen oxide and particulate matter mobile source emissions nationwide. However, the

full impact will take time, because the rules address new engines

and the estimated 11 million existing engines have a long life.

I am so very, very pleased that we were able to, working with

members of this committee and several other members, to introduce the Diesel Emissions Reduction Act. We are hopeful that we

can get that funded, because I think it is going to make a big difference for our country.

I again thank everyone for attending. I look forward to hearing

from the witnesses about what’s being done or should be done to

help States and localities. Due to the impact on our Nation’s competitiveness this matter deserves serious attention. I mean, it deserves serious attention.

I can tell you for sure, I have never seen my economy in my

State so lousy as it is today. A lot of it has to do with energy. The

largest natural gas cost that we’ve ever seen is just smashing in

on the economy of our State. Somehow we have to get all this together. If other States are like mine, we’re in trouble and we had

better get our act together.

[The prepared statement of Senator Voinovich follows:]

STATEMENT OF SENATOR GEORGE V. VOINOVICH, U.S. SENATOR FROM THE

STATE OF OHIO

The hearing will come to order. Good morning and thank you all for coming.

Today, we are discussing implementation of the existing particulate matter and

ozone air quality standards. This is the second hearing on this important topic as

we held a similar one on April 1, 2004 before EPA designated 495 counties across

the Nation 38 in Ohio as in nonattainment for either one or both of the standards.

As I stated at that hearing, this is not about the standards. They are what they

are and counties across the country need to meet them.

Our focus must be on meeting the standards in a way that does not further degrade our competitiveness. We are truly at a crossroads. The decisions and investments we make today will determine the competitiveness of the United States for

future generations. While innovation and productivity has traditionally been the

source of our Nation’s preeminence, the gap between us and the rest of the world

is closing quickly.

Before it is too late, we must put forth a comprehensive vision of how we will remain competitive in the global economy. Of our challenges, none is more pressing

today than energy. We need a Second Declaration of Independence energy independence. This entails a national commitment to become independent of foreign sources

of energy by harmonizing our Nation’s energy, environmental, and economic policies.

All three of these policies play an integral role in the implementation of our Nation’s air quality standards. This was clearly stated by Cincinnati Chamber of Commerce President Michael Fisher at the 2004 hearing: ‘‘our businesses face a confusing series of environmental laws and regulations that often lead to

miscommunication, regulatory uncertainty, lost business investment, and even higher energy costs Simply stated, conducting business in an area designated as nonattainment is more complicated, more time-consuming, and more costly.’’

As a former Governor who brought all of Ohio’s counties into attainment, I understand firsthand that these standards are an unfunded mandate on our State and

local governments. We need to do all that we can to help.
4

The Federal Government needs to let communities know what is required of them.

Even though State implementation plans are due in June 2007 and April 2008, the

particulate matter rule was only proposed this month and the second ozone implementation rule was finalized just yesterday. EPA owes us an explanation about this

delay because States need these rules earlier.

EPA’s Clean Air Interstate Rule is a good effort to help by significantly reducing

powerplant emissions, but it does not provide the full assistance needed by many

areas such as those in moderate nonattainment like Cleveland.

I have met with Ohio EPA Director Joe Koncelik several times on this issue and

would like to insert into the record testimony that he has provided. He continues

to emphasize that the Cleveland area cannot attain the ozone standard by its deadline of 2010 but could by 2015. He states, ‘‘Ohio believes that the current Federal

approach to improving air quality lacks coherency. The federally mandated air pollution control programs are on much longer implementation schedules than the

deadlines established by U.S. EPA for States to meet the 8-hour ozone standard. A

better balance needs to be struck.’’

The lack of coherency in our environmental, energy, and economic policies is having a major impact on families and businesses—especially in Northeast Ohio. We

must start looking at the bigger picture and understand that what we do in one

area affects another.

Enacting multi-emissions legislation would provide certain reductions—unlike the

legal challenges and delays we have seen with EPA—rules and harmonization between the attainment dates and Federal air policies so we avoid unnecessary harm.

I thank EPA for their presentation recently to this committee on their extensive

analyses of the different proposals. I hope that this now allows my good friend and

Ranking Member to offer a counterproposal like Chairman Inhofe and I did so we

can move forward.

EPA has also finalized new diesel fuel and engine regulations to substantially reduce diesel emissions. This will help nonattainment counties because on-road and

non-road diesel vehicles and engines account for roughly one-half of the nitrogen

oxide and particulate matter mobile source emissions nationwide. However, the full

impact will take time because the rules address new engines and the estimated 11

million existing engines have a long life.

That is why I introduced with several members of this committee the Diesel Emissions Reduction Act to establish voluntary national and State-level grant and loan

programs to promote the reduction of diesel emissions. The easy part was getting

this broadly supported bill passed as part of the energy bill—now we need to get

it funded.

I am pleased to report that an amazing coalition has come together to push for

$200 million in fiscal year 2007 and for consolidating all of the diesel emissions reductions programs under this one. I would like to insert into the record letters sent

to the President from the major State and local groups and over 200 environmental,

industry, public, and labor groups.

I again thank everyone for attending, and I look forward to hearing from the witnesses about what is being done or should be done to help States and localities. Due

to the impact on our Nation’s competitiveness, this matter deserves serious attention.

Thank you.

Senator VOINOVICH. Senator Carper.

OPENING STATEMENT OF HON. THOMAS R. CARPER,

U.S. SENATOR FROM THE STATE OF DELAWARE

Senator CARPER. Mr. Chairman, thank you for calling this hearing, and to each of our witnesses, thank you for joining us. I especially want to welcome Jim Werner, who heads up the Division of

our Department of Natural Resources and Environmental Control,

which deals with air and waste management. We look forward to

his testimony in a few minutes, along with that of each of our other

witnesses.

How many counties does Ohio have?

Senator VOINOVICH. Eighty-eight.

Senator CARPER. I think you said they are all in attainment?
5

Senator VOINOVICH. They were in attainment. Under the new

rules, 38 of them are not.

Senator CARPER. All right. We only have three counties in Delaware and none of our counties are in attainment for ozone. In Newcastle County, which is in northern Delaware, where most of our

people live, is in nonattainment for particulate matter.

When I was Governor, and we were Governor about the same

time, those were great years.

Senator VOINOVICH. Where?

[Laughter.]

Senator CARPER. Not because we were Governor. They were good

times for our country.

In fact, he has heard me say this a million times, but when he

was chairman of the National Governors Association, I was vice

chairman, and when he was chairman of Jobs for America’s Graduates, I was his vice chairman. Now that he is Chairman of the

subcommittee, I am still his vice chairman. I am sort of getting

tired of being second banana.

[Laughter.]

Senator CARPER. But no, he is a good guy to be second banana

to.

But when I was Governor, in my State we wrestled, as Governor

Voinovich did in his State with what we could do in our respective

States to reach attainment. Unfortunately, while there were some

steps that we could take to help ourselves, the main source of pollution in my State, my little State of Delaware, comes from beyond

our borders.

Today, we are going to discuss the progress that is being made

across our Nation in reaching our clean air goals. It is important

to remember that there are many places like Delaware that need

areas upwind of us to clean up their air so that we can cleanup our

own. The standards that we are going to discuss today were issued

in 1997, as we know. Here we are in 2005, finally discussing implementing those standards. Now some are suggesting that we should

delay implementing those standards even longer.

I believe that we have waited long enough. Under our current

schedule, the first marginal areas will be required to reach attainment in 2007. That is 10 years after the standards were set. Areas

with even more severe pollution will be required to reach attainment between 2010 and 2021.

I believe we have delayed clean air far too long, and it is time

to start seriously addressing it.

Over the past 10 years, we have learned more and more about

the significant effects on public health from ozone and particulate

matter pollution. The longer we postpone reducing this pollution,

the longer we suffer. According to EPA’s Web site, these national

ambient air quality standards are, I think this is a quote, ‘‘are set

to protect public health, including the health of sensitive populations such as asthmatics, children and the elderly.’’

I know a lot of people want to discuss the costs associated with

attaining those standards, and meeting them is going to be hard.

I appreciate those concerns. But the cost of protecting the public

health is far less than the cost of breathing dirty air.
6

Last, I would like to assert that many of the costs associated

with reaching attainment can be averted if State and local officials

are given enough time to develop their implementation plans.

States have a broad range of tools to use to develop our SIPS. The

more time that we are given the more creative we can be.

Yesterday EPA finalized its rules to provide States with the guidance needed to meet the ozone air quality standards. They have yet

to finalize their guidance for States to meet the particulate matter

standards.

I believe EPA has taken too long getting these rules in place. I

know there are extenuating circumstances. But I hope that EPA

will prove useful and give States the tools necessary to meet the

current attainment deadlines.

Thanks very much, Mr. Chairman.

Senator VOINOVICH. Thank you.

Senator DeMint.

OPENING STATEMENT OF HON. JIM DEMINT, U.S. SENATOR

FROM THE STATE OF SOUTH CAROLINA

Senator DEMINT. Thank you, Mr. Chairman. I appreciate the opportunity to speak, and I appreciate our witness, Mr. Wehrum.

I want to ventilate just a little bit, if I can. I warned our witness

that I was somewhat frustrated, because as I travel around the

State and the country, increasingly I hear from businesses the

question, do you even want us to do business in the United States

of America. It is almost like we are putting signs on our beaches,

go do business somewhere else. With our litigation system, our taxation system and particularly our regulatory system, we are making it increasingly difficult for America to be competitive in a global

economy.

There is no Agency that comes up more than the EPA. I have

heard often in my State that a company that wants a new distribution center or a new plant could be producing in China before they

even got a permit to break ground in my State. That sometimes involves the EPA, Army Corps, or other agencies.

The quality of our air is certainly important, but the quality of

life involves having a job and being able to make a living. I think

our agencies have to recognize that you are competing as an Agency to be the most efficient regulatory, environmental regulatory

agency in the world. I just have deep concerns about the implementation of the standards. In my hometown of Greenville, SC, the

EPA has decided that the area’s compliance with particulate matter, they have decided that we are not out of attainment but

unclassifiable.

I understand that we are the only area in the country that is

called unclassifiable. It is because they are using a monitor that

does not have the 3 years of data and so instead of leaving us in

attainment, they said we were unclassifiable. The siting of the

monitor itself is not even according to the EPA guidelines, according to experts. We have been looking at this for months and years.

We have had regional EPA people come in, and they have agreed

with us. They have agreed the monitor is likely to be out of compliance.
7

Instead of working with us, they cite all of the regulatory processes that they have to go through, which means they can’t help

us. But they are willing to listen to everything we have to say.

A designation like this to an area like ours, where we were heavily textile, we are trying to recreate jobs and attract new industry,

it just puts a veil of uncertainty over the whole area. Who wants

to move in a place that might be closed down by the Federal Government for development? As we look for businesses all over the

world, the EPA is holding us back.

I have a large coalition of businesses in the upstate who are willing to do whatever is necessary to fix the problem. There is no resistance there. But the problem is, you can’t tell us what the problem is. We don’t know what the pollution is. We don’t know where

it is coming from.

There is no way that increasing the standards is a constructive

measure. It would be if you could tell us what the problem is, so

that we could address it. But your measures are only punitive.

They are not constructive. They are not collaborative, because you

can’t come and say, here’s how to fix the problem. So no matter

how much time we spend, no matter how much money we spend,

there is no reason to have a measurement system if it is not designed to improve the quality of the environment.

So I have deep, deep reservations about moving ahead with a

standard which has no constructive value. I appreciate the intent

of the EPA. But to put more people out of business and out of work,

using a system that is not improving the environment, it is just

hurting people and diminishing our future, makes absolutely no

sense. There is no excuse to use procedures and to say that we

have to do this because of that, when you can change the procedures and if you can’t tell us what we need to change so that we

can have America as a good place to do business, with clean air

and clean water.

Thank you, Mr. Chairman.

Senator VOINOVICH. Thank you, Senator DeMint.

Senator Lautenberg.

OPENING STATEMENT OF HON. FRANK R. LAUTENBERG,

U.S. SENATOR FROM THE STATE OF NEW JERSEY

Senator LAUTENBERG. Thanks, Mr. Chairman.

We are kind of at a crossroads here, at least in our discussion

thus far. That is that to figure out what it is that our mission is

going to be. I listened respectfully to my colleagues, to the Chairman, to be concerned about jobs and business, I am concerned

about that. I come out of the business world, and I know what it

means to have people working and to be producing revenues.

I have, for instance, a grandchild who has asthma. When I hear

him wheezing and I see the panic that crosses his face as he

reaches, tries to find an inhaler, and my daughter when he goes

to play games, he is 12 years old, and he is athletic, the first thing

she does is look for the nearest emergency clinic in case he needs

help. There is no price in my view that wouldn’t be worth paying

to relieve him and the millions of other children who are affected.

So I want to say that our mission, though it has been described

differently, is not to kill business. It is not to get jobs exported out
8

of our country. It is, we are talking about health benefits. We have

to have these two things coincide in some way to be effective. We

have to be concerned about what happens with the health of our

people, described as vulnerable parts of the population.

Think about what business responsibilities are. Because no one

can say that business is bad in America. Look at what the oil companies just produced. Incredible numbers. Does that mean that

therefore we ought to ignore their responsibility to help us keep the

air clean or the water clean? Absolutely not.

I know when we see the hot weather and emissions from automobiles and other sources combine to create high levels of ozone,

we know what follows, and that is lots more hospital admissions

with children. Do we tell these kids, well, you can’t play outdoors

on summer days, the air is going to make them sick? That’s not

right. It shows how important it is to implement these new health

standards for our air.

Particulate matter in the air is even worse than ozone. It kills

thousands of people each and every year. When I was a boy, my

father took me to the silk mill where he worked. He said he wanted

to introduce me to the fact that he thought that was dangerous, it

was a place where your health might be in danger. My father died

when he was 43, he got sick when he was 42 and suffered with

cancer. My father was a health faddist, even in those days.

So when I look at what we have to do to protect the health of

our people, I look at it with a balance, and it isn’t simply to say,

well, OK, Supreme Court said unanimously that the EPA rules

were within the realm of reality and need not be changed, but rather to be enforced. That is not happening. That is my principal concern. It is not, again, intended to be at the expense of business or

jobs. No, not at all.

I see other things that accompany this that have to do with our

national policy on whether or not we shortcut revenues that are developed in our country that could be invested in things and instead

are distributed to those who need it the least, and many who don’t

even want it.

So we have to get on with meeting reality, and that is, the health

benefits must be attended to as promptly as we can. It is not, say,

here is better health and here is the end of the jobs in whatever

county or whatever town. There are lots of jobs around. We don’t

want to lose those, however, that we have.

When I dial the credit card company and I get a voice accented

much different than that which I traditionally hear, and I know

that I’m some place in India, and people are very pleasant, but

somebody is not working who would have had that in this country

that would have that job otherwise. That has little to do with our

environment. It has to do with our capacity to compete.

When I see what General Motors is talking about now, and how

close they might be to a bankruptcy condition, I say, where is the

leadership in our companies? Well, I don’t want to take us too far

astray. But I would suggest that we had better look very, very

closely at the implementation of standards that have been developed by EPA and approved by the court and get on with figuring

out ways how two do that without penalizing the industrial sector

of our economy.
9

Thanks, Mr. Chairman.

Senator VOINOVICH. Thank you, Senator Lautenberg.

Senator Isakson.

OPENING STATEMENT OF HON. JOHNNY ISAKSON,

U.S. SENATOR FROM THE STATE OF GEORGIA

Senator ISAKSON. Thank you, Chairman Voinovich. I appreciate

the perspective former Governors like yourself and Senator Carper

bring in terms of dealing with clean air. I particularly appreciate

the perspective that those who are actually on the ground in the

local communities doing it bring.

I am very pleased to welcome Commission Chairman Sam Olens,

who will be on our second panel. He is the chairman of the County

Commission in my home county and the chairman of the Metropolitan Atlanta Planning Agency, the Atlanta Regional Commission.

Atlanta has been a poster child for the Clean Air Act for many

years. So I think he will bring a great perspective, and he brings

great experience to this particular hearing.

As I have stated in previous hearings, 60 percent of my State

lives in nonattainment. Twenty-eight counties strung from the

rural counties of Catoosa and Walker County in the mountains of

northwest Georgia through metropolitan Atlanta down to

Muskogee and Columbus, GA have been classified as nonattainment. Sixty percent of the population of our particular State, 5 million people. Air quality is a significant topic in our State, and it is

appropriate that the committee talk about it today.

While it is not directly relevant, I guess, to this hearing, I would

say I am sorry we haven’t yet passed Clear Skies. Because I think

a lot of the things you will hear today in the discussions regarding

the existing standards and others could have been met better by

local communities with the type of legislation and the type of matrix that was presented by the Clear Skies legislation.

In the interest of time, and in the interest of Mr. Wehrum and

the others who are here to testify, I will reserve the rest of my remarks for questions, and I thank you very much, Mr. Chairman,

for holding this hearing.

[The prepared statement of Senator Isakson follows:]

STATEMENT OF HON. JOHNNY ISAKSON, U.S. SENATOR FROM THE STATE OF GEORGIA

Thank you Chairman Voinovich. I want to commend you and your staff for calling

this oversight hearing, and for your leadership and your persistence on this issue.

I would like to welcome Sam Olens to the committee. Sam is testifying in our second

panel, and is County Commission Chairman in my home county of Cobb. He also

is the Chairman of the Atlanta Regional Commission, which is the Metropolitan

Planning Organization (MPO) for 18 counties within the 20+ county Atlanta 8-hour

ozone and fine particulate matter nonattainment areas.

I have stated this in previous hearings but it bears repeating again: 60 percent

of my State of Georgia’s population lives in a nonattainment area. That is over 5

million people. 28 of 159 of our counties, including Walker and Catoosa Counties

in the mountains, through Metro Atlanta, and down to Muscogee County and the

Metro Columbus area, are in nonattainment for particulate matter. 22 of 159 counties over the same geographic area are in nonattainment for ozone. This hearing is

very timely, as air quality is an issue that Georgians in my State deal with every

day.

While it is not the topic of the hearing today, in my view a fix for these problems

would have been passage of the Clear Skies bill. I am hopeful that we, as a committee, can come together and bring to the floor that legislation which in my opinion

is better than current law.
10

In the meantime, I will stop here so that we can get to our witnesses. I look forward to hearing from the panels, thank Chairman Voinovich for his leadership to

date, and yield back the balance of my time.

Senator VOINOVICH. Thank you very much.

I am glad that the Chairman of our committee has joined us

today, Senator Inhofe.

OPENING STATEMENT OF HON. JAMES M. INHOFE,

U.S. SENATOR FROM THE STATE OF OKLAHOMA

Senator INHOFE. Thank you, Mr. Chairman. First of all, I appreciate your doing what you are doing. Long before Senator Voinovich

came to the Senate, when he was Governor of Ohio, he was considered to be one of the real leading experts in air issues and actually

came and testified before our committee as Governor.

I am going to make this very short. I do think it is worth saying

that something people forget, particularly some of the extremists,

environmentalist groups that over the last 30 years, air pollution

has been cut by more than one half. We have had the statistics as

to how many more miles are driven and all that. Yet it has been

successful, and we should be proud of these accomplishments.

It disturbs me that some of the environmentalist lobbies tend to

minimize and obscure this fact. Because I realize these achievements have not been accomplished without cost. Hundreds of billions have been spent. Economies have been slowed and jobs have

been lost to achieve these pollution cuts. The burden that many

have paid should not be minimized nor what they have accomplished.

Today, we will hear testimony on two very important air quality

standards. We will hear testimony on the large number of counties

that have been designated as nonattainment with these standards.

While coming into attainment will be relatively painless for a few,

many areas will experience tremendous hardships through slower

growth and job contractions. For instance, a recent study in Philadelphia found that the burden could be enormous. It was conducted

by the NERA Economic Consulting, a respected firm that does

work for Government, private sector and the environmental communities, and found that meeting its 2010 ozone-attainment deadline will lead to a $3 billion reduction in economic output in the

Philadelphia region in 2011. By 2020 the annual cost to the region

would be staggering, growing to as much as 60,000 fewer jobs, $8

billion in reduced output and $6 billion in reduced disposable income.

The study also found that simply moving the deadline to 2015

would lower the costs to the local community to $100 million per

year and a thousand fewer jobs. This underscores that it is important not only what goals we set, but how we achieve these goals.

Mr. Chairman, as a former Mayor, I recognize how important it

is that mandates imposed through Federal law are achievable and

flexible in design. I am concerned that such is not the case here.

As Ohio EPA Director Joe Koncelik points out in written testimony,

northeast Ohio could barely come into attainment by its deadline,

even if it shut down all its industry and de-populated the area.

Given these realities, a regulatory deadline appears to be arbitrarily inflexible.
11

The Clear Skies legislation that has been blocked by this committee would address these issues. We have more analyses on

multi-emission legislation than we have ever had for any Clear Air

bill since the Clean Air Act originally passed. In fact, we have more

information than we did even on the original Clean Air Act.

I hope that with the latest analysis conducted by the EPA, we

receive a serious proposal to move forward with legislation to further our Nation’s clean air progress while building common sense

into the way we achieve it. Thank you very much for holding this

most significant committee hearing, Mr. Chairman.

[The prepared statement of Senator Inhofe follows:]

STATEMENT OF SENATOR JAMES M. INHOFE, U.S. SENATOR FROM THE

STATE OF OKLAHOMA

Thank you for holding this subcommittee hearing, Mr. Chairman. This hearing

will provide us with a better understanding on how we are meeting our Nations

clean air goals as well as the challenges ahead.

Progress on cutting air pollution is one of the Nation’s environmental success stories. Over the last 30 years, air pollution has been cut by more than half. Emissions

of each of the six criteria pollutants identified in the Clean Air Act have been dramatically cut. In fact, one of them—lead—has virtually been eliminated.

We should be proud of these accomplishments. It disturbs me that the green lobby

tends to minimize and obscure this fact because I realize these achievements have

not been accomplished without cost. Hundreds of billions have been spent, economies have been slowed, and jobs have been lost to achieve these pollution cuts. And

the burden that many have paid should not be minimized, nor what they have accomplished.

Today, we will hear testimony on two very important air quality standards. We

will hear testimony on the large number of counties that have been designated as

nonattainment with these standards. And while coming into attainment will be relatively painless for a few, many areas will experience tremendous hardship through

slower growth and job contractions.

For instance, a recent study of Philadelphia found that the burden could be enormous. Conducted by NERA Economic Consulting—a respected firm that does work

for government, private sector and environmental community—found that meeting

its 2010 ozone attainment deadline will lead to a $3 billion reduction in economic

output in the Philadelphia region in 2011. By 2020, the annual cost to the region

would be staggering—growing to as much as 60,000 fewer jobs, $8 billion in reduced

output, and $6 billion in reduced disposable personal income.

The study also found that simply moving the deadline to 2015 would lower the

cost to the local economy to $100 million per year and 1,000 fewer jobs. This underscores that it is important not only what goals we set, but how we achieve those

goals.

As a former mayor, I recognize how important it is that the mandates imposed

through Federal law are achievable and flexibly designed. But I am concerned that

such is not the case here. As Ohio EPA Director Joe Koncelik points out in written

testimony, Northeast Ohio could barely come into attainment by its deadline even

if it shut down all of its industry and depopulated the area. Given these realities,

the regulatory deadlines appear arbitrarily inflexible.

The Clear Skies legislation that has been blocked in this committee would address

these issues. We have more analyses on multi-emission legislation than we have

ever had for any clean air bills since the Clean Air Act originally passed. I hope

that, with the latest analysis conducted by EPA, we receive a serious proposal to

move forward with legislation to further our Nation’s clean air progress while building common sense into the way we achieve it.

Thank you.

Senator VOINOVICH. Thank you, Mr. Chairman.

I just got the statistics. Since 1970, GDP, gross domestic product,

is up 187 percent, vehicle miles traveled is up 171 percent, energy

consumption is up 47 percent and the population is up 40 percent.

At the same time, emissions of the six criteria pollutants are down

54 percent.
12

Senator INHOFE. That is amazing.

Senator VOINOVICH. So the fact of the matter is that the air is

getting cleaner, not dirtier, and the real issue today is, how do we

harmonize our, in my opinion, our environmental laws with our energy and with our economy. That is the challenge, I think, that we

all have coming before us, particularly with the economy right now

that we are confronted with in the United States.

We really are lucky to have Mr. Wehrum here today. He has

been before us before, and we thank you for your courtesy and efforts. We are anxious to hear what you have to say, and I think

you know what the rules of the committee are, if you can limit your

statement to 5 minutes, we would appreciate it. Your entire statement will be put into the record.

STATEMENT OF WILLIAM WEHRUM, ACTING ASSISTANT ADMINISTRATOR, OFFICE OF AIR AND RADIATION, U.S. ENVIRONMENTAL PROTECTION AGENCY

Mr. WEHRUM. Thank you, Chairman Voinovich, Chairman

Inhofe, members of the committee. I appreciate the opportunity to

speak with you today about the work EPA is doing in partnership

with States and local governments to reduce air pollution across

the country.

The Clean Air Act has given us important and effective tools for

improving the quality of the Nation’s air. Key among those tools

are the National Ambient Air Quality Standards, designed to protect American public health and the environment from the most

pervasive of pollutants.

These common pollutants include ozone and fine particles, which

I will focus on today. With your permission, Mr. Chairman, I also

would like to submit a longer statement to the record.

Senator VOINOVICH. Without objection, so ordered.

Mr. WEHRUM. At ground level, ozone is unhealthy to breathe,

posing the greatest risk to children, asthmatics and adults who are

active outdoors. Ozone can aggravate asthma, inflame the linings

of the lungs and reduce a person’s ability to breathe as easily and

deeply as normal. Repeated exposure over time may permanently

damage lung tissue. Studies also show an association between

ozone exposure and mortality.

Exposure to fine particles, those smaller than 2.5 microns, is associated with an even wider range of health effects, including aggravated asthma and chronic bronchitis, irregular heartbeat,

nonfatal heart attack and premature death in people with heart or

lung disease.

The prevalence and seriousness of these health effects led EPA

to revise the standards for both ozone and fine particles in 1997.

While litigation slowed implementation, we are now moving forward to bring cleaner air to nonattainment areas across the country. As this chart shows, deadlines for reducing ozone pollution

range from 2007 to 2021, depending on the severity of the area’s

problem. The dates for meeting fine particle standards range from

2010 to 2015.

It is a tight schedule, and we are aware that certain areas are

concerned about meeting the standards on time, as Senator DeMint

and others have pointed out today. Let me assure you that EPA is
13

committed to assisting States and nonattainment areas as they develop their implementation plans, and helping them to identify reasonable controls for reducing emissions.

I will also note there is a process for both standards by which

areas can seek additional time or request a later attainment date.

We know from experience that bringing areas into attainment requires a combination of Federal and State programs and in some

cases local measures as well. After the 1990 Clean Air Act amendments, EPA designated 101 areas as nonattainment for the old

ozone standards, the 1-hour standards. Today, nearly 80 percent of

those areas meet the standards, an accomplishment made possible

by ingenuity and hard work by State and local governments, industry and citizens and support from EPA in the form of regulations

that have reduced ozone regionally and across the Nation.

We envision new successes with the 8-hour ozone and fine particulate standards. Just 5 years from now, an estimated 82 percent

of the current nonattainment areas for the 8-hour ozone standard

will attain the standards, thanks to a suite of EPA regulations to

reduce emissions from cars, buses, trucks, construction equipment,

fuels and powerplants.

Our modeling also shows that 18 of the 39 current PM–2.5 nonattainment areas will meet standards by 2010, thanks to many of

these same programs, including CAIR, EPA’s market-based Clean

Air Interstate Rule. CAIR will build on the approaches used in our

highly successful acid rain program to dramatically reduce powerplant pollution.

I will note, as Senator Inhofe and Senator Voinovich have both

noted, the Administration, and I will speak for the Administration,

continues to prefer to reduce emissions from powerplants through

multi-pollutant legislation such as Clear Skies, which would be permanent and would apply nationwide. In addition to regulatory and

legislative approaches, our strong voluntary programs will help

States as they implement the ozone and fine particle standards.

We have seen some shining examples of these programs as part

of our national Clean Diesel Campaign, which is reducing pollution

through voluntary efforts such as idling reduction and diesel retrofits. Mr. Chairman, I would like to thank you for the leadership

you have shown through the Diesel Emissions Reduction Act of

2005.

While all these programs, regulatory and voluntary, will help

nonattainment areas make significant progress toward meeting the

standards, some States and communities will have to take additional local measures. EPA has been working closely with States to

help them identify actions that will help. My written testimony

outlines the scope of our efforts to assist States by providing technical information, analytical tools, training and guidance. For example, we have been supporting States that are developing nontraditional approaches to reducing emissions that contribute to

ozone and PM.

Within the past 2 years, we have issued guidance to help States

take credit for measures such as energy efficiency, truck and locomotive idling reduction, airport emissions reductions and commuter

programs. We are also working with State officials to develop a

menu of options to reduce fine particle pollution.
14

Experience has taught us that reducing pollution is challenging,

no doubt about that. Meeting fine particle and 8-hour ozone standards will be no different. We have also learned that we have a

much better chance of success if we work as partners across all levels of government. EPA remains committed to this important partnership and to improving the quality of our Nation’s air.

Thank you very much. It is truly an honor and a privilege to be

here today. I would be happy to answer any questions you might

have.

Senator VOINOVICH. Thank you very much, Mr. Wehrum.

I would like to remind the committee members that we are going

to have a round of 5-minute questioning. I would like to begin, Mr.

Wehrum.

You state that EPA has moved forward with a host of regulations

to present regional solutions to help counties come into attainment.

However, this is not enough for some areas. Ohio EPA, and I have

made reference to Mr. Koncelik, states in his testimony, and you

have already heard it, about the fact that we could shut down all

the industries and have the people move out, and we wouldn’t

achieve the 2010 requirements.

Throughout my career, I have found that it does a tremendous

amount of good to get everyone together, get on the same page and

develop solutions. Working with Senator Carper and other members of this committee, we were able to sit down with an extremely

diverse group that never all agree on anything to develop the Diesel Emissions Reduction Act that you mentioned in your testimony.

It can be done.

Would you be willing to work with me, Ohio EPA and other

stakeholders like the Northeast Ohio Area Coordinating Agency

and the Ohio Environmental Council that represents our environmental groups to determine how and when compliance for air quality standards can be achieved in Cleveland?

Mr. WEHRUM. Absolutely yes, Senator. As I noted in my comments and from my personal experience, it often takes the efforts,

the input, the energy, and the ingenuity of many stakeholders to

find and implement the solutions to tough air pollution problems

like those faced by the city of Cleveland. I can assure you that U.S.

EPA will participate in this effort, will bring the assistance that we

are able to bring and seek the (solutions and hopefully implement

those solutions) that will allow Cleveland to attain by its specified

deadline.

Senator VOINOVICH. Thank you.

You are familiar, and you mentioned it, the legislation that we

passed in terms of retrofitting diesel engines. As you know, one of

the provisions consolidates all of the various programs that deal

with reducing diesel emissions into kind of one basket. There is a

lot of concern out there about, is that going to happen. Does the

Agency plan to consolidate all diesel emissions reduction programs

under this one, under DERA?

Mr. WEHRUM. Senator, I can tell you we fully support the legislation. We will take the steps necessary to satisfy the obligations of

the legislation.

With regard to levels of funding, which I think is part of your

question, we think these diesel reduction programs are enormously
15

important and can bring great air quality benefits. Certainly a priority for the Agency, and we will certainly make it a priority in our

budgeting process.

Senator VOINOVICH. Has anybody ever calculated if that was

fully funded what impact it would have in terms of reducing emissions?

Mr. WEHRUM. Not to my knowledge, Senator, but no doubt the

benefits would be substantial.

Senator VOINOVICH. The last thing I would like to get at is, when

we had Administrator Leavitt here in April 2004, he talked about

the State implementation plans would be due in February 2008,

fine particle that is. EPA intends to propose a rule, that’s June,

that would describe the minimum elements required for fine particle SIPs, State Implementation Plans, and intends to finalize this

rule later this year or early in 2005.

As you know, EPA only proposed this rule earlier this month. I

am not going to ask you to explain why it has taken so long. The

question is, when are we going to get this finished up so that

States know exactly what it is that they are going to have to do

in order to comply?

Mr. WEHRUM. Senator, as you point out, we just recently proposed that regulation. I believe we are on track to promulgate the

final implementation rule likely by mid-2006. The deadline for submitting PM2.5 implementation plans will be April 2008. So if we

stay on the schedule I just described, that will provide well over

a year for States to understand the parameters of the rule and be

able to build that into their planning efforts.

Senator VOINOVICH. Well, I would respectfully suggest that had

we done it earlier, it would have been a lot easier for the States.

Senator DeMint is talking about not knowing which end is up trying to comply with it. I think the sooner we know what the rules

are, the better off we will all be.

I mentioned I want to sit down with you and others to figure out

how we are going to deal with northeastern Ohio. We have to know

what the rules are. So what you are telling me today is that you

will finalize the particulate matter implementation rule when?

Mr. WEHRUM. I believe we will be able to get the rule done by

the middle of next year. It is possible it may take a little bit longer

than that. But what I can tell you is, this rule is a priority for me

and it is a priority for the Agency. We will move it along as expeditiously as we can, Senator.

Senator VOINOVICH. OK. The SIP for that is due when?

Mr. WEHRUM. April 2008. I will point out, Senator, these implementation rules are important, and I don’t intend to minimize the

importance. They will provide valuable information and guidance

for States that will be useful and needed for the preparation of approval of SIPs.

I would like to make the point that much of what must be done

to prepare an approvable SIP is already understood and already

known. The State commissioners and those responsible for air programs have a vast amount of experience, because we have been implementing SIP-based programs for many, many years under the

Clean Air Act.
16

So again, I am not going to minimize the importance of these implementation rules. There is work being done and there is much

work that can be done. When I look at the picture, I have confidence that the schedules we are talking about for doing the implementation rules will in fact provide reasonable periods of time for

these rules to be rolled into the SIP planning efforts.

Senator VOINOVICH. What I am going to do is ask Mr. Koncelik

what impact it is having on his decisionmaking, because the rule

will be delayed until next year, after June some time. So what you

are saying is that probably they have enough information that they

can go ahead and put a plan in place. So I am going to be interested to hear from them as to whether or not, or perhaps one of

our witnesses in the second panel can help us with that.

Senator Carper.

Senator CARPER. Thanks, Mr. Chairman.

Mr. Wehrum, good to see you. Thank you for being here and for

your work that you and your colleagues at EPA are doing.

I have a real quick question, and I will ask you to answer it

briefly. There is a standard that has been, I think, promulgated for

ultra low-sulfur diesel fuel. My recollection is that a standard kicks

in, is it in October of next year?

Mr. WEHRUM. That is correct, Senator.

Senator CARPER. Some of us worked pretty hard to get included

in the Energy bill a variable tax credit that incentivizes the production and the purchase of low-emission, high fuel efficient dieselpowered cars, trucks and vans. That variable tax credit kicks in on

January 1 of this coming year. I think it is a tax credit that is

worth up to about $3,400.

If you look to Europe, you see the introduction of a lot of vehicles,

almost half the vehicles that will be purchased in Europe, cars,

trucks and vans, are diesel-powered. They have very low sulfur diesel fuel. They like diesel-powered vehicles, low-emission diesel-powered vehicles because of the good fuel economy, lower CO2 emissions and performance as well.

I understand that the standard for ultra low-sulfur diesel fuel is

being delayed by maybe 45 days. Is that here in this country next

year?

Mr. WEHRUM. Senator, the standard that you are referring to is

part of a suite of standards directed at reducing emissions from

what we call the ‘‘on-road’’ diesel vehicles, things like tractor-trailer

rigs that travel on the highway. That standard is a combination of

fuel requirements and engine technology and control requirements.

As you point out, they are all slated to come into effect late next

year.

Right now, the regulation requires, on the fuel side, a sequence

of deadlines that begins with the refineries and then moves to the

distributors and then finally moves to the retail outlets that will

actually sell this fuel to the truckers and the like. Just yesterday

or the day before, the Administrator signed a direct final rule and

of course a final proposal to extend the second and the third of the

deadlines that I just described.

So we are still holding refiners to the original deadline of June

of next year to begin producing the low-sulfur fuel. But those in the

distribution chain, up through the retail level, had concern that
17

once that low-sulfur fuel began to be distributed through the system that it would take longer to flush out the higher sulfur fuel

that is currently in use—longer than we had originally anticipated

when we promulgated the regulations.

So we are taking action to extend the deadlines for the distributors and the deadlines for the retail sales. But at the end of the

day, that is not going to delay implementation of the rule. Again,

this will be a combination of fuel with the vehicle technology and

this technology will begin to be introduced at the end of next year

and the fuel will be there when the vehicles are introduced.

Senator CARPER. Good. I just hope that this one delay, I think

it is fairly brief, is it 45 days?

Mr. WEHRUM. That is correct.

Senator CARPER. I hope that is all we need and that we can go

forward. We are leaning on the folks who make cars, trucks and

vans to make low-emission diesel fuel powered vehicles highly energy efficient, and I just want to make sure that there is fuel out

there for people who buy those vehicles to use them in their cars,

trucks and vans.

You were kind to comment on the work that Senator Voinovich

and others of us have done on the diesel retrofit legislation. It has

been a pleasure to work with him and others on that. We also want

to thank EPA for working with us in this area. There is an old saying, it all comes down to money. In the end, we have to come up

with the appropriations. It is all well and good that we have authorized this. I think most people think it is a terrific program. But

now we have to make sure it is funded so it can go forward.

In 2002, all of the litigation holding up the new National Ambient Air Quality Standards was completed, and EPA was free to

move forward with the implementation of those standards, as you

know. It is my understanding, I might be wrong, but it is my understanding that once a national standard is set, that EPA and the

States take a series of steps to achieve those standards. Those

areas are being designated and classified in attainment or nonattainment. EPA issues rules for implementation that include minimum elements for State implementation plans.

Using this guidance, States like Delaware develop and submit for

approval our SIPs through EPA that show how we will reach attainment by the promulgated deadlines. However, in my view, EPA

has been very slow in developing this guidance. I realize there are

extenuating circumstances.

But yesterday, a full 3 years after the litigation was I believe settled, EPA finalized its rules to provide States with guidance needed

to meet the ozone air quality standards. They have yet to finalize

their guidance for States to meet particulate matter, I believe.

Could you just explain to us why it has taken so long to develop

these standards, and when we can expect to see the guidance for

particulate matter?

Mr. WEHRUM. Senator, the implementation rules are a part of a

suite of many other determinations and regulations that are necessary to implement the ambient air quality standards. In the case

of ozone, we divided our implementation rules into two pieces and

promulgated the first part of the implementation rule that had the

most basic information, but the most important information at the
18

time that we did the designations. We knew that was important.

We made it the highest priority and we got it done.

The second part of the ozone implementation rule, as has been

pointed out, was proposed along with the first part. We just finalized within the last couple of days.

In the case of PM, the proposed implementation rule was signed

in September, just a month or a couple of months ago. In response

to the question the Chairman asked, it is our belief that we will

finalize that regulation by the middle of next year or perhaps somewhat later. As I have indicated, we realize this rule is a priority

and we will move expeditiously in completing it.

All I will say, and I will emphasize again, these rules are important. We will get them done as expeditiously as we can. But we at

EPA have not been sitting on our hands, and those in the States

have not been sitting on their hands. There is much work that can

be done, and is being done, to prepare for the SIPs.

Part of why we, for example, did not finalize the ozone implementation rule until the last couple of days is because we placed

a priority and much emphasis on completing the Clean Air Interstate Rule. That is enormously important to us and I believe enormously important to the members of the committee, because it in

a single stroke provided millions of tons of reductions of SO2 and

NOx from powerplants that are affecting nonattainment areas

throughout the eastern parts of the country. That regulation alone,

in conjunction with other Federal regulations that are on the books

are by themselves going to solve the nonattainment issues that

many areas face.

In addition, while the implementation rules are important, there

is a wide range of other guidance that we develop and other tools

that we develop and make available. In my written testimony, in

the appendices, it includes three lists that give you some indication

of the other activities that we have undertaken over this period of

time.

So again, from an overall standpoint, my belief is we are making

much progress. There is much work that can be done and is being

done. The implementation rules either have been or will be completed within a period of time that will reasonably make them

available for use in formulating the final SIPs submissions.

Senator CARPER. Thank you very much.

Senator VOINOVICH. Senator DeMint.

Senator DEMINT. It is a little frightening that a rule is so complex, that it takes that long to do, that we are going to ask our cities and States to comply with it. It is frightening to me.

I would just like to ask a question, and again I appreciate your

being here, I don’t intend any disrespect. But as you know, there

are many uncontrollable variables as it relates to air pollution.

Many things related to geography, coastal areas will have a different set of circumstances than a foothills area like mine that

might have weather inversions. An area like mine where two major

interstate highways criss-cross, where the measuring devices are in

close proximity to heavy traffic between Charlotte and Atlanta.

We have no control of the weather, the geography, the Federal

highways, other things that affect pollution. We are having dif-
19

ficulty getting data so that we can respond, we can take the measures necessary to continue to clean our air.

My question to you is, how do you feel that it is right to even

be talking about increasing the standards when you still have cities

like my home town of Greenville that don’t have enough data now

to deal with the designation that we already have, enough data to

determine what measures we need to take to improve the air, and

you are already moving to increase a standard that you have not

yet told us how to meet the other one?

Mr. WEHRUM. Senator, that is an excellent question. I will digress a moment and just say that I appreciate the input and the

view that you bring and the other members of the committee bring.

It is important to the Agency to hear concerns such as the ones you

are expressing, so that we understand the perspective that you

have and can integrate that perspective into the steps we take to

help people meet the standards that are on the books right now.

So I thank you for that.

With regard to review of the current standards, this is a situation where the Clean Air Act is quite specific. It requires EPA to

consider or reconsider all existing standards on a 5-year schedule,

rotating schedule. So under the requirements of the Clean Air Act,

we had an obligation to review the 8-hour ozone standard and

PM2.5 standard by 2003, because those standards were enacted in

1997.

We failed to meet that deadline and as a result of that failure,

we were sued. As a result of that lawsuit, we now have revised, legally enforceable deadlines for completing the review of the standards. Most importantly for us, in the case of the fine particle standard, it calls for us to propose some action by December 20 of this

year and to take a final action by September of next year.

Senator DEMINT. Does that review include at all your ability to

deliver constructive data to the areas that you want to respond to

it? Review is not just your ability to enforce. But does that review

include considerations as I mentioned?

Mr. WEHRUM. In short, no, Senator. The 1997 standards were

litigated up to the Supreme Court. The Supreme Court made it

quite clear that our consideration of the standards and the possible

need to adjust them needs to be based on assessment of potential

impact on human health and the environment.

Senator DEMINT. So it has nothing to do with your ability to do

your part of the job. It only relates to municipalities who are supposed to meet a standard that you haven’t told them how to meet

yet.

Mr. WEHRUM. I will just say, Senator, that when we are reviewing standards, we are obligated to focus on the human health impacts and possible environmental impacts.

Senator DEMINT. Thank you, Mr. Chairman.

Senator VOINOVICH. Thank you. Senator Isakson?

Senator ISAKSON. Thank you very much for being here.

You said in your statement that 80 percent of the communities

that will be, that are nonattainment will have met attainment by

2015. Was I hearing that right?

Mr. WEHRUM. Yes, Senator.

Senator ISAKSON. How do you know that 20 percent won’t?
20

Mr. WEHRUM. We don’t know that they won’t, but the statements

in my testimony were based on work that was done in conjunction

with the Clean Air Interstate Rule that I have talked about a couple of times during my testimony. Just looking at that regulation

and other existing Federal and State programs that are just on the

books right now, we see tremendous improvement over the next

few years because of the reductions that will be achieved.

That doesn’t mean we have made a determination that the other

areas will not meet the standard. What it does mean is additional

steps are going to have to be taken, probably locally in those areas,

to get them over the line and into clean air.

Senator ISAKSON. Does it also probably mean that 20 percent of

the communities that are in nonattainment can’t get out of nonattainment because of circumstances beyond their control?

Mr. WEHRUM. No, Senator.

Senator ISAKSON. Are you familiar with the Walker and Catusa

County, GA case?

Mr. WEHRUM. Yes, Senator.

Senator ISAKSON. For the benefit of the committee, and I think

somewhat similar to Senator DeMint’s question, Walker and

Catusa are rural, northwest Georgia mountain communities. They

were placed on nonattainment. The source of a great deal of the

pollutant has been traced back to forest fires in Alaska. They also

have a major interstate going through.

They entered into a compact, a voluntary compact with EPA, but

still were placed in nonattainment. The reason I ask the question

is, just like some of the things that Senator DeMint said, there are

certainly some places, there are two counties in Georgia that there

is nothing they can do currently to get out from under nonattainment. They can’t do anything to get out because of circumstances

beyond their control.

How many other places would there be like that in the country,

would you think?

Mr. WEHRUM. I don’t know the answer to that particular question. But with regard to the two counties that you have identified

and are concerned with, I would like to elaborate.

Senator ISAKSON. Please.

Mr. WEHRUM. The concern about the air quality in those areas

as raised by local officials in those areas is that fires in upwind

areas and in some cases areas that are fairly distant upwind were

having such an impact on the air quality that it caused those areas

to be in nonattainment where they otherwise wouldn’t as a result

of local and other regional emissions.

We have had a policy for some time at the Agency, an exceptional events policy, we call it, that allows for an assessment in situations like this as to whether the impacts in fact are occurring

such that those types of events are causing nonattainment. Where

the data indicate that that is the case, we can set aside those data

and they are not used for making attainment or nonattainment determinations.

What I can tell you about your particular situation is, or the situation in those counties, is that the data has been offered to the

Agency. The data is under consideration. We had initially, as you

point out, made a designation of nonattainment. But the area has
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sought reconsideration of that determination and we will work

hard to consider the information that is brought forward and make

the best decision we can based on the data that are available.

Senator ISAKSON. I appreciate that. I am aware of the appeal,

and I know that you are reevaluating it. I went up there in August.

It is about an hour and a half from my home. I went up there to

see it. If you ride into those communities and you look at the density of population and you look at the type of employment, which

is not industrial based or major pollutant contributing based, and

then you look at its proximity to another State’s metropolitan area

and the data they submitted with regard to the forest fires, it

raised the question to me that that’s not the only place in the

United States that a small, rural community could end up falling

under a designation that it then could not get out from under

through any efforts of its own volition.

So I appreciate that review, and I would appreciate your answer

really quickly.

I have another question. EPA is requiring Atlanta to start using

a federally reformulated gasoline. My understanding is the current

gasoline sold in Atlanta is a low-sulfur gasoline and the designated

gasoline—I think there is a lawsuit over this issue. The designated

gasoline that now they are going to be required to sell actually is

a larger polluter than what they are doing now.

How do we have results that are designated to improve air quality that the mandated gas to be sold actually is a worse pollutant

than what currently is being sold? Or am I wrong? And I could be

wrong.

Mr. WEHRUM. Well, the situation in Atlanta, you are absolutely

correct that that area has its own local fuel standards that were

adopted to improve air quality and approved by EPA. The additional fuel requirement, what we call a reformulated gasoline, is a

result of the designation that they received under the prior 1-hour

standard. So there were graduated levels of nonattainment and

when Atlanta reached a certain level, the law required that reformulated gasoline be applied in that area.

The city and the State asked EPA to waive certain aspects, we

have the ability to waive the oxygenate piece of that. There was

controversy, and it led to litigation. Our determination was stayed

by the Fifth Circuit and that is pretty much where the situation

stands.

What I can tell you is this is an issue we have been following

very closely and trying to work closely with the officials in the

area. We haven’t reached final resolution, but I am hoping that in

the very near future that we can get there.

Senator ISAKSON. I know I am running over, but I want to thank

you for your forthright answers to both of those questions, and just

point out, Mr. Chairman, the importance of this hearing and the

importance in us. Because if I heard everything right, in a very respectful way, to a certain extent you are saying your hands are tied

by the law itself.

I am putting words in your mouth, so I will take the criticism.

Did I hear that wrong?

Mr. WEHRUM. No, Senator, the law is quite specific about the obligations that are applied at various points in time. We are at-
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tempting to maneuver through the various requirements in a way

that gets what everybody views as a sensible result.

Senator ISAKSON. Thank you very much for your service.

Senator VOINOVICH. Thank you.

Mr. Wehrum, we really appreciate your being here today and we

look forward to working with you and having those regulations finalized. Thank you very much.

Mr. WEHRUM. Thank you, Mr. Chairman. Thank you, Senator

Carper and Senator Isakson.

Senator VOINOVICH. Our second panel, we have Sam Olens, who

is chairman of the Atlanta Regional Commission. We are very

happy to have you here with us. Jim Werner, who is the director

of Delaware’s Division of Air and Waste Management, good friend

of Senator Carper’s and Stephen Moret, who is the president and

CEO of the Baton Rouge Area Chamber of Commerce.

Senator ISAKSON. Mr. Chairman, can I say a word about Mr.

Olens before he testifies?

Senator VOINOVICH. You sure can.

Senator ISAKSON. I want to acknowledge Mr. Olens in my remarks. Sam is a dear friend of mine and has a great resume, he

is a great public servant. Just recently, he did quite an outstanding

thing. He passed a one cent local option 5-year sales tax to raise

$1 billion for transportation improvements in the community that

I live in, which is the third largest county in the State of Georgia.

A lot of his leadership in the deployment of those funds are

aimed at traffic mitigation and those things that we can do in a

positive way in construction that themselves contribute to the lessening of pollutants. So we are fortunate to have someone here who

not only knows the words but he knows what they mean and he

is doing it on a daily basis. He is a great public servant in Georgia

and I welcome him here today.

Senator VOINOVICH. Thank you all for being here.

Before your testimony, I want to ask unanimous consent that the

letters from major State and local groups and over 200 environmental, industry, public and labor groups asking that the fiscal

year 2007 budget include $200 million for the Diesel Emissions Reductions Act and that all other diesel emissions reduction programs

be funded under the DERA bill be included in the record.

[The referenced information follows:]
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Senator CARPER. Mr. Chairman, before our witnesses speak,

could I just say, we welcome you all. I am especially pleased that

Jim Werner could be here. He was born in Delaware, grew up in

Delaware, but he has gone on to work in environmental control

areas in various areas, especially I think, in Missouri. He has

worked in the U.S. Department of Energy, he has as a consultant

advised the NGA.

So he really has a breadth of experience, and we are fortunate

he came home to Delaware a year or two ago to take on the responsibility to head up our Air and Waste Division within the Department of Natural Resources. It is a real pleasure to welcome him

today. Thank you for coming.

Mr. WERNER. Thank you, Senator.

Senator VOINOVICH. It is the local people that make the difference.

Mr. Olens.

STATEMENT OF SAM OLENS, CHAIRMAN, COBB COUNTY

BOARD OF COMMISSIONERS, MARIETTA, GA

Mr. OLENS. Thank you. Good morning, Chairman Voinovich,

Ranking Member Carper, members of the committee. I would like

to begin my testimony by specifically recognizing my U.S. Senator,

Senator Isakson. Senator Isakson has been my State House representative to the State legislature, my State Senator, my Congressman and now my Senator. There is no one in Georgia in public service that I admire more than Senator Isakson.

Thank you for allowing me to be here today. I am Sam Olens,

chairman of the Atlanta Regional Commission, and I am pleased

to be here with you this morning to testify on behalf of the ARC

and share with the committee our experiences in implementing

Federal particulate matter and ozone air quality standards. The

ARC is the designated MPO for Atlanta and has primary responsibility under the Clean Air Act for ensuring transportation conformity.

Atlanta was first designated as a nonattainment area for the 1-

hour ozone standard in 1990. Over the past 15 years, we have

made significant progress in improving our regional air quality.

This resulted in attainment of the 1-hour ozone standard in 2004,

something that many people doubted could ever be achieved. This

significant achievement occurred as a result of two things. No. 1,

the concerted and collaborative effort in the region to implement effective, innovative pollution control measures, and No. 2, significantly improved relationships between the various agencies, businesses, industries and other stakeholder groups that have a role in

ensuring clean air in our State and in our region.

Our success has occurred in spite of unprecedented growth, numerous legal challenges and implementation of new air quality

standards and provisions that have greatly impacted our planning

process. We still have a long way to go, however. Twenty of the

counties in our region are now designated as nonattainment under

the 8-hour ozone standard, with a portion of two other counties

also designated nonattainment under the Federal PM2.5 standard.

We continue to deal with a number of significant issues related to

air quality planning.
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Of particular concern just mentioned seconds ago by Senator

Isakson is the pending appeal in the 11th Circuit Court of Appeals

concerning the Clean Air Act requirement to implement RFG for

the 1-hour ozone standard. Technical analysis has shown that this

fuel blend will actually contribute an extra 1 ton per day in the 13-

county core area of VOCs and 11.5 tons a day of additional NOx

if we are required to use this RFG. This is a classic example of a

well-intended Federal standard being implemented uniformly without consideration or flexibility given to the State and local governments to meet their unique conditions.

The ARC, along with our State Air Quality Agency, EPD, requested legislative and Agency relief. We specifically requested a

waiver of 2 years from this requirement. But that was not granted.

Conflicts, such as the pending litigation, create uncertainty in the

modeling process and inconsistency in the planning process and

make it very difficult to develop an accurate emissions inventory.

Similarly, we are frustrated with the continued delay in the release of rules and guidance documents that direct implementation

of the new standards. Much of the burden of implementing the new

standards could be alleviated if rulemaking and guidance were provided in a timely manner. The efforts of MPOs and States who are

trying to meet the statutory deadlines for conformity, attainment,

etc., must be recognized.

These deadlines are fixed by law, yet dates to receive rules and

guidance continually slip months, even years, past promised timeframes. This makes future compliance to implement the new standards all the more difficult, and needs to be addressed as we move

forward.

Our success in Atlanta was achieved through a partnership with

Federal, State and local authorities, businesses, industry and other

stakeholders. It took years to implement, required difficult choices

and shared sacrifices by all. We are just now seeing the benefits

of the collective hard work. The new standards will require a

change to our process, additional and significant resource expenditures, and additional complexity to an already complicated transportation planning process.

When implementing the new standards, it is important that the

Federal Government work in the true spirit of a partnership and

provide the very same flexibility to MPOs and States that our Federal partners themselves expect.

The most important lesson we learned in our 15-year struggle to

reach attainment status is the ability to maintain flexibility and

control in implementing pollution control measures. We must have

the ability to implement innovative, proactive measures to improve

air quality in our own unique region.

Chairman Voinovich, you have already shown great leadership in

this area through introduction of the Diesel Emissions Reduction

Act of 2005. This legislation is a perfect example of providing nonattainment areas the opportunity and flexibility they need to design programs to fit their own unique needs. This is exactly what

we need more of in areas such as Atlanta and where our focus

needs to be.

In conclusion, we accept and are actively preparing for the challenges and growth that our region will face in the years to come.
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It is anticipated that we will have another 2.3 million people in our

region over the next 25 years, which will bring us to a little over

6 million. We acknowledge that environmental standards play an

important role in how we manage and cope with this growth.

To ensure that new standards are implemented efficiently, we

must have support from Federal partners in providing us effective

guidance and the means by which to meet clean air standards in

a manner suitable to our unique region.

Mr. Chairman and members of the committee, we look forward

to working with you and others as we collectively implement air

quality standards that protect our citizens from poor air quality.

Once again on behalf of the ARC, I thank you for this opportunity

to present our views, and I am happy to answer questions you

might have. Thank you.

Senator VOINOVICH. Thank you, Mr. Olens.

Mr. Werner.

STATEMENT OF JAMES WERNER, DIRECTOR, DIVISION OF AIR

AND WASTE MANAGEMENT, DELAWARE DEPARTMENT OF

NATURAL RESOURCES AND ENVIRONMENTAL CONTROL

Mr. WERNER. Thank you, Mr. Chairman and Senator Carper.

Thank you for the opportunity to appear before you today. I want

to also introduce my colleague, Ali Mirzakhalili, who is our air

quality manager for the State of Delaware, who has been through

the wars on coming into compliance.

As you noted earlier, Senator, we remain in nonattainment for

ozone, even though we have met the 1-hour standard, we now face

the challenge of meeting the 8-hour standard.

Delaware’s situation is essentially a downwind State. The Senator earlier referred to the situation where even if everybody depopulated and we shut down industry, they would still be in noncompliance. That is more or less our situation. So we can’t do it

alone. But we have an enormous opportunity to do things. And that

would really be the theme, the bottom line that I would leave you

with today, is first, allow States to do what States can do best, and

don’t ignore the health benefits by staying on with the deadlines.

Let me at the outset again add my thanks to the leadership of

both Senator Voinovich and Senator Carper in their work on the

Diesel Emissions Reduction Act. We add our support to the recommendation of the Administration to include within its fiscal year

2007 budget request the $200 million requested. We will be looking

with keen interest that first week of February whether or not that

request is included in the fiscal year 2007 budget.

I am going to talk today about first, health effects, the ozone

standard, PM fine and then last the CAIR role. The first thing that

we need to keep in mind or remind ourselves is really the health

benefits. A lot has been mentioned about that already. In Delaware, we recently released a study in conjunction with our Division

of Public Health on the asthma burden, noting that in Delaware,

the number of cases of asthma is increasing, which adds a tremendous burden to individuals, families, communities and businesses.

We feel like we have been here before. I myself was involved a

bit in the analysis on what was called the Unfinished Business Report in the 1980’s, later with the Science Advisory Board, analyzed
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further at OIRA, the White House OMB Office did a similar review, identifying that clearly the criteria air pollutants control far

outweighed the costs for that. This is not to say we can ignore the

standard.

In fact, I would very much emphasize that we all have to do our

part in streamlining permitting, looking for the most cost-effective

measures to reduce the contaminants. We are doing exactly that.

We just completed what we call the value stream mapping process,

which is a business tool to streamline our permitting process. We

are going to continue this effort to improve the bureaucratic efficiency by using an air forum process to continually hear from the

regulated community specific mechanisms we can do to reduce

costs, but not necessarily delay or compromise any of our air quality benefits.

So again, the health costs have been proven over and over again

to be far exceeding the implementation costs.

Let me go quickly to ozone. The ozone issue is perhaps Delaware’s biggest issue, again mainly from the upstream sources that

cook in the air and end up on our doorstep. It is a little frustrating

that the changing sciences has resulted in a changing goal line, but

for many of us, we saw that coming in the 1970’s and 1980’s when

the science showed us that it was chronic exposure to ozone, not

the episodic 1-hour. So it is not as if this is a surprise that we deal

with the 8-hour standard.

It was as early as 1996 that we knew the benefits far outweighed

the costs. We were engaged vigorously in the Ozone Transport

Commission efforts and would offer for consideration the OTC

CAIR PLUS proposals that offer a variety of measures that we

could implement. I am also pleased to announce today that just in

the past few days, our Secretary, John Hughes, signed a start-action notice which puts into motion the gears for the so-called 3–

PLUS 1P, it is a multi-pollutant bill that looks at both the NOx,

SOx and mercury, but also recognizes our commitment on carbon

dioxide controls as part of the regional greenhouse gas initiative in

the northeastern States. It is not broadly all the greenhouse gases,

it is just CO2. But again to reemphasize the theme for today, Delaware’s solutions for Delaware’s problems and issues. In particular, let me just

highlight one, and we have a whole list in our written testimony,

lightering. This is not an issue that comes up in Oklahoma or Missouri. But we have supertankers coming in off the Atlantic Ocean

that have to remove part of their load, from a million gallon tanker

to a 350,000 gallon barge to be able to come up the river into the

variety of refineries. We have two refineries in Delaware, one of

which is one of the few refineries that handles sour crude, with

high levels of sulfur. The lightering is essential to prevent oil spills,

lighten the load.

Without any controls, we are talking about 2,000 tons of VOCs.

We have worked out, I think, a win-win solution where they are

doing essentially the vapor recovery. I think it is a real good example of coming up with a local solution to a local problem that we

need the flexibility to do.

The PM fine rule is the next big challenge we have. Again, the

regulatory efforts are chasing the science. We know the SIP is
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going to be an extraordinary challenge for us, not made easier by

the delay in the implementation rule. We are still optimistic that

we will be able to move forward.

But certainly delays in the name of harmonization will be a tremendous problem for us. Again, we are in nonattainment for that

already in our northern most populous county. I see the red light

on, so let me go right to CAIR, which is of course the most recent

effort. It is a good rule, very important for us particularly given our

downwind State. But it is not enough. The coverage doesn’t take

care of the issue of the deadlines or perhaps not stringent enough.

But certainly it is clear that any legislation that would essentially duplicate the CAIR requirements really does not help Delaware in this situation. Even with CAIR, we don’t make it to the

deadline.

In conclusion, there are certain rules that we should render unto

EPA, as somebody referred to Caesar earlier, and certain issues

you should render unto States. Please don’t hobble the States’ ability to address the unique problems and be creative in doing that.

With that, I will be happy to answer any questions, and again,

thank you for the opportunity to appear before you.

Senator VOINOVICH. Thank you very much.

Mr. Moret.

STATEMENT OF STEPHEN MORET, PRESIDENT AND CEO,

BATON ROUGE AREA CHAMBER OF COMMERCE

Mr. MORET. Senator Voinovich, members of the committee, I am

delighted to be here with you.

Senator Voinovich, I have a special affinity for your State of

Ohio. Two years ago there I met a wonderful young lady who is

now my wife, so it has a special place in my heart.

My organization, the Baton Rouge Area Chamber of Commerce,

is made up of over 1,500 businesses throughout the Greater Baton

Rouge area. They range from small Mom and Pop shops to large

multi-national corporations like the Shaw Group. But certainly the

vast majority are small business owners.

As the voice of the Baton Rouge area business community, we

promote economic and community development for our area. If you

were to sum it up, our single overriding goal is to make the Baton

Rouge area a better place in which to work and live.

Fifteen years ago, after passage of the Clean Air Act amendments of 1990, we were designated as a nonattainment region for

ozone, in fact, a serious nonattainment area. We have taken that

very seriously for a number of reasons. Certainly the obvious ones

are the legal and economic implications. But in addition to that, we

want the Baton Rouge area to be a place that attracts talented professionals from around the country. So from a business perspective,

the quality there is very important to us.

I think perhaps most importantly from a personal level, we live

there. Our families live there, our children live there. I myself have

a young son, so this is something that is very important to me personally.

Our community has worked very diligently over the last 15 years

in concert with our State Department of Environmental Quality

and the EPA to improve the air quality and particularly to focus
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on the ozone issue. We have enacted laws and regulations to limit

emissions of ozone precursors, VOC and NOx.

We have installed a wide range of pollution control equipment,

some of it mandated, some of it voluntary. We have implemented

vehicle inspection programs, raised fees, performed transportation

studies, performed a range of modeling analyses and spent hundreds of millions of dollars addressing this issue.

In short, we have done everything that the Clean Air Act and the

EPA have either required and/or suggested.

I am pleased to say that the results have been nothing short of

tremendous, significantly in excess of State and Federal requirements. Just to give you a couple of examples, industrial VOC emissions in the Baton Rouge area have declined by 66 percent since

1990. Emissions of NOx emissions have declined by half, by 53 percent. Although we haven’t to this point actually come into compliance with the NAAQS, we have missed it only by one to two parts

per billion, a very, very small number, and a number which we believe is generated to a large extent from air transport issues connected with the Houston metro area.

Unfortunately, members of the committee, at the same time that

we have been making a great deal of progress, we have also had

to address some overly prescriptive elements of the Clean Air Act

that we think have made it actually more difficult for us to come

into compliance while at the same time creating perhaps unnecessary economic sanctions against our area. I want to give you just

a couple of examples.

First of all, reformulated gasoline, or RFG. A strict interpretation

of the Clean Air Act would suggest that we would have to implement RFG in the Baton Rouge metro area as a result of the attainment designation that we were at that point. Yet we have found,

and I don’t think that the EPA opposed this assessment, that not

only would the implementation of RFG create a great economic cost

to our region, in fact, around $150 million a year, but it would actually make the air quality worse, not better. It would actually

make the ozone problem worse.

The second example that I would share with you is that as we

have made a transition from the 1-hour standard to the 8-hour

standard which is considered more protective of human health, we

have still had to fight an issue in which there are some groups that

have suggested that should have to implement penalties associated

with the 1-hour standard, even though we are now in only marginal nonattainment with the 8-hour standard.

Some of these penalties, broad-based penalty fees and permitting

obstacles would really cripple our economy without having a direct

impact on the root cause of the ozone problem. In fact, we have estimated the costs to be in the range of $300 to $500 million per

year.

On these two issues alone, that has really forced us to put together a coalition of industry and community groups to essentially

pursue legal actions to try to address these somewhat unworkable

aspects of at least the implementation of the Clean Air Act. Even

though we expect both of these issues will ultimately get resolved

in a reasonable way, it has taken a lot of time and attention off
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of what we really want to focus on, which is improving the air

quality in the Baton Rouge area.

In the wake of Hurricane Katrina, which has brought tens of

thousands of new population to our area and challenges facing the

Baton Rouge area, it has made it even more difficult. Of course, I

believe, Senator Voinovich, as you mentioned earlier, the sky-high

prices of natural gas have created a huge challenge for our regional

economy, which is based very much on the petrochemical industry.

It is really a bedrock of our regional economy.

This is our community. We care about our community, we care

about the quality of the air. This is important to us well beyond

any Federal requirement.

Nevertheless, we welcome the accountability. But we ask that

you provide that accountability in a way that gives us the flexibility to do the right thing for air quality and the right thing for

our community. Thank you.

Senator VOINOVICH. Thank you very much.

I think we can all agree that our Nation’s air quality is improving. We have heard from EPA about the upcoming emission reductions under Federal programs such as CAIR, low-sulfur fuels and

cleaner engines. Later on I would really like to hear from Mr. Werner about the fact that, in terms of CAIR helping and even the

multi-pollution legislation in the Clear Skies, and why that

wouldn’t help you, if I heard correctly.

Our State and local witnesses confirm that these Federal programs are critical to improving local air quality. These Federal programs, however, achieve their full emissions reductions in 2015 as

opposed to the EPA attainment deadline of 2010. Given the timing,

I find interesting, and Senator Inhofe made reference to it, it was

in the Daily Environmental Reporter, he said a study in the Philadelphia area concluded that meeting the current ozone deadline

would cost the local economy 42,000 jobs versus a loss of only 1,000

if the deadline was harmonized with new Federal emissions programs. Moreover, the current deadline would result in a decline in

gross regional product of $5.5 billion for Philadelphia area versus

three-tenths of a billion for a harmonized deadline.

The difference in estimated State tax revenues also is striking: $273 million lost under the current deadline versus $6 million

under the more harmonized deadline. I ask unanimous consent

that the article be included in the record.

[The referenced material follows:]
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Senator VOINOVICH. Mr. Moret, it seems that harmonizing ozone

attainment deadlines with these Federal emission reduction programs would significantly lessen the compliance burden for Philadelphia. Would that be your conclusion with your experience in

Baton Rouge?

Mr. MORET. Senator Voinovich, that would be our conclusion. I

am not intimately familiar with that study, but certainly that general sentiment is one that resonates very much in the Baton Rouge

area. When we look at the planned actions of our industrial community, of DEQ and of some of the things that were referred to

earlier that are coming down from the EPA, we think they will

have a very significant impact on our ability to make it this last

little mile to come into compliance with the NAAQS for ozone. So

that is consistent with our experience.

Senator VOINOVICH. One of the things that has come out in the

testimony is the evaluation of the health benefits versus the cost

of reaching them. I think, Mr. Werner, you made reference to the

fact that you have been able to really capture those costs. I sure

would be interested in getting a copy of how you went about capturing those costs.

What I heard from you was that the costs, the cost savings from

moving forward with these standards would be health cost benefits

that would far outweigh the cost of going forward with the improvement in reducing our emissions. Did I hear that right?

Mr. WERNER. What I referred to is not specifically an analysis

that I personally or the State was able to do, but rather to really

decades of studies performed by a variety of people, including EPA,

the National Academy of Sciences, the White House Office of Management and Budget, Office of Information and Regulatory Affairs

that tried to valuate the reduced health burden from air pollution

controls.

In science, when you see reproducibility results, it adds more

confidence to the results. That is really what we have seen, is a variety of methodologies, a variety of studies by a variety of people

all coming up with the same conclusion. The criteria air pollutant

control clearly has benefits that far outweigh the costs in virtually

every study that has been conducted.

Senator VOINOVICH. Have you done a study of your own in regard to this?

Mr. WERNER. No, these are very large, multi-million dollar,

multi-year studies that no, I personally didn’t do. I served in a consulting firm where we had several hundred people working at it.

I was just one analyst of many contributing to that effort.

Senator VOINOVICH. But you based it on these national studies

made by respected organizations and then kind of extrapolated it

to your area, is that basically it?

Mr. WERNER. I am not saying specifically Delaware. I was referring to all those other studies that I just mentioned.

Senator VOINOVICH. I am just talking about Delaware.

Mr. WERNER. I don’t have any specific data about Delaware.

Senator VOINOVICH. But your conclusion is that the cost of, the

health benefit costs would far outweigh, a reduction in health benefit costs would far outweigh any kind of compliance costs?
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Mr. WERNER. In Delaware, that’s a relatively easy one, given

that many of the costs would be imposed on upwind sources, and

the benefit would be accrued to our own citizens. So that makes it

an even easier analysis.

I might add with the NERA study, if I could, sir, that we haven’t

had a chance to fully evaluate it. But that is a study that of course

has not been published in a peer-reviewed scientific journal, undergoing the same sort of vigorous peer review you normally see. It

does consider just the costs. But it completely lacks any consideration for the benefits.

It also avoids the simple point that is really a matter for lawyers

and the legislation, that there is really an opportunity to get an extension if the State of Pennsylvania wanted to. That might be

something worthwhile, looking into the State of Pennsylvania’s

plans for finding the most cost-effective mechanisms.

Senator VOINOVICH. But you are not going to be able to comply

by 2010?

Mr. WERNER. Right now, the modeling shows that we will not.

We are going to make every effort. I guess the point is, whatever

happens between now and 2010, it is certainly on the glide path,

it is on the same path for getting to later compliance for whatever

the rules and implementation are.

Senator VOINOVICH. Have you evaluated what impact not being

in compliance will have on, or the expectation that you won’t reach

it in 2010 will have on your economic vitality in terms of the businesses?

Mr. WERNER. No, we haven’t. I would hate to speculate. Certainly that is a consideration.

Senator VOINOVICH. I’m sorry?

Mr. WERNER. I said, no, we have not. Certainly that is a consideration, but it is a hypothetical right now.

Senator VOINOVICH. Senator Carper.

Senator CARPER. Thanks, Mr. Chairman. I want to start, if I

could, with Jim Werner. You have mentioned this, I think a couple

of us have mentioned this as well, but I just want to return to it

again. In your testimony, you describe many of the actions that our

State has taken to reduce our air pollution. You have mentioned

again just in your last exchange with Governor Voinovich that even

with these actions, it is still tough for us to be in attainment if the

upwind States continue to postpone their deadlines or are allowed

to postpone their deadlines.

Did you want to add anything further on that?

Mr. WERNER. There is an enormous concern about the potential

that upwind States could delay their deadline. We think that’s just

essentially kicking the can down the road. All of our efforts, and

I list a whole range of efforts from architectural and industrial

maintenance, coatings, painting, a whole range of efforts, and we

are working hard to find the most creative and cost-effective solutions. Despite all that effort, if upwind States didn’t do their part,

we simply cannot meet the attainment deadlines. Extending the

deadlines would just make it harder.

Senator CARPER. In the context of national pollution programs,

when I say national pollution programs I am thinking of some

what we contemplate here before this committee like Clear Skies
41

or the Clean Power Act and the Clean Air Planning Act. In the context of national pollution programs like those, how important is it,

do you think, to maintain State and local authority to address residual pollution?

Mr. WERNER. I think it is absolutely critical, sir, respectfully. It

is, as I said, a team effort. There have to be the Federal programs

for particularly large sources, the large powerplants. There are big

issues that have yet to be addressed, a lot of diesel work that you

are providing leadership on. We have to have the ability to do our

own controls. I mentioned our efforts on lightering for tanker VOC

reduction.

If I could, I would like to come back to the relationship with the

contemplated legislation on Clear Skies. I didn’t mean to suggest,

Senator Voinovich, at all, that it wouldn’t be useful. It was simply

a concern that whatever is done in that area we would just as that

care be taken, no pun intended, that we make sure that it really

has value added beyond CAIR, that there are a variety of multipollutant legislation bills considered.

Some have more consideration than not for different sources and

deadlines. We just hope and ask that you make sure that it really

has value added for all the States as a small downwind State.

Senator VOINOVICH. Have you ever looked at it in terms of your

State, in terms of the levels and how those levels would be better

than, say, CAIR, or what levels would help you?

Mr. WERNER. There are certainly some that are better than others. I would be remiss if I didn’t say that we like Senator Carper’s

among the legislation.

Senator CARPER. God bless you.

[Laughter.]

Senator VOINOVICH. We are anxious to have Senator Carper’s

proposals, so we can negotiate something. I am anxious to do it, because I really believe that we would be far better off with legislation than we are with the CAIR rules that are already being questioned and lawsuits filed and all kinds of other things.

Mr. WERNER. Yes, absolutely.

Senator VOINOVICH. That’s been—we have an environmental policy by litigation, just go back to 1997, 2005, here we are. So I’m

stepping on your time.

Senator CARPER. That’s OK.

Let me ask one if I could of Mr. Olens. You mentioned your great

admiration for Senator Isakson. I would just say that those of us

in Delaware have a real high regard for him, too, and thanks for

sharing with us.

You said in your testimony that in Georgia you were not hearing

that attainment deadlines associated with new standards are a

concern. I think that’s what you said. If we are hearing anything,

it is that we need to address those standards in a timely manner.

Do you feel, even with the late release of EPA’s guidance to

States that you will be able to prepare an adequate SIP?

Mr. OLENS. Senator, we won’t meet the 8-hour ozone standard in

2007. We are looking at 2010. We will then reclassify from marginal to moderate. The delays clearly adversely affect implementation.
42

We have a great partnership between the MPO and the EPD,

which is the State equivalent of the EPA. After 15-plus years of

dealing with these issues, we are more ahead of the game than regions that are for the first time dealing with nonattainment issues.

There is the good news with the bad news, after you have been

doing this 15 years, you have a lot of the control measures, you

have a lot of the policies in place.

With regard to the PM2.5 standard, we have no expectation that

that will be easy, either. Delaying the rules adversely affects this

too. What I stated in the introductory report was that we will do

our best between the MPO and the State to get there. Keep in

mind in January 2004, we reclassified from serious to severe under

the 1-hour ozone standard. So the idea of having the Atlanta Journal reference that we went from marginal to moderate doesn’t have

the same negative connotation to me as the front page that said

reclassification to severe under to the 1-hour ozone standard.

So we are ahead of other regions with regard to having been

through this process. But clearly the delays with rules and the

delays with implementing controls adversely affects all of us. It is

my expectation that, for instance, with the 8-hour ozone standard,

we won’t meet 2007 and we will go to moderate and hopefully will

meet it in 2010.

Senator CARPER. All right, thanks very much. Again, our thanks

to each of our panelists. We appreciate very much your testimony

today, but also your service to our State and to our respective

States. Thank you.

Senator VOINOVICH. Senator Isakson.

Senator ISAKSON. Sam, in your testimony you said if we have

learned anything over the last 15 years, it is that flexibility is important in terms of reaching the appropriate solutions in terms of

pollution. We must have the ability to implement innovative,

proactive measures to improve our own air quality. Do you have

any suggestions for us as to what we can do as a Congress or what

the EPA as an agency can do to provide that flexibility?

Mr. OLENS. For instance, you heard today, Senator, from both

the gentleman from Baton Rouge as well as myself, that EPA

didn’t grant us the 2-year waiver for the RFG. It is nonsensical

that we are being asked to use fuel that will actually worsen our

air, rather than improve our air. In fact, the fuel that I believe

Senator Voinovich referenced earlier, or Senator Carper, that takes

effect in October 2006, that low-sulfur is once again not as clean

as the low-sulfur we currently use in our State.

So once again, we need you to provide that flexibility where EPA

looks at the uniqueness of each region and lets us do what actually

improves the air best in our region, rather than a one-size-fits-all

scenario. So I really think flexibility, as you referenced it, is the

main key for all of us.

Every region is different, and we have to be given that flexibility.

Whether it is through the rulemaking, whether it is through the

actual Clean Air Act, there doesn’t appear to be sufficient flexibility

now to really do what needs to be done.

Senator ISAKSON. I want the record to reflect that Sam had no

idea I was going to ask that question, I had no idea what his an-
43

swer would be, and I have never met Mr. Moret from Baton Rouge,

but I want to read a sentence from your testimony.

‘‘However, it is important to note that the existence of judicial

proceedings was the only avenue available to EPA under the Clean

Air Act to review the use of reformulated gas in Baton Rouge.’’ I

think that, combined with the answer that Commissioner Olens

gave, is the message to all of us that the Clean Air Act has the

Agency’s hands tied, which in turn ties the hands of the local community. In this particular case, the unintended, because it would

have never been intended, consequence of Federal action is to require two areas to sell a gas that pollutes worse than the gas they

are selling now. That doesn’t make any sense to anybody.

Furthermore, the courts end up being the ultimate arbiter of

plans and flexibility and proposals to clean up our air. With all due

respect to the judiciary, and for that matter to, I will use myself

as an example, I read my briefing papers on this last night, and

you get into even a simplified explanation of NOx, SOx, particulate

matter, things to the seventh power, I mean, it’s impossible to understand. I wonder how nine men and women in black robes in a

court can have any better luck with it.

So I think the lesson that we are hearing from these gentlemen

is that it is very important that we in Congress give the Agency

the directions, but also the flexibility to work with the communities

on those things that by virtue of nature, location or proximity affect their ability to be in attainment. That’s where we have tied the

hands of the Agency statutorily, which in turn has tied the hands

of local communities that are trying to do their thing.

I would submit to you also it is probably the reason that our previous witness could tell you that in 2015 80 percent would comply

and 20 percent wouldn’t. Because they pretty much know because

of the rigidity of the situation how little flexibility there is and how

some people are not going to be able to comply no matter what

happens. So that was not a question, that was a statement, but I

had to throw that in since these two gentlemen said exactly the

same thing.

I yield back.

Senator VOINOVICH. Thank you, Senator Isakson.

I too was perplexed, and as I recall, I think that under the law,

not only can they mandate reformulated gasoline but they can also

mandate emissions testing, too, if you are in a moderate attainment area.

Did I hear correctly that somebody talked about a waiver? Could

the EPA grant a waiver from the RFG for a couple of years?

Mr. OLENS. Senator, we requested a 2-year waiver, and it was

declined.

Senator VOINOVICH. OK, so the point is that, the testimony was

that they had to go to the RFG, but you are telling me that the

EPA does have the flexibility that they could waive that for 2

years, is that correct?

Mr. OLENS. Yes, sir.

Senator VOINOVICH. So I was just thinking, Senator Isakson,

maybe we need some law, but if they have that right to do that—

the lack of flexibility is something that all three of you would agree
44

needs to be really looked at in terms of the Environmental Protection Agency.

[Witnesses nod in the affirmative.]

Have you calculated the impact on your economy of being in noncompliance? You say you are not going to meet the deadline of

2010. What implications does that have in your community in

terms of jobs?

Mr. MORET. Senator, the impacts are on multiple levels. There

are impacts of being in nonattainment from the perspective that

many manufacturing facilities, many of them cleaner manufacturing facilities like automobile assembly plants, often will not consider our area because of the permitting challenges.

Senator VOINOVICH. In other words, the fact is that, as I found

this as Governor, that is why I worked so hard to get us into attainment, because my conclusion was that if it looks like you are

not in attainment, people that you would like to bring to your community just fly over you, they ignore you.

Mr. MORET. That is absolutely right.

Senator VOINOVICH. The next issue would be expansion of businesses. Why don’t you get into that a little bit?

Mr. MORET. If you think about how companies make site selection decisions, it is really first a site elimination process, and looking at factors that might make a community an unattractive place

in which to invest. We know many examples that the Baton Rouge

area, because of its nonattainment designation, even though we are

only in marginal nonattainment by a very, very small amount, that

we have lost out on many large clean projects that otherwise would

have gone to our area.

On the other hand, I mentioned to you earlier the issue of the

transition from the 1-hour standard to the 8-hour standard. Under

the 1-hour standard, we were slated to have up to $100 million a

year in penalty fees for our local and regional industry. Very significant restrictions on permitting, expansion projects and so forth.

So we actually, before Hurricane Katrina, had identified this as

actually the single biggest economic threat facing the Baton Rouge

area. The structure of that set of requirements and penalties is

such that it would have had an impact, we estimate, of around half

a billion dollars a year drain that really would have never gone

away, on top of the challenge that is already faced by a community

like ours of having a nonattainment label, if you will, on your community.

Senator ISAKSON. Mr. Chairman, can I just interject?

Senator VOINOVICH. Go ahead.

Senator ISAKSON. One of the important points about the economic consideration is not choosing dollars over health, but economic development provides the resources that allow communities

to meet the challenges financially to improve the quality of the air.

You actually have, again unintended, but actual consequence, as

Stephen has said here, of industries, non-polluting industries, flying right over you and going somewhere else. We actually, if we

aren’t careful, can promote outsourcing by virtue of an overly regulatory environment without the flexibility to meet the standards.

Nobody in here has said anything other than they all want to be

compliant. Everybody wants clean air, and every community in
45

America has cleaner air than it had at the time the Clean Air Act

was passed. We are moving in the right direction. I think we are

now at the critical point where in the absence of flexibility and in

the absence of some reasonable approaches, we could take areas

hardest hit and actually reduce the resources they will have available to them to comply with the act and put them in a very static

economic condition which would even compromise that further. So

your point is well taken and the testimony today I think has reflected exactly that result if we are not careful.

Senator VOINOVICH. The other interesting thing is that, this gets

into the whole issue of carbon. Back when I was Governor, the options to go other places were less than they are today. So if I am

a business person and I can locate a facility somewhere, in the old

days it was competition among jurisdictions in the United States.

But the competition now has changed dramatically. If I am a

businessman and I can put a plant in China and I can come up

with lower costs and I don’t have the environmental costs that I

have if I am in the United States, I don’t have the health care costs

that I have, my energy costs are lower, I finally conclude, I’m leaving. It seems to me that if we don’t start looking at—that gets back

to this whole concept of harmonizing energy, environment and the

economy. There has to be some compromise made here, because I

have been here, this is my 7th year, it just seems like groups are

going different directions. The only major improvement I have seen

is on this retrofitting of diesel engines, we got the groups together.

But unless there is some kind of coming together, a compromise,

I just see that we are going to lose more and more jobs in this

country to other places. We won’t have the money to buy the technology that we need to further move forward with doing a better

job of taking our missions.

So there just has to be some type of balance here. I get back to

Mr. Werner, you were talking about the health care benefits. I just

asked my staff, I would really like to see how that works out in

terms of the costs that are involved. You talked about asthma, the

Senator from New Jersey always brings up asthma.

I remember testifying, I think before this committee, back when

I was Governor on the whole issue of asthma and what causes

asthma. We said, ‘‘well, it’s the air that people are breathing.’’

Some of the experts say that if you did a better job of cleaning

places, the health code, and putting an air conditioner in someone’s

house, you would do more to help their asthma than if you spent

all the money to reduce the emissions in the air on the outside.

So the point is that, some of these things have to be worked out.

There is some balance that has to be struck in order for us to take

care of our health needs, for sure. But we also have to pay attention to what our economic needs are also, or we are going to be in

deep trouble.

Mr. WERNER. Senator, if I could please.

Senator VOINOVICH. Yes.

Mr. WERNER. I well appreciate the concerns about costs. Again,

we are the people who sit across the table every day talking with

our colleagues and our neighbors who have to run businesses. One

of the things that we hear is it is not so much the costs of the control equipment, but really the costs of the uncertainty and the costs
46

of delay. That is why we are working so terribly hard to improve

the efficiency, because we again hear that directly. Maybe that is

slicing it too finely, what the type of costs we are considering.

We hear, we don’t mind putting in the controls, but we want to

know clearly what do you need and we want to have a permit relatively quickly, so we can move ahead. It gets back to the notion

of harmonizing, perhaps adding on to your concern. So that as they

are constructing, they are looking at schedules for building or expanding or something, they have a schedule that includes the environmental considerations and not as an add-on, oh, by the way, you

put it into the overall scheduled things you are doing. Those are

the bigger costs, it is really not so much of whether we comply or

we clean the air but how we do it and having the flexibility and

a harmonized solution. Again, I just hope the word harmonization

doesn’t result in just simply delays overall.

Senator VOINOVICH. I think that one of the things that was in

our Clear Skies legislation was that if you had communities like

Baton Rouge that were moving along and that would be in compliance by 2015, say, for example, that the draconian provisions of the

Act wouldn’t come down on their back. Right now, 2010 comes

along and boom, it happens.

The other thing that I think was good about it is that everybody

knew exactly what the rules would be, it would be in legislation so

that the power companies, and I know you are concerned about

ozone transport, would know full well, here’s the deal and they

would move forward. They are talking about investing $50 billion

and doing some stuff that maybe some of them should have done

before but they didn’t do it because of questions about new source

review. We cleared up new source review issues.

I honestly believe if we can eliminate these uncertainties as we

did with the acid rain provisions of the Clean Air Act, at least we

knew what they were, I think we would be much better off. We

have had the same thing with the issue of carbon, we have to have

carbon controlled in our pollution control legislation.

I hear from the Adirondack Council and other places, they say,

‘‘look, while you guys are just kind of pish-poshing around, we are

still seeing the acid rain here.’’ Do NOx, SOx, do mercury, work out

some kind of a compromise on carbon, but let’s get moving. Let’s

get it done, we’re waiting.

I just want to say thank you very much for your being here. We

appreciate the perspective that you brought to the committee. Senator Isakson, do you have any other questions?

Senator ISAKSON. No. Thank you, Mr. Chairman, for holding the

hearing.

Senator VOINOVICH. Thank you very much for being here.

[Whereupon, at 11:26 a.m., the subcommittee was adjourned.]

[Additional statements submitted for the record follow.]

STATEMENT OF SENATOR JAMES M. JEFFORDS, U.S. SENATOR FROM THE

STATE OF VERMONT

The National Ambient Air Quality Standards are the cornerstone of the Clean Air

Act. Their implementation is a matter of life and death for millions of Americans.

The EPA itself has stated that ‘‘batteries of scientific studies have linked particulate matter, especially fine particles . . . with a series of significant health problems, including premature death.’’
47

Researchers at Harvard University have concluded that approximately 70,000

Americans die prematurely as a result of air pollution. The primary cause of these

deaths is fine particulate matter, which is emitted from sources such as powerplants, diesel fuel combustion and other sources. However, recent evidence also indicates that ozone contributes to premature mortality as well.

Other health effects, such as increased risk of stroke, increased asthma, and other

respiratory symptoms requiring hospitalization are also caused by air pollution.

The National Ambient Air Quality Standards for Particulate Matter and Ozone

are necessary to protect against these effects and to protect public health ‘‘with an

adequate margin of safety.’’

Although EPA recognized these facts in 1997 and set appropriate standards, we

remain on the threshold of implementing such standards.

The fact that we have taken nearly a decade to move forward is a shameful fact.

Tens of thousands of Americans have suffered in the meantime and will continue

to suffer, or even die, each year that we delay.

There are many reasons for these delays, but we must not forget that industry

challenged these standards and EPA was forced to go all the way to the Supreme

Court to defend them. Now many of these same parties seek to further delay implementation of the standards.

Since the Supreme Court decision in 2001, EPA has moved very slowly to develop

the rules that States need to implement these standards.

EPA has only yesterday finalized its complete set of ozone implementation rules

and only last month did it propose a PM Implementation Rule—after that rule sat

at the Office of Management and Budget for nearly a year. That leaves us without

a complete set of implementation rules more than 8 years after the standards were

first set.

At the same time, we have seen numerous attempts to substantially weaken the

Clean Air Act. These include changes to New Source Review that allow legions of

large polluting sources to continue emitting without controls, changes to the mercury rules that allow toxic levels of mercury to be emitted and traded, and a host

of implementation rules that postpone key local controls until 2015 or beyond.

The net result of these policies is that millions of Americans will continue to suffer the ill effects of air pollution, including premature death, for many years to

come. It is high time that we implement the standards that the Supreme Court unanimously upheld nearly 5 years ago. It is high time that EPA provides States with

the tools they need to continue cleaning up the air. It is high time that EPA stopped

looking to undermine key provisions of the Clean Air Act and seek to enforce those

requirements to the full extent of their abilities.

There may be some at this hearing that believe we need additional time to implement these standards and that we should put priority on keeping the costs of air

pollution control as low as possible in the short term. To them I say we cannot afford those delays. We cannot afford to continue to expose our citizens to increased

death and chronic health effects from air pollution. All of the EPA analyses show

that the benefits of controlling these pollutants greatly outweigh the costs of cleanup.

During the 1990s we made substantial progress in cleaning up the air during a

period of great economic growth. That record demonstrates that we can have a

healthy economy and clean air at the same time. I am not willing to sacrifice the

health of millions of Americans based on the faulty premise that clean air costs jobs.

Clean air creates jobs and saves lives.

Others may say we need certainty of requirements before we can begin to take

action. To them I say there is no certainty in strategies of delay and waiting for

others to reduce, there is only certainty in committing now to getting the job done

and requiring everyone to do their part.

We should also recognize that areas that fail to control local sources of pollution

and that are waiting for national and regional measures to work are consigning both

their own citizens and the citizens of areas downwind to additional health effects.

Vermont is such a downwind State. Last summer, schools in my State were forced

to postpone sports events due to air pollution, most of which came from outside the

State.

EPA’s plan would be for States like Vermont to continue to receive dirty air from

other States for many years to come. That result is unacceptable.

This is no time to contemplate further delay. We need to move forward as quickly

as possible in implementing these standards. We need additional reductions well beyond those proposed by EPA. Even under EPA’s plans, many will continue to

breathe unhealthy air after 2020. At that point, the Clean Air Act will be half a

century old.
48

I believe we must work harder to realize the promise that this committee made

in the original Clean Air Act of 1970, when it directed that we would attain Clean

Air standards ‘‘as expeditiously as practicable’’ and that we would ‘‘protect public

health with an adequate margin of safety.’’

That promise, which remains in the law today, cannot be kept by plans that allow

millions of Americans to breathe unhealthy air for decades to come.

Finally, I want to note that we continue to allow dangerous emissions of greenhouse gases into the atmosphere and our continued delay in that regard risks untold consequences, to human health, to our environment and to the well-being of

mankind as a whole. That situation must change, and it must change soon, if we

are to fulfill our obligation to leave this world in better shape than when we found

it.

STATEMENT OF WILLIAM WEHRUM, ACTING ASSISTANT ADMINISTRATOR, OFFICE OF

AIR AND RADIATION, ENVIRONMENTAL PROTECTION AGENCY

Thank you Mr. Chairman and members of the Environment and Public Works’

Subcommittee for the opportunity to speak with you today about implementing the

National Ambient Air Quality Standards (NAAQS) for fine particles and groundlevel ozone.

There is no doubt that emissions of key pollutants into the air are going down

in the United States. America’s air is the cleanest in three decades. Emissions have

continued to decrease even as our economy has increased more than 150 percent.

Since 1970, the aggregate total emissions for the six pollutants [Carbon Monoxide

(CO), Nitrogen Oxides (NOx), Sulfur Dioxide (SO2), Particulate Matter (PM), Volatile Organic Compounds (VOCs) and Lead (Pb)] have been cut from 301.5 million

tons per year to 138.7 million tons per year, a decrease of 54 percent. Total 2004

emissions were down 21.5 million tons since 2000, a 13.4 percent reduction.

The Clean Air Act has been a critical driver of that success. The goal of the Clean

Air Act is to bring all areas into attainment with national air quality standards,

so that the air is healthy to breathe for residents of every neighborhood, town, city

and county. The Clean Air Act provides us with the structure for achieving that goal

as expeditiously as practicable. In addition to setting the air quality standards, EPA

establishes national emissions standards for certain important sources, such as

motor vehicles, and requires States to control interstate pollution transport.

The Act requires States to take the lead role in studying the unique air pollution

problems in their areas and in crafting State Implementation Plans that contain

strategies for solving them. EPA assists the States by providing technical support,

for example, on emission reduction measures and costs. Together, we will find an

appropriate mix of national, regional, State, and local measures to bring all areas

into attainment with the national standards.

The record of the Clean Air Act demonstrates that the structure outlined in the

law is sound. For example, we designated 101 areas as nonattainment for the 1-

hour ozone standard. Seventy-nine of them have met that standard. The story is

similar for particulate matter smaller than 10 micrometers (PM–10) and carbon

monoxide nonattainment areas. Eighty-seven areas were designated nonattainment

for PM–10 in the early 1990s. Sixty-four now meet that standard. For carbon monoxide, air quality in all of the original 43 nonattainment areas now meets the

NAAQS. Even in cities that have not attained the 1-hour ozone or PM–10 standards, the number of days above the standards is down significantly. By any measure, this is a success story.

EPA has put in place national and regional pollution control programs that will

go a long way toward assisting the States in solving the fine particle and ozone nonattainment problems. Our modeling indicates that by 2010, 18 of the 39 areas currently not attaining the fine particle standard will come into attainment with the

regulatory programs already in place, including the Clean Air Interstate Rule, Clean

Diesel Rules and other Federal measures even assuming no additional local controls

are adopted. Four more PM2.5 areas are projected to attain the standards by 2015

based on the implementation of these programs.

The story is also good for ozone. 104 of the 126 current 8-hour ozone nonattainment areas will attain the NAAQS by 2010 because of national mobile and stationary source control programs. By 2015, modeling shows that only 10 8-hour ozone

nonattainment areas will remain.

These EPA programs are an excellent example of where Federal and regional programs can assist the States in meeting their obligation to attain national air quality

standards. For areas that will still be out of attainment with the ozone and PM2.5

standards, States will need to take additional local steps to reduce ozone and fine
49

particles from other sources. In many cases, this burden will be lighter due to Federal programs.

Today, I would like to give you an overview of the fine particle and ozone problems, some of the key national rules that will help reduce levels of these pollutants,

and ways in which EPA is assisting the States as they develop plans to achieve

these air quality standards.

FINE PARTICLE AND OZONE HEALTH EFFECTS

Americans will realize significant health benefits when all areas of the country

meet the 8-hour ozone and fine particle standards. Ground-level ozone continues to

be a pollution problem in many areas of the United States. Ozone (a major component of smog) is a significant health concern, particularly for people with asthma

and other respiratory diseases, and children and adults who are active outdoors in

the summertime. Ozone can exacerbate respiratory symptoms, such as coughing and

pain when breathing deeply. Ozone may reduce lung function and inflame the linings of the lung. Ozone has also been associated with increased hospitalizations and

emergency room visits for respiratory causes. Repeated exposure over time may permanently damage lung tissue.

Ozone is rarely emitted directly into the air but is formed by the reaction of volatile organic compounds (VOCs) and NOx in the presence of sunlight. Ground-level

ozone forms readily in the atmosphere, usually during hot summer weather. VOCs

are emitted from a variety of sources, including motor vehicles, chemical plants, refineries, factories, consumer and commercial products, other industrial sources, and

biogenic sources. NOx is emitted from motor vehicles, powerplants, and other

sources of combustion. Changing weather patterns contribute to yearly differences

in ozone concentrations from region to region. Ozone and the pollutants that form

ozone also can be transported into an area from pollution sources located hundreds

of miles upwind. Based on 2002–04 data, more than 138 million people live in nonattainment areas that violate the 8-hour ozone standard.

Of the many air pollutants regulated by EPA, fine particle pollution is perhaps

the greatest threat to public health. Dozens of studies in the peer-reviewed literature have found that these microscopic particles can reach the deepest regions

of the lungs. Exposure to fine particles is associated with premature death, as well

as asthma attacks, chronic bronchitis, decreased lung function, and respiratory disease. Exposure is also associated with aggravation of heart disease, leading to increased hospitalizations, emergency room and doctor visits, and use of medication.

Based on data through 2004, 90 million people live in areas not attaining the fine

particle standards, primarily in California and in the eastern half of the United

States.

Particulate matter is the general term used for a mixture of solid particles and

liquid droplets found in the air. PM2.5 describes the ‘‘fine’’ particles that are less

than or equal to 2.5 micrometers in diameter. PM2.5 is formed mostly through atmospheric chemical reactions. These reactions involve a number of precursor gases

including sulfur dioxide from sources such as industrial facilities and powerplants;

nitrogen oxides from sources such as automobiles, diesel engines, powerplants and

other combustion sources; carbon formed from organic compounds, including a number of volatile organic compounds from automobiles and industrial facilities; and

ammonia from various sources. PM2.5 can also be emitted directly from certain

sources, such as industrial facilities, diesel engines and fire. PM2.5 concentrations

can be elevated at all times of the year, not just in the summertime. Changing

weather patterns contribute to yearly differences in PM2.5 concentrations from region to region. Also, PM2.5 can be transported into an area from sources located hundreds or thousands of miles upwind.

NATIONAL PROGRAMS

There is no doubt that emissions of key pollutants into the air are going down

in the United States and that the Clean Air Act has been a critical component of

that improvement. Congress carefully laid out the role that States and EPA must

play in implementing the NAAQS. Among other things, EPA is responsible for setting the standards, designating areas as attaining or not attaining the standards,

addressing the regional, national, and international aspects of air pollution problems, and helping the States deal with problems that are generated locally. States

are given the primary responsibility for assuring that air quality within its borders

is maintained. This is achieved through source-specific requirements in State Implementation Plans.
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Several Federal programs already in place will help bring many areas into attainment and help others come much closer to attainment, thus making the burden of

local controls lighter.

MOBILE SOURCE SECTOR

It is no surprise that the transportation sector—cars, buses, and trucks—contributes a significant amount to air pollution problems in many communities. Emissions

of NOx, PM and other pollutants have been and will continue to decrease significantly as a result of the successful implementation of the series of EPA regulations

controlling emissions from new mobile sources and the fuels they use.

Most recently, EPA has adopted emission standards for new nonroad diesel engines used in construction, agricultural, and industrial operations. These engine

standards will be combined with very low sulfur limits in the fuel for these engines,

which will allow optimal performance of the engines’ pollution control equipment.

EPA’s nonroad standards are estimated to reduce 129,000 tons of PM and 738,000

tons of NOx in 2030, and prevent annually 12,000 premature mortalities, 15,000

nonfatal heart attacks, and almost 9,000 hospital admissions.

Fine particle and ozone pollution will also decrease as a result of EPA’s 2007

Clean Diesel Truck and Bus Rule to clean up pollution from new diesel trucks and

buses. When fully phased in, these rules will result in diesel trucks and buses being

95 percent cleaner than today’s models for smog-causing emissions and 90 percent

cleaner for particulate matter. The rule also requires very low sulfur diesel fuel to

enable the use of advanced aftertreatment technologies. We estimate that this program will prevent 8,300 premature deaths and 1.5 million lost work days among

other quantified benefits.

As a result of this program, there will be a dramatic transformation of diesel engines over the next decade. The benefits of these rules will be added to those from

two other mobile source rules. Starting with the 2004 model year, cars and light

trucks must comply with the Tier II program which established tighter tailpipe

standards and limited the amount of sulfur in gasoline. The program will be fully

phased in by 2009. This rule requires for the first time that larger vehicles like

SUVs, minivans and pick-up trucks meet the same tailpipe emissions standards as

cars. The associated gasoline sulfur standards will ensure the effectiveness of emission-control technologies in vehicles. These new standards require passenger vehicles to be 77 to 95 percent cleaner than those on the road today.

We have a number of other nationally applicable programs that will achieve needed reductions, such as new standards for motorcycles and lawn and garden equipment. We are also working on new requirements, for sources like locomotive and

marine engines, which will help States meet their clean air goals.

VOLUNTARY PROGRAMS

In addition to our regulatory programs, EPA has a number of innovative voluntary programs that work to achieve measurable environmental results in a costeffective and beneficial way without the need for regulation. These programs are

available to assist States and Tribes in implementing programs that reduce ozone

and particulate matter. I want to thank you, Mr. Chairman, for the leadership you

have shown in the effort to reduce diesel emissions. Your recent legislation, included

in the Energy Policy Act of 2005, shows strong support for voluntary retrofit programs.

National Clean Diesel Campaign

Building on the successes of EPA’s regulatory and voluntary efforts to reduce

emissions, the Agency created the National Clean Diesel Campaign (NCDC) to address the important issue of diesel emissions. The National Clean Diesel Campaign

encompasses the stringent regulations that reduce emissions from new engines and

addresses the more than 11 million engines in operation today through voluntary

approaches. Successful programs like the Clean School Bus USA and the SmartWay

Transport Partnership are important parts of the NCDC. Technical and financial assistance is provided to stakeholders interested in reducing their emissions effectively and efficiently. Strategies include reducing unnecessary truck and rail idling

along major transportation corridors and in rail yards, use of ultra-low sulfur fuel

in advance of Federal compliance dates, replacing old vehicles or engines with cleaner new models, installing ‘‘retrofit’’ control technologies on existing vehicles or engines, and other approaches. NCDC projects exist in 44 States.

The National Clean Diesel Campaign has created a number of tools to assist

States and local governments in reducing diesel emissions. EPA provides technical

assistance to help educate stakeholders on the wide array of clean diesel tech-
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nologies and strategies that can be used to cost effectively reduce diesel pollution.

NCDC’s vendor-funded technology verification program evaluates the effectiveness

and efficacy of clean diesel technologies so that users of the technology can be assured that the emissions benefits captured in the field match those advertised by

the manufacturer. The Agency has also created peer-reviewed emission models and

provides State Implementation Plan (SIP) guidance to State air partners so that

they may implement clean diesel strategies as cost effectively as possible. In the

coming months guidance for quantifying and using diesel retrofit projects in SIP and

conformity plans will be made available and the Agency is also working with the

Department of Transportation to provide guidance for utilizing Congestion Mitigation and Air Quality Improvement Program funding for diesel retrofit projects.

MARKET-BASED PROGRAMS

Emissions from powerplants contribute to most of the nonattainment areas in the

eastern United States. The nitrogen oxides and sulfur dioxide from these facilities

mix with emissions from local and biogenic sources to cause ozone and fine particle

problems. Through market-based programs, emissions from this sector have dropped

and will continue to drop for years to come.

Since 1995, EPA has been implementing the Acid Rain Program to reduce SO2

and NOx emissions from powerplants nationwide. The centerpiece of the program

is an innovative, market-based ‘‘cap-and-trade’’ approach to achieve a nearly 50 percent reduction in SO2 emissions from 1980 levels. The results of the program have

been dramatic—and unprecedented. Compliance has been nearly 100 percent. Reductions in powerplant SO2 emissions were larger and earlier than required, confirming the high value of a cap and trade system and the high value of its effects—

earlier human health and environmental benefits. Now, in the 10th year of the program, we know that the greatest SO2 emissions reductions were achieved in the

highest SO2-emitting States; acid deposition dramatically decreased over large areas

of the eastern United States in the areas where reductions were most critically

needed; trading did not cause geographic shifting of emissions or increases in localized pollution (hot spots); and the human health and environmental benefits were

delivered broadly. Allowance trading provided sources with an incentive and the

flexibility in developing a compliance strategy. It has reduced compliance costs by

75 percent from initial EPA estimates.

A similar cap-and-trade program has been incorporated into two other programs

aimed at reducing the interstate transport of air pollution—the NOx SIP Call and

the recently issued Clean Air Interstate Rule. The 1998 NOx SIP Call is showing

results. To fulfill emission reduction responsibilities under the SIP Call, States are

requiring powerplants and large industrial emitters in the eastern United States to

reduce emissions of the ozone-precursor nitrogen oxide (NOx) during the summer

months. After adjusting for the effects of meteorology, ozone levels across the East

were on average 10 percent lower in 2004, the first full year of the program, than

in 2002.

In March 2005, EPA issued the Clean Air Interstate Rule (CAIR), which will reduce powerplant emissions of sulfur dioxide and nitrogen oxides in 28 eastern States

and the District of Columbia by 70 percent and more than 60 percent respectively

from 2003 levels when fully implemented. This will go a long way to help many

areas attain the fine particle standards and the ozone standards.

However, we have received 14 Petitions for Review and 11 Petitions for Reconsideration for the 2005 Clean Air Interstate Rule. EPA has also received two administrative stay requests; two judicial stay motions have been filed. While we are confident that we will prevail in the litigation concerning CAIR, there is always some

uncertainty regarding the outcome of any litigation.

The Administration prefers to reduce emissions from powerplants through multipollutant legislation such as the President’s Clear Skies legislation. The key difference between the Acid Rain Program and our cap and trade rulemakings is statute versus regulation. Congress enacted the Acid Rain Program in 1990. EPA has

relied on authority in the Clean Air Act to put in place the NOx SIP call and CAIR.

This authority is limited. Regulations do not provide enough certainty—that is why

EPA has been urging Congress to pass a permanent, nation-wide solution, Clear

Skies, which will result in substantial reductions in pollution, and help ensure stable and affordable energy costs for the American consumer.

In response to Senate requests in April of this year, EPA Administrator Johnson

directed EPA staff to conduct additional analyses on a number of legislative proposals concerning control of powerplant emissions currently before Congress. This

is a detailed, thorough, comprehensive legislative analysis—we believe it is the most

detailed analysis we have produced for a Congressional debate ever. The analysis
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incorporates the latest computer models and assumptions to compare the President’s

Clear Skies legislation to several alternatives introduced on Capitol Hill—an applesto-apples comparison.

President Bush and EPA are committed to working with Congress to enact Clear

Skies legislation to cut powerplant emissions to help States meet air quality standards in a way that is consistent with a health economy. Clear Skies delivers dramatic health benefits across the Nation without significantly raising energy costs.

Legislative enactment of Clear Skies will provide the certainty utilities need to build

large new clean coal plants and incentivize efficiency at existing units, significantly

reducing the potential for increased utility use of natural gas to meet demand and

new air quality requirements. This will make more natural gas available to consumers and manufacturers. Clear Skies will significantly minimize the regulatory

impact on electricity prices for households and manufacturers. I urge the Committee

members to avail themselves of this detailed analysis.

WORKING WITH STATES & TRIBES

To help States implement the NAAQS, EPA has developed analyses and analytical tools that can help States assess their air quality problems and evaluate potential control measures. EPA is working to provide implementation guidance to States

on the minimum requirements for their State implementation plans. In addition, we

have worked with States to achieve ozone reductions earlier than required through

their voluntary participation in the Early Action Compact program.

We issued Phase 1 of the Ozone Implementation Rule in April 2004, at the same

time that we designated nonattainment areas and attainment areas for the 8-hour

standard. This rule established classifications for the 8-hour ozone NAAQS; outlined

the attainment dates for the 8-hour standard, revoked the 1-hour ozone NAAQS; established how anti-backsliding principles will ensure continued progress toward attainment of the 8-hour ozone NAAQS; and described the timing of emissions reductions needed for attainment.

We have just issued the second part of the Ozone Implementation Rule. It includes, among other things, our interpretation of requirements for reasonably available control measures, reasonably available control technology, attainment demonstrations and modeling requirements, and new source review guidelines for the

8-hour ozone nonattainment areas. States will have until June 2007 to formulate

their State Implementation Plans. Together, this rule and the Phase 1 Ozone Implementation Rule issued a year and a half ago, provide a complete framework to guide

development of State Implementation Plans, including detailed guidance on many

implementation issues.

EPA has also proposed the Fine Particle Implementation Rule. This 2005 proposal

addresses the required elements of State Implementation Plans for the fine particle

air quality standard, which are due in April 2008. The rule is based on the more

general and more flexible Clean Air Act requirements for attainment planning

(known as ‘‘subpart 1’’ of section 172). For example, this part of the Act provides

flexibility on whether to require a specific multi-tiered classification system for nonattainment areas or not. In addition, it does not require specific control measures

to be implemented in certain nonattainment areas, but instead provides the States

with greater flexibility to design local control strategies to meet the attainment

needs of each individual area.

We are also assisting the States in evaluating their options. EPA has included a

general list of strategies in the implementation proposal that should be considered

by the States in developing their plans, and the Agency has provided STAPPA/

ALAPCO with grant funding to develop a PM2.5 ‘‘menu’’ of control options document.

The final document is expected by the end of this year or early next year.

The Clean Air Act presumptively requires each area to attain the PM2.5 standard

within 5 years of designation, by April 2010, with authority for EPA to grant a State

an attainment date extension of up to an additional 5 years for a specific area. In

order to be considered for an extension, a State would include such a request with

its April 2008 submittal.

We acknowledge that we are late in completing these rules to guide States in developing implementation plans for the PM2.5 and 8-hour ozone standards. I wish

that the timeline for our rules could have been different. Some States have expressed concern about achieving the new ozone and PM2.5 attainment deadlines. We

are committed to assisting States as they work to identify local or regional control

measures for their SIPs and of course, our Federal programs will provide significant

reductions for these areas. The Clean Air Act does provide opportunities for an area

under certain circumstances to obtain additional time and we are also committed

to exploring these options if needed.
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Beyond this, we are working to help States identify and implement strategies that

can help cut emissions by issuing policies and guidance on specific implementation

issues, providing technical assistance and analytical tools, and offering training and

support for NAAQS implementation. And, in those cases where information gaps remain, we are working to close them as quickly as possible.

Please see attachment for additional details.

We appreciate the work that the States are doing to bring cleaner air sooner to

the millions of Americans living in fine particle and 8-hour ozone nonattainment

areas. It will be a challenge but national rules and State plans together will bring

the health benefits of the fine particle and ozone standards to the American people.

The numerous successes of the past inform our optimism toward the future.

Thank you. Mr. Chairman that concludes my testimony. Once again, thank you

for inviting me to appear before this subcommittee. I would be pleased to answer

any questions you may have.

ATTACHMENT

EXAMPLES OF POLICIES AND AGENCY GUIDANCE TO STATES

• 1997—‘‘Mobile Source Voluntary Measures Policy’’—supports the use of voluntary mobile source measures such as programs that reduce idling emissions from

trucks, locomotives, and school buses, retrofit programs, commuter benefit programs

such as parking cash-out programs, employer-based telecommuting programs, and

small-engine buyback programs.

• 2001—‘‘Improving Air Quality with Economic Incentive Programs’’—provides information on developing and implementing economic incentive-based control strategies.

• 2004—‘‘Incorporating Emerging and Voluntary Measures in a State Implementation Plan’’—supports and encourages States to test new and innovative stationary

source control strategies.

• 2004—‘‘EPA and FAA National Guidance on Airport Emissions Reduction Credits for Early Measures’’—allows airport sponsors to use certain funds to finance airport air quality improvements such as low emission vehicles, refueling and recharging stations and gate electrification. Credits generated by the emission reductions are kept by the airport sponsor and may be used for current or future general

conformity determinations.

• 2004—‘‘Guidance on SIP Credits for Emission Reductions from Electric Sector

Energy Efficiency and Renewable Energy Measures’’—provides a readily available

procedure to quantify and validate emission reductions from specific energy efficiency and renewable energy measures and have these reductions applied to State

Implementation Plans.

• 2004—‘‘SIP Credit for Truck and Locomotive Idling Reductions’’—offers guidance on using technologies to reduce air emissions from locomotives and trucks

while idling, or replacing the need to idle.

• 2005—‘‘Guidance on Incorporating Bundled Measures in a SIP’’—provides provisional pollution reduction credits to States up-front from a group, or ‘‘bundle,’’ of pollution control measures or strategies considered in the aggregate.

• 2005—‘‘Emissions Inventory Guidance for Implementation of Ozone and Particulate Matter National Ambient Air Quality Standards (NAAQS) and Regional Haze

Regulations’’—helps States develop their emissions inventories.

• 2005—‘‘Guidance for Creating Annual On-Road Mobile Source Emission Inventories for PM2.5 Nonattainment Areas for Use in SIPs and Conformity’’—describes

how State and local agencies should prepare annual inventories for PM2.5 SIPs or

regional conformity analyses.

• 2005—‘‘Guidance for Quantifying and Using Emission Reductions from Best

Workplaces for CommutersSM Programs in State Implementation Plans and Transportation Conformity Determinations’’—describes how State and local agencies can

gain emission credit for commuter benefit programs like Best Workplaces for CommutersSM.

TECHNICAL AND ANALYTICAL TOOLS

EPA is working closely with States to provide them with technical support for

their modeling analyses, emissions inventory development, evaluation of costs for

various control strategies, updated regional modeling, and air quality analyses.

These technical and analytical tools will help States characterize their air quality

problems and use the state-of-the-art methods to craft solutions.

• Reviewing a menu of control options for fine particles
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• Developing a fast, flexible, and transparent tool for estimating health and environmental benefits of air quality improvements via the peer-reviewed BenMAP

model • Providing grants for State organizations to develop and distribute information

about control strategies • Improving and automating emissions inventory quality assurance tool to reduce

staff effort at the State level, while improving the quality and reliability of the resulting emissions data • Collaborating with the Department of Energy to improve the Community MultiScale Air Quality Model (CMAQ) that will help States develop their State Implementation Plans. States and Regional Planning Organizations can use the peer-reviewed ‘‘community’ CMAQ model to evaluate regional and local emission reduction

strategies for meeting ozone, PM2.5 and regional haze goals • Issuing guidance on the use of models and other analyses in attainment demonstrations for the 8-hour ozone NAAQS. This document provides important guidance to EPA Regional, State, and Tribal air quality management authorities and the

general public on how to prepare 8-hour ozone attainment demonstrations using air

quality models and other relevant technical analyses. • Conducting regional air quality modeling analyses to help inform State and

local agencies about contributions from upwind air pollution sources and the likely

consequences of programs to reduce emissions from those sources. • Collaborating with equipment manufacturers to develop, test, and improve

measurement instruments, including continuous monitors, to assist States in obtaining better measurements and greater insight into the sources of air pollution. • Developing the MOVES model for highway vehicles, a next generation model

that can be used to estimate emission inventories and make county level projections

through 2050.

TRAINING AND SUPPORT FOR PILOT PROJECTS

• Partnering with stakeholders to promote woodstove changeouts and other innovative programs with big local benefits in some areas • Sponsoring meetings, workshops and conferences for State and local officials to

share best practices. • Collaborating with local and State officials to evaluate the effectiveness of control strategies in real-world settings • Working in the Clean Energy-Environment State Partnership—voluntary partnership between States and EPA to assess clean energy potential and determine

strategies for implementing policies that reduce emissions, save energy, strengthen

State economies, and protect public health. Partners commit to working across key

State agencies to ultimately develop a clean energy-environment action plan; EPA

provides tools, resources, and access to experts to ensure States have the best information available as they decide steps and policies.

• Establishing and funding the Community Modeling and Analysis Center to support community-based air quality modeling. This Center provides model codes and

documentation, on-line help desk, training courses, and workshops/conferences that

help States in conducting air quality modeling for their ozone, PM, and regional

haze State Implementation Plans.

RESPONSES OF WILLIAM WEHRUM TO ADDITIONAL QUESTIONS FROM

SENATOR LIEBERMAN

Question 1. States are less than 1 year away from the time at which they must

propose their State Implementation Plans for public review if they are to meet deadlines under the Clean Air Act. Why has it taken so long for the Agency to release

final rules for the implementation of National Ambient Air Quality Standards for

ozone and particulate matter? In expending the significant resources needed to develop the Clear Skies Proposal, the CAIR rule and other rules, did the Agency expend resources that could have been used to complete the NAAQS implementation

rules earlier? Why did EPA not make getting out NAAQS Implementations rules its

top priority in this area?

Response. EPA promulgated the 8-hour ozone and PM NAAQS on July 18, 1997.

Due to litigation, the designations and implementation phases of the NAAQS process were delayed. In the case of ozone, EPA finalized designations for 8-hour nonattainment areas on April 30, 2004. Simultaneously, EPA issued the final Phase 1

implementation rule for 8-hour ozone. These two rules describe many of the key elements of the implementation framework for the 8-hour ozone standard. Specifically,

the Phase 1 and Designations Rules established:
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• which areas are in nonattainment;

• which areas are regulated under the Clean Air Act’s basic subpart 1 requirements, and which are subject to the more detailed subpart 2 requirements and classification system;

• the maximum attainment date for each nonattainment area; and

• the required timing of emissions reductions necessary for attainment.

The Phase 1 rule also called for revocation of the 1-hour ozone standard for most

areas in June 2005 and established anti-backsliding requirements to ensure continued progress toward attainment of the more stringent 8-hour ozone NAAQS as

areas transition from implementing the 1-hour NAAQS to implementing the 8-hour

NAAQS. EPA issued a separate rule addressing requirements for conformity of

transportation plans and 8-hour ozone plans on July 1, 2004.

OMB received the Phase 2 ozone implementation rule for E.O. 12866 review on

March 7, 2005. At that time, review of other Agency priorities, some of which had

court-ordered deadlines—e.g., the Clean Air Interstate Rule (CAIR), Clean Air Mercury Rule (CAMR), and Best Available Retrofit Technology (BART) rules—took precedence over review of the Phase 2 rule. Also, EPA and OMB desired that the Phase

2 ozone implementation rule reflect careful consideration of the relationship between 8-hour ozone implementation efforts and these other rules.

On November 9, 2005, EPA issued the final Phase 2 rule. This rule includes,

among other things, our interpretation of requirements for reasonably available control measures, reasonably available control technology, attainment demonstrations

and modeling requirements, and new source review guidelines for the 8-hour ozone

nonattainment areas.

States have already been moving ahead with their implementation plans. States,

both individually and via cooperative regional organizations, are assembling emissions inventories, conducting air quality modeling, assessing the emissions reductions needed for attainment, and evaluating potential control measures. States will

have until June 2007—more than 18 months after finalization of the entire regulatory framework for ozone implementation—to formulate their State Implementation Plans (SIPs). Together, the Phase 1 and Phase 2 ozone implementation rules

provide a complete framework to guide SIP development, including detailed guidance on many implementation issues.

In the case of particulate matter (PM), EPA has also been working hard to provide States with appropriate tools and guidance to implement the 1997 air quality

standards. Designations for the fine particle standards were completed in December

2004 (slight modifications were completed in April 2005). CAIR is one of the major

tools that will help States in the East reach attainment with the 1997 standards—

where the bulk of PM2.5 nonattainment areas are located. EPA believes that it was

essential to finalize CAIR before turning our attention to additional control requirements at the local level via the implementation rule.

OMB received the proposed PM2.5 implementation rule for E.O. 12866 review in

October 2004. At that time, review of other Agency priorities, some of which had

court-ordered deadlines—e.g., the Clean Air Interstate Rule (CAIR), Clean Air Mercury Rule (CAMR), and Best Available Retrofit Technology (BART) rules—took precedence over review of the PM2.5 implementation rule. Also, EPA and OMB wanted

the PM2.5 implementation rule to reflect careful consideration of the relationship between PM2.5 implementation efforts and these other rules. The PM2.5 implementation rule was signed by the Administrator on September 8, 2005 and published in

the Federal Register on November 1, 2005. This proposed rule covers a wide variety

of topics, such as:

• attainment demonstrations and modeling;

• reasonably available control measures (RACM);

• reasonably available control technology (RACT);

• policy on PM2.5 and precursors such as SO2, NOx, VOC, ammonia, and direct

emissions (including organic carbon, elemental carbon and crustal material); and

• new source review (NSR) requirements

EPA will continue to work to issue the final rule as soon as we complete the public review and comment process. This rule will help States as they develop their

nonattainment area SIPs, which must be completed by April 2008. If the final PM

implementation rule is issued in summer 2006, as expected, States will have substantial time to rely on it as they develop their SIPs.

Question 2. The Agency issued its ozone modeling guidance only after most States

had begun work on their SIPs. Why was this rule so slow in coming out and how

long did it remain at OMB? Is the time now remaining adequate for all States to

complete their work in accordance with this guidance?
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Response. The original draft of the document ‘‘Guidance on the Use of Models and

Other Analyses in Attainment Demonstrations for the 8-Hour Ozone National Ambient Air Quality Standards’’ was released in 1999 with a subsequent draft in February 2005. This technical guidance document is not a rule and was not reviewed

by OMB. The draft guidance documents were developed after a comprehensive internal and external review by EPA, States, and stakeholders. After the release of the

February 2005 draft, we again asked for and received comments from the EPA Regions, States and stakeholders. Based on these comments, a final version of the

ozone modeling guidance document was released in October 2005. The final version

of the modeling guidance contains some changes, but most of the changes affect the

final steps in the SIP modeling process and therefore we believe that States should

be able to complete their modeling and submit their SIPs in accordance with the

schedule contained in the final 8-hour ozone implementation rule. In addition, the

preamble to EPA’s 8-hour ozone implementation rule states that we will generally

review the demonstrations for technical merit using EPA’s most recent modeling

guidance at the time the modeling relied on in the attainment demonstration is performed. However, in almost all cases, we expect States will be able to complete their

work based on the recommendations contained in the October 2005 final guidance

document.

Question 3. EPA has determined that for purposes of RACT compliance under

CAIR for Electric Generating Units qualifies, and thus that states upwind of Connecticut may meet their RACT obligations by participating in the CAIR cap and

trade program for electric generating units. In fact, as much as 95 percent of the

ozone in Connecticut’s nonattainment areas is the result of transported air pollution. In addition, even after application of CAIR, in 2015 and 2020, Connecticut will

remain in nonattainment for ozone. In what way does the CAIR rule and the Agency’s approach to RACT for EGUs assist Connecticut in achieving the ozone NAAQS?

Response. We agree that much of Connecticut’s ozone problem is due to interstate

transport of pollution. EPA recently completed extensive analyses to evaluate the

interstate contributions to downwind ozone nonattainment areas as part of the

CAIR. We determined, for example, that in the absence of CAIR, six States (MA,

NJ, NY, OH, PA, and VA) might contribute up to 93 percent of exceedance-level

ozone in 2010 in Middlesex Co, CT. Thus, we determined that each of the six States

makes a significant contribution to nonattainment in this county.

The Clean Air Act provides a statutory framework for nonattainment issues to be

addressed. EPA has ensured regional action to reduce interstate ozone transport

through CAIR. CAIR provides substantial air quality benefits for downwind areas

significantly affected by transport of pollution from other States. EPA has set the

CAIR NOx cap at a level that, assuming the reductions are achieved from electric

generating units (EGUs), would result in EGUs installing emission controls on the

maximum total capacity on which it is reasonable to install emission controls.

As discussed in EPA’s 8-hour ozone implementation rule, we believe total NOx

emission reductions from EGUs covered by CAIR would be the same with or without

RACT. Under a cap-and-trade program such as CAIR, there are a given number of

allowances that equal a given emissions level. In that rule we stated our belief that:

(1) EGUs subject to the CAIR NOx controls meet the definition of RACT for NOx

(in States that require all CAIR NOx reductions from EGUs); (2) requiring sourcespecific RACT controls on EGUs will not reduce total NOx emissions from sources

covered by CAIR below the levels that would be achieved under CAIR alone; and

(3) source-specific RACT could result in more costly emissions reductions on a per

ton basis. Therefore, RACT and the CAIR/RACT provisions of EPA’s 8-hour ozone

implementation rule do not affect interstate transport in any significant way, and

would not be expected to affect Connecticut’s air quality situation in any significant

way.

Question 4. Is there anything in the CAIR rule or in the Agency’s current plans

for implementing CAIR that would prevent States from including requirements for

additional reductions at EGUs in their SIPs?

Response. No, States are free to require controls on any sources within their

boundaries. However, EPA is strongly encouraging States to consider all emission

reduction opportunities before prematurely reaching the conclusion that EGUs are

the best source category for additional controls to address their nonattainment

issues.

Question 5. As part of the followup to the November 10, 2005 subcommittee hearing regarding the Implementation of the Existing Particulate Matter and Ozone Air

Quality Standards, you were asked about EPA’s determination that for purposes of

Reasonably Available Control Technology (RACT), compliance with the Clean Air
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Interstate Rule (CAIR) qualifies as RACT. In your response, you indicated that ‘‘requiring source-specific RACT controls on EGUs will not reduce total NOx emissions

from sources covered by CAIR below the levels that would be achieved under CAIR

alone.’’ However that response does not appear to answer the question. The question

is whether or not a RACT requirement that functions in addition to CAIR would

achieve additional reductions beyond CAIR and thus would help alleviate Connecticut’s situation with regard to large amounts of interstate transport. Wouldn’t a

RACT that is not simply equivalent to a national cap and trade program provide

additional reductions beyond that program? According to you, ‘‘RACT and the CAIR/

RACT provisions of EPA’s 8-hour ozone implementation rule do not affect interstate

transport in any significant way, and would not be expected to affect Connecticut’s

air quality situation in any significant way.’’ Doesn’t that in fact support the point

that the agency’s chosen position effectively eliminates RACT as a basis for controls

beyond CAIR? If it is your contention that RACT applied at all applicable sources

in the CAIR region results in fewer reductions that CAIR please provide an analysis

and documentation to support that conclusion.

Response. EPA has set the 2009 CAIR NOx cap at a level that, assuming the reductions are achieved from electric generating units (EGUs), would result in EGUs

installing emission controls on the maximum total capacity on which it is feasible

to install emission controls by 2009. The rationale for this approach is addressed

in the November 29, 2005 final phase 2 8-hour ozone NAAQS implementation rule

and is discussed more fully in the CAIR final rulemaking. RACT does not require

installation of additional controls if it is infeasible to do so. Source-specific RACT

requirements could drive up the cost of reductions on a per-ton basis compared to

CAIR. Also, with the CAIR trading system in place, if a State did decide to place

a specific emission limit on an EGU to meet a RACT limit, that EGU could sell any

excess emissions allowances to another EGU source in the CAIR region, such that

the same total emission reductions would be achieved in the CAIR region as without

RACT. This is the expected result because RACT does not apply to all EGUs covered

by CAIR. In fact, RACT potentially applies only to a subset of CAIR-affected EGUs.

Thus, we do not believe that RACT in addition to CAIR would achieve additional

emissions reductions in the CAIR region beyond those expected from CAIR alone.

These findings are described in the preamble to the November 29 rule. We do not

expect that a more quantitative analysis of specific RACT reductions would change

these findings, and any such analysis would be speculative, since States generally

determine RACT for NOx major sources on a case-by-case or source category basis.

RESPONSES BY WILLIAM WEHRUM TO ADDITIONAL QUESTIONS FROM

SENATOR LAUTENBERG

Question 1. On October 13, 2005, EPA proposed further changes to the New

Source Review program as it relates to utilities. That same day, Deputy Administrator Peacock released a memorandum related to NSR Enforcement (Peacock

Memorandum). In that memorandum he stated that ‘‘in deciding which cases to pursue, it is appropriate to focus on those that would violate our NSR reform rules and

our latest NSR utility proposal which the agency is releasing today.’’ As a result of

that policy we understand that EPA will not be pursuing future cases that would

not trigger NSR under either EPA’s Equipment Replacement Rule (68 Fed. Reg.

61248 (October 27, 2003)) or the NSR rule proposed on October 13, 2005.

As I am sure you are aware, the Equipment Replacement Rule was stayed by the

United States Court of Appeals for the D.C. Circuit on December 24, 2003. However,

the Peacock memorandum proposes to use that rule as a basis for not bringing enforcement actions, thereby giving that rule prospective and retrospective effect and

effectively legalizing actions at sources that meet the requirements of the stayed

rule but that do not meet the requirements of Federal and SIP-approved NSR–PSD

rules. If, as the court found likely, that rule proves to be illegal, and source have

made changes subject to NSR in reliance on the Peacock Memorandum, will EPA

bring enforcement actions against such sources? If not, isn’t EPA effectively legalizing questionable activity that the Court of Appeals has already signaled may not

comport with the dictates of the law? What will EPA’s answer be to judges that seek

to minimize or eliminate penalties against such sources on the basis that EPA sanctioned such activity through the Peacock memorandum?

Has EPA analyzed the amount of emissions increases that will or could be allowed

through such a policy? Considering that one pre-requisite for the court stay was the

finding that EPA’s Equipment Replacement Rule would cause ‘‘irreparable harm’’ to

the public in the absence of a stay, why is EPA allowing unlawful activities that

caused and will cause irreparable harm to the public to escape enforcement under
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the Peacock Memorandum? Does EPA intend for the enforcement policies announced

in the Peacock Memorandum to preempt or otherwise affect the ability of States and

citizens to enforce against activities that would violate existing NSR requirements

but not the Equipment Replacement Rule or the October 13, 2005 rulemaking proposal?

Response. The regulated community must comply with all applicable regulations,

including existing NSR requirements. As your question points out, the Agency’s

Equipment Replacement Rule (ERP) has been stayed by the U.S. Court of Appeals

for the District of Columbia Circuit, and therefore the regulated community currently has no legal right to rely on ERP to avoid potential NSR liability. The ‘‘Peacock Memorandum’’ was not intended to circumvent the D.C. Circuit stay or

‘‘legaliz[e] questionable activity.’’ Indeed, the Agency reserves its discretion to bring

enforcement actions against companies that violate the law, including those that

prematurely rely on ERP. EPA’s enforcement resources are limited, and thus the

Agency must expend its resources wisely. The Peacock Memorandum does not create

any rights for the regulated community and is intended to help focus EPA’s enforcement discretion on those cases that would have the biggest benefit for human health

and the environment.

Question 2. On August 25, 2005, Adam Kushner, Director of the Air Enforcement

Division sent a memo to William Harnett, Director of IPTID/OAQPS regarding the

proposed New Source Review Clean Air Interstate Rule. In that memo, Mr. Kushner

states that ‘‘the proposed rule will adversely affect our enforcement cases and is

largely unenforceable as written.’’ Did you review this memorandum prior to release

of the proposal? Was this memorandum shared with the Department of Justice prior

to Administrator Johnson signing the rulemaking proposal? Did the Department of

Justice respond? Please provide any documents in EPA’s possession that relate to

the response of the Department of Justice.

Response. I did not review the Kushner memo prior to release of the NSR–EGU

proposal. The memo was reviewed by my staff. The proposal reflects the agency’s

determination regarding this matter. I have been told by OECA managers that it

was not shared with DOJ prior to Administrator Johnson’s signature.

Question 3. Recent events suggest that Mr. Kushner’s memo appears to have been

accurate. Defendants in two existing NSR enforcement cases have already cited the

proposal as grounds for a stay or summary judgment. In U.S. v. AEP, (Consolidated

Civil Actions No. C2–99–1182 and C2–99–1250 (S.D. Oh.)), American Electric Power

filed a motion for stay in which it stated that ‘‘USEPA’s actions eliminate the need

for further liability and future remedy proceedings’’ and that EPA’s ‘‘admissions severely undercut Plantiff’s liability claims.’’ In U.S. v. Cinergy, (Civil Action No IP99–

1693C–M/S), Cinergy filed for summary judgment stating that ‘‘ The United States

Environmental Protection Agency has now admitted—including as recently as three

weeks ago—that it did not provide ‘‘fair notice’’ of the Clean Air Act New Source

Review legal standards that Plaintiff attempt to apply in this case.’’

In light of these filings, how can you or EPA reasonably contend that these rules

will have no impact on existing enforcement cases? What guarantee can you or EPA

provide that the positions taken by the Defendants above will not be accepted by

the courts? Did you or EPA consider the possibility that the statements cited by the

defendants in the cases above might impact existing enforcement cases? Or did EPA

consider that possibility and reject it? If so, why? In light of the filings in these

cases has EPA or the Department of Justice undertaken a review of the impact on

existing enforcement cases? Considering that some of these same defendants had

filed similar motions in pending enforcement cases following adoption of EPA’s ERP

rule, why would EPA have jeopardized these same pending enforcement cases by

issuing a rulemaking proposal that has now prompted the above motions filed in

the AEP and Cinergy cases?

Response. The NSR rules plainly and expressly state that they are to be applied

to changes that post-date the rules’ respective effective dates and thus do not have

any impact on the existing enforcement cases. EPA intends to continue to vigorously

pursue the existing enforcement cases and other matters in negotiations. EPA did

consider the impact that the rules would have on the existing enforcement cases.

It is for that reason the rules plainly and expressly state that the rules are to be

intended to only those changes that post-date the rules effective date. With respect

to whether or not EPA or DOJ has evaluated, or is evaluating, the impact of the

rules on the enforcement cases, it is EPA’s long-standing policy to not comment on

the specific enforcement sensitive aspects of individual cases.

Question 4. One of the approaches taken in the proposed rule is not new. EPA

took public comment on basically this approach in 1996. In doing so, EPA noted that
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‘‘one of the most troubling side effects’’ of the approach was that it ‘‘could ultimately

stymie major new source growth by allowed unreviewed increases of emissions from

modifications of existing sources.’’ 61 Fed. Reg. 38250, 38270/2 (July 23, 1996).

Moreover, in December 2002, EPA once again rejected this approach saying that it

‘‘could lead to unreviewed increases in emissions that could be detrimental to air

quality.’’ 67 Fed. Reg. at 80205 (Dec. 31, 2002). What, if anything has changed the

agency’s view with regard to the potential emissions increases that would result

from the approach proposed in the rule? Would any perceived differences prevent

the immediate local, regional or national unreviewed increases in emissions that led

EPA to reject this approach in 2002? Although the proposal cites a number of benefits from the rule, none of these relate to decreased emissions or increased environmental protection. Instead the benefits cited relate to industry flexibility. Do the

previous statements regarding this approach remain accurate? If not, why not?

Response. The previous statements referred to in the question do not apply to the

recently proposed rule. The referenced statements (61 FR 38250, 38270/2; 67 FR

80205) were about an approach considered during the 1980’s, commonly known as

CMA Exhibit B. CMA Exhibit B is an emissions test that compares pre-change

emissions based on design capacity (potential emissions) to post-change emissions

based on design capacity (potential emissions).

Our proposed rule includes three options for determining an emissions increase

at electric generating units (EGUs), none of which operate in the same fashion as

the CMA Exhibit B test. For example, one option is an emissions increase test that

is based on the current NSPS regulations, which compares the maximum hourly

emissions achievable at an emissions unit during the past 5 years to the maximum

hourly emissions achievable at that unit after the change. This option determines

actual emissions based on current operating capacity, which is not the same as the

approach in CMA Exhibit B. Furthermore, CMA Exhibit B proposed to use potential

emissions to determine the amount of emissions that must be offset. We proposed

to retain actual emissions for computing the amount or availability of emissions offsets. For these reasons, the maximum achievable hourly emissions option of our proposed rule for EGUs is not the same approach as CMA Exhibit B.

We do not expect the proposed rule would lead to emission increases from the

power sector. To the contrary, emissions from the power sector are projected to decrease dramatically over the next two decades. This is attributable to several CAA

programs, including the Clean Air Interstate Rule, the Acid Rain Program, and the

Clean Air Visibility rule. We describe the EGU emission reductions from these regulations in detail at 70 FR 61084. We intend to present supporting analyses in our

supplemental proposal, which should be published in the near future.

Question 5. In the Kushner memorandum, an attachment contains case studies

that examine the potential effect of the EPA NSR proposal. Case study one appears

to indicate that under the proposed approach, SO2 emissions would increase by

13,096 tons per year. Case studies 2 through 4 also show increases in emission of

SO2 and NOx. What is the agency’s position with regard to these case studies? Does

the agency believe that its proposed changes will not allow such increases in emissions? On what basis does the agency reach such a conclusion?

Response. As previously noted, we intend to provide in the near future a thorough

environmental analysis of the NSR proposal in a supplemental proposal.

Question 6. The EPA Office of Enforcement recently briefed EPA on its enforcement activities during the last year and noted that enforcement cases brought to

conclusion during FY 2005 resulted in 1.1 billion lbs. of pollutant reduction from all

media. Of these reductions, nearly half the reductions, in the vicinity of half a billion pounds, were from 2 NSR enforcement cases—the Illinois Power/Dynegy Case

and the Ohio Edison case. And these benefits only take into account a single year

of reductions, with the actual reductions going on for many years into the future.

These two cases represent the vast majority of benefits from the top ten air cases,

which had estimated benefits for a single year valued at $4.6 billion. If the Illinois

Power/Dynegy and Ohio Edison cases had not yet been brought and instead were

ready to be referred to the Department of Justice now, would they be eligible for

filing under the Peacock memo? If so, how and why?

Response. EPA will continue to pursue existing filed utility cases and those matters in ongoing negotiations. Both Illinois Power and Ohio Edison are filed cases

and were prosecuted to successful settlements. It is EPA’s long-standing policy to

not comment on specific enforcement sensitive aspects of individual cases.

Question 7. According to an article in Greenwire dated July 14, 2004, 14 NSR

cases were referred to the Department of Justice (DOJ), but were not filed as of that

date. In addition, 8 cases were being developed for possible referral to DOJ. Of these
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cases, how many would not be eligible for filing or referral under the Peacock memorandum? Have any of these cases been filed or referred since the July 14, 2004

story? How many? Have any of these cases been filed or referred since the Peacock

Memorandum was issued? Will the agency be moving forward to file or refer any

of these cases? When? Are there additional NSR cases for which EPA has filed section 114 requests or issued notices of violation? How many? Have any of these cases

been referred or filed since July 14, 2004? How many? What are the plans for moving these cases forward?

Response. Since July 2004, with respect to Clean Air Act New Source Review utility violations, EPA has issued 4 information requests under Section 114 of the Clean

Air Act, served 3 notices of violation, filed 0 complaints, and settled 2 cases. As to

your remaining questions, EPA considers the status of individual referred cases or

cases under investigation for possible referral to be enforcement sensitive information and thus it is EPA’s long-standing policy to not comment on specific enforcement sensitive aspects of individual cases.

Question 8. Please indicate the number of cases that have been referred to EPA

for prosecution of NSR violations since 1999, but have not yet been filed. Please

identify these cases by company or facility name. Please provide EPA’s position as

to whether each of those cases should go forward. Do EPA’s enforcement policies

now exclude prosecution of these cases? If so, then do they qualify for an enforcement privilege? Please indicate, using aggregate figures what reductions in SO2, NOx, mercury, ozone and fine particulate matter would occur if the facilities subject

to these referrals installed SCRs (or operated existing SCRs year round) and FGDs

within the next 3 or 4 years?

Response. EPA considers the status of individual referred cases or cases under investigation for possible referral to be enforcement sensitive information and thus it

is EPA’s long-standing policy to not comment on specific enforcement sensitive aspects of individual cases.

Question 9. We understand that 75 investigations were ‘‘suspended’’ by Assistant

Administrator Suarez in November 2003. Are these investigations still suspended?

Please indicate, using aggregate figures what reductions in SO2, NOx, mercury,

ozone and fine particulate matter would occur if the facilities subject to these referrals installed SCRs (or operated existing SCRs year round) and FGDs within the

next 3 or 4 years?

Response. EPA considers the status of individual cases or cases under investigation for possible referral to be enforcement sensitive information. Thus it is EPA’s

long-standing policy to not comment on specific enforcement sensitive aspects of individual cases.

Question 10. With respect to the proposed new source review rule that was signed

on October 13, 2005, please produce all documents (including electronic documents

and e-mails) in the Agency’s possession related to the proposed rule, that were prepared or dated prior to October 13, 2005, including but not limited to:

(a) drafts of the preamble or inserts for the preamble;

(b) comments on draft rules or preambles;

(c) documents discussing the legislative history or legal authority related to this

proposal; and

(d) correspondence or other documents related to the proposed rule that were

shown to, given to, or received from people other than Federal employees or contractors.

Response. In response to your request for information on the NSR rule, we have

included all non-privileged documents available at this time.

[The referenced documents have been retained in committee’s file.]

RESPONSES OF WILLIAM WEHRUM TO ADDITIONAL QUESTIONS FROM

SENATOR JEFFORDS

Question 1. In its proposed PM Implementation Rule, EPA has indicated that for

States meeting their SO2 cap under the Clean Air Interstate Rule (CAIR) through

reductions at electric generating units (EGUs), then EGUs in that State may comply

with the Reasonably Available Control Technology (RACT) obligations of the Clean

Air Act by complying with CAIR. Given that CAIR is a cap and trade program, it

will clearly not require reductions at all major sources in nonattainment areas and

will allow many such sources instead to remain entirely uncontrolled.

Please provide, by State, a list of all major source EGUs in the CAIR region that

EPA estimates will not have both a scrubber and a SCR in 2010, 2015 and 2020

under CAIR. Please identify which of these sources are in nonattainment areas. Has
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EPA analyzed the difference between applying the CAIR based RACT approach described above and a source specific RACT approach in terms of local air quality in

each nonattainment area? Will EPA conduct such an analysis and put it in the

record so that each community will be able to see whether their nonattainment status will be better or worse off under the CAIR equals RACT approach?

Response. In the PM2.5 implementation rule proposal notice, EPA proposed to find

that CAIR satisfies RACT in States that achieve their CAIR reductions solely from

EGUs, with the condition that existing selective catalytic reduction (SCR) systems

in PM2.5 nonattainment areas be run year-round. (Federal Register, Vol. 70, No.

210, November 1, 2005, p. 66024–25.) The notice stated that the CAIR 2009 and

2010 caps would require EGUs to install emission controls on the maximum total

capacity on which it is feasible to install controls by those dates, and that imposition

of source-specific RACT on EGUs covered by CAIR would not reduce total emissions,

but would only impose a higher cost to achieve the same total emission reductions.

The notice also observed that a State has authority to conduct its own RACT analysis for any source or to require beyond-RACT controls for attainment.

This question appears to presuppose that RACT for EGUs should be SCR for NOx

control and scrubbers for SO2 control. EPA has not issued guidance indicating that

a particular level of SO2 or NOx control is RACT for EGUs or other sources in PM2.5

nonattainment areas. There currently is no established RACT benchmark for EGU

control in PM2.5 areas to serve as a comparison point with CAIR.

This question also appears to assume that if a coal-fired unit does not have SCR

for NOx removal or scrubbers for SO2 removal, then it would be entirely uncontrolled. Significant reductions in NOx can be achieved through combustion control

technology (such as low NOx burners) and significant reductions in SO2 can be

achieved through switching to lower sulfur coal.

The spreadsheet that you have requested is attached and we have also included

information regarding NOx emissions and emission rates, SO2 emissions and emission rates, the size of the unit, and the capacity factor (e.g. how much the unit is

projected to operate) of each unit. This information shows that, in general, scrubbers

and SCRs are projected to be installed on larger units with higher capacity factors

(which would emit significantly more if scrubbers and SCR were not installed),

while smaller, less frequently operated units tend to use low NOx burners and low

sulfur coal as their compliance choice.

As noted above, EPA designed CAIR to maximize emission reductions that could

occur by 2010 given limits to important resources needed to install emission controls

such as available boiler-maker labor. Any RACT determination would have to consider whether these resources were available when determining what controls would

be appropriate to apply.

EPA has not performed an air quality analysis comparing hypothetical source-specific RACT controls to those projected under CAIR. We have not determined analyses to be performed for the final PM implementation rule.

[The referenced spreadsheet follows.]
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Question 2. EPA’s CAIR allows a utility to participate in the federally-run SO2

regional trading program if the State in which the utility is located complies with

CAIR by adopting a State implementation plan that requires utilities to turn in acid

rain allowances at the rate of 2 allowances for every ton of SO2 emitted from 2010

through 2014, and 2.86 allowances for every ton emitted in 2015 and later. EPA’s

recent analysis of the Clean Air Planning Act indicates that SO2 reductions from

utilities beyond those achieved by CAIR would be useful in bringing additional areas

into attainment with the PM2.5 NAAQS and could be achieved without raising the

cost of electricity compared to what is expected under CAIR. I understand that a

number of States are considering requiring SO2 reductions from utilities greater

than those that would be required under CAIR.

If a State submits a State implementation plan that requires utilities in that

State to turn in acid rain allowances at a higher rate (e.g., 3 allowances for every

ton of SO2 emitted in 2015 and later), will EPA allow that State’s utilities to participate in the federally-run SO2 regional trading program?

If not, why not? Is there some other way that a State could require greater reductions than required by CAIR and still have its utilities participate in the federallyrun trading program?

I understand that when States have asked this question in the past, EPA has refused to provide a definitive answer, and instead has suggested to States that they

should seek reductions from outside the power sector. Although EPA may have a

preference as to how States get the emission reductions necessary to demonstrate

attainment, what authority does EPA have for imposing this preference on States?

Why is EPA refusing to give States an answer to this important question when

this information could be useful for States as they develop their implementation

plans?

Response. States are allowed to require more stringent reductions than CAIR

from the power sector. That is a statutory prerogative that CAIR has not altered.

We think that CAIR will improve air quality significantly in the affected region and

that States should review the CAIR regulatory record thoroughly and other Federal/

State rules that are now taking effect and then determine what further controls

might be necessary. Several regions of the country are undertaking additional detailed local air quality modeling of CAIR along with other Federal/State actions to

address their nonattainment problems. This modeling will include emissions reductions from CAIR as well as from other Federal and State emissions reductions measures. For areas that are still projected to be in nonattainment, this modeling will

provide information about what additional sources may need to be controlled. We

think it is premature to evaluate what further control options States may choose

to consider. States will have a better idea of what they need to do to have effective

attainment compliance strategies after air quality modeling and related analyses

are completed. Given the nature of regional cap and trade programs like CAIR, a

State cannot simply lower its emissions allowance budget and achieve specific reductions from specific facilities. The emission reductions occur whenever and wherever

it is most cost-effective to make them.

Looking at the Northeast, EPA’s analysis indicates that only one area, in western

Pennsylvania, will likely be in nonattainment for the PM2.5 NAAQS after 2009, and

we believe it is likely that local controls will most effectively rectify this situation.

Question 3. As you know, the Federal Records Act governs the maintenance and

disposition of agency records. According to the EPA website, Federal records include

‘‘working files, drafts, E-mail messages, data and spreadsheets, computer output,

data from test equipment, results of computer modeling, videos, maps, architectural

drawings and microfilm.’’ The EPA website asks and answers the following question

‘‘What do Freedom of Information Act requests, lawsuits, Congressional inquiries

and Federal judicial opinions have in common—The need for impeccable records.’’

Are you aware of the requirements of the Federal Records Act? Please describe the

requirements of the Act as applied to your documents, including the disposition

schedules for your documents. Have you ever disposed of any records in contravention of the requirements of the Act? Have all your records either been retained or

disposed of in accordance with an approved disposition schedule?

Response. I am aware of the requirements of the Federal Records Act. I believe

that I have complied with these requirements during my tenure at EPA.

Question 4. EPA stated in its May 12th Federal Register notice finalizing the

Clean Air Interstate Rule (or CAIR) that the reductions in ground-level ozone

achieved by CAIR could save 500 more people from premature death every year. Yet

EPA did not include these benefits in its main analysis for the CAIR Rule. Since

then, three new studies were published in the July edition of the journal of Epidemiology which clearly provide strong scientific evidence that the link between ozone
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1 EPA–SAB–COUNCIL–ADV–99–005, 1999; and SAB–HES, 2004.

and premature mortality is real and significant and additive to the effects of fine

particles. At the hearing on November 10th you mentioned that mortality is among

the health effects from ozone. However, you did not list that among the health effects mentioned in your written testimony. Does the agency agree that exposure to

ozone has been associated with premature mortality? Will the agency include benefits associated with reduction in premature mortality from ozone in rules that relate

to ozone from now on?

Response. As I stated at the hearing, ‘‘studies also show an association between

ozone exposure and mortality.’’ EPA is reviewing the body of literature available on

the association between ozone exposure and premature mortality. EPA’s second external review draft of the Criteria Document for ozone has concluded that there is

evidence that exposure to ozone has been associated with premature mortality. We

are exploring ways of appropriately characterizing the premature mortality benefits

of reducing ozone and have included preliminary estimates in recent analyses of the

Clear Skies legislation as well as in other economic assessments.

Question 5. During the confirmation process for Deputy Administrator Peacock, he

was asked the following question:

‘‘According to an Inside EPA article of September 17, 2004, EPA and OMB have

been collaborating on an approach which polls a small number of outside experts

and asks them to interpret the literature on fine particle health effects and provide

an estimated dose-response function. This sounds to me like an odd kind of nonscientific process where a small number of selected people are being asked to do the

work traditionally done by EPA scientists. Inside EPA reports that the result of this

OMB–EPA collaboration is a lowering of the estimated benefits of pollution control.

The professional experts and scientists on the EPA staff were strongly critical of

this project, which I also imagine is a very time-consuming and expensive effort.

Aren’t there enough health effects experts already on the government payroll in

EPA who have already interpreted the particulate matter health effects literature,

and haven’t these EPA experts’ interpretations already been subject to outside peer

review by the Science Advisory Board and the National Academy of Sciences?’’

Mr. Peacock replied that:

‘‘I am not familiar with the expert elicitation approach mentioned, nor any of the

details associated with the estimating the benefits of pollution control. If confirmed,

I plan to take a close look at this issue and will make any changes necessary.’’

Has Deputy Administrator Peacock undertaken this process and when is a result

expected? If not, would you please respond to the question on behalf of Deputy Administrator Peacock or answer the question on the basis of your own knowledge and

information?

Response. The use of formal methods to elicit probabilistic judgments from experts

is an important tool in the field of decision analysis. Over the past two decades,

there has been an increasing number of studies, funded both by the Federal Government and the private sector, that have used expert judgment techniques to characterize uncertainty in environmental risk analysis and decisionmaking. In the 1980’s,

EPA’s Office of Air Quality Planning and Standards (OAQPS) successfully used expert judgment to characterize uncertainty in the health effects of exposure to lead

(Whitfield and Wallsten, 1989) and to ozone (Winkler et al., 1995).

Expert elicitation is a formal, highly structured, and well-documented process

whereby expert judgments are obtained through a structured interview. Responses

to the elicitation are usually in the form of a probability distribution of outcomes

to a quantitative question (i.e., the relationship of PM2.5 exposures to mortality are

elicited and presented as a mean, median, and estimates of the 5th, 50th, and 95th

percentiles of an uncertainty distribution). Formal expert elicitations are usually

conducted using independent consultants with expertise in statistics, decision analysis, and probability encoding to structure unbiased questions about uncertain relationships or parameters and who design and implement the process used to obtain

probability and other judgments from subject matter experts.

In 2002, the National Academy of Sciences (NAS) released a report on its review

of the Agency’s methodology for analyzing the health benefits of measures taken to

reduce air pollution. In its report, the NRC said that EPA has generally used a reasonable framework for analyzing the health benefits of PM-control measures and

recommended that the Agency take a number of steps to improve the characterization of uncertainties in its benefits analysis. EPA has consulted with the Science

Advisory Board (SAB) Council1 and the Office of Management and Budget (OMB)
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to develop and improve the methods used in conducting regulatory impact analyses

(RIAs).

The SAB and the NAS support the continued use of empirically-based cohort studies in estimating the benefits of mortality risk reduction associated with air pollution. However, the NAS recommended that (EPA should move the assessment of uncertainties from its ancillary analyses into its primary analyses by conducting probabilistic, multiple-source uncertainty analyses. To do so, EPA will specify probability

distributions for major sources of uncertainty based on available data and expert

judgment’’(NAS, 2002: 14). The NAS further stated that EPA should build on its

earlier experience in developing and using expert elicitation by the Office of Air

Quality Planning and Standards in the 1980’s and by others in fields such as climate change, residential radon cancer risks, and stratospheric ozone depletion. They

also recommended that EPA clearly distinguish between data-derived components of

an uncertainty assessment and those based on expert opinions.

In response to the NAS recommendations, EPA has developed a comprehensive,

integrated strategy for characterizing the impact of uncertainty in key elements of

the benefits modeling process (e.g., emissions modeling, air quality modeling, health

effects incidence estimation, valuation) on the health impact and monetized benefits

estimates that are generated. The strategy includes several different tools and

methods such as meta-analysis, expert elicitation, and other statistical approaches.

Part of this strategy was a collaborative effort between the EPA’s Office of Air

and Radiation (OAR) and the Office of Management and Budget (OMB) on the

Clean Air Non-Road Diesel Rule. EPA extended its collaboration with OMB in 2003–

2004 to conduct a pilot expert elicitation intended to more fully characterize uncertainty in the effect estimates used to estimate mortality resulting from exposure to

PM. The pilot expert elicitation consisted of a series of structured questions, both

quantitative and qualitative, about the nature of the PM2.5-mortality relationship.

The elicitation allowed experts to assimilate multiple sources of information from

scientific studies into a single function that expresses their judgment of the concentration-response relationship for mortality. These judgments were expressed in

terms of median estimates and associated percentile values of an uncertainty distribution.

The pilot was designed to provide EPA with insights into the design and application of expert elicitation methods to economic benefits analysis, and lay the groundwork for a more comprehensive elicitation. The scope of the pilot was limited to a

1-year effort in which we limited our selection of experts to a total of 5 individuals

from lists of nationally recognized experts that participated on two previously established panels of the NAS. The limited scope of the pilot meant that a full expert

elicitation process was truncated and many aspects of the uncertainty surrounding

the PM2.5-mortality relationship could not be quantitatively characterized. Recognizing this, the results of the pilot are only used by EPA for illustrative purposes.

The results of the pilot elicitation were presented in the Clean Air Non-Road Diesel Rule and in the Clean Air Interstate Rule. We presented the primary estimate

of benefits based on the Pope et al. (2002) study as recommended by the SAB. Thus,

the elicitation did not lower our primary estimate of benefits. We then characterized

uncertainty surrounding our primary estimate using a probabilistic range of benefits

based on statistical uncertainty as captured by the Pope et al. (2002) epidemiological

study. The elicitation results then expanded the range of uncertainties that were expressed quantitatively. Both approaches provided insights into the likelihood of different outcomes and about the state of knowledge regarding the benefits estimates.

Both approaches have strengths and weaknesses.

Based on our experience during the pilot, EPA is currently conducting a full-scale

expert elicitation that will provide a more robust characterization of the uncertainty

in the premature mortality function. The full-scale elicitation includes 12 experts

who were nominated by scientists who have published literature on this topic and

from a list of individuals provided by the Health Effects Institute.

The time and cost of conducting an expert elicitation will vary depending on the

depth of coverage of a particular topic. For the Pilot Elicitation, EPA devoted a team

of six technical experts from our staff to the project. We also hired a contractor team

that consisted of three people with expertise in conducting elicitations. Pilot testing

of the elicitation was conducted with EPA staff in the Office of Research and Development. Expenses for the elicitation are associated with the contractor’s efforts to

design and conduct the elicitation (including travel expenses to each elicitation

interview), compensation to the experts participating in the elicitation, and conducting an external peer review of the elicitation. The Pilot Elicitation was limited

in time to a 1-year effort, while the full-scale elicitation will be conducted over a

21⁄2-year period. The total cost of these elicitations has ranged from $200,000 to

more than $500,000, for the pilot and full-scale elicitation, respectively.
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Question 6. Another question asked of Deputy Administrator Peacock is as follows:

‘‘ In my view, the Agency’s budget and resources for hazardous air pollutants research, regulation development and prevention activities have been much lower

than warranted by the statutory requirements in the Clean Air Act. As a result, the

Agency has often been significantly behind schedule. EPA has also recently issued

unauthorized MACT standards incorporating risk factors inappropriately (for example in the plywood/boiler MACT development) and is also unwisely contemplating,

perhaps due to resource constraints, further unauthorized residual risk regulatory

actions. Will you commit to reviewing the air toxics program budget and resources

and advising this committee of gaps in funding or resources that are needed so that

the Agency can promulgate and enforce rules that comport with the statutory requirements of the Clean Air Act?’’

Mr. Peacock answered that ‘‘I am aware of the ongoing demands and the importance of the air toxics program. If confirmed, I will look into this issue and address

any problems if warranted.’’

Can you tell the status of this review and when this question will be answered?

Response. The Agency faces significant workload and resource challenges to fully

implement the air toxics Clean Air Act requirements. In light of these challenges,

we have developed a strategy that prioritizes resources to maximize risk reduction.

To date, we have completed 16 area source standards, and we are working on developing standards for an additional 32 (four of which are the subject of a consent decree). Once completed, standards for the 32 area source categories will address a

significant portion of urban HAP emissions, as outlined in EPA’s 1999 Integrated

Urban Air Toxics Strategy. We also expect to have completed the first 8 residual

risk standards by the end of 2006.

Question 7. Executive Order 12866, which this Administration has said governs

its process for reviewing proposed and final regulations, requires OMB to comply

with certain requirements to improve the transparency of the regulatory development process, such as disclosing relevant information regarding any communications with outside parties while a regulation is under review by OMB. These requirements are designed in part to ensure that the public knows whether people

outside the government are sharing views with OMB about regulations as they are

being reviewed, and to provide the public with information about the changes made

to a rule as a result of the inter-agency review process.

As you know, the PM Implementation rule, when finalized will provide important

guidance to the States for implementing the PM2.5 NAAQS. A number of Senators

at the November 10th hearing raised concerns regarding the relatively slow pace at

which this rule is being developed and released. The official draft of the proposed

PM Implementation Rule went to OMB on October 14, 2004, where it remained for

nearly a year. However in recent times, EPA has had a practice of sending informal

drafts or portions of rules to OMB prior to sending a complete official package for

review. Was this proposed rule or portions of this proposed rule shared with OMB

prior to the official transmission on October 14, 2004? How and when? Which portions or drafts? Please provide all documents in your possession that relate to the

sharing of drafts or portions of the proposal with OMB prior to October 14, 2004.

Response. The recently proposed PM Implementation Rule will help States develop plans to achieve attainment with the health-based PM2.5 NAAQS. Although

I did not have a substantive role in the preparation or review of this proposal, I

have been informed that a draft was sent informally to OMB prior to October 14,

2004. I have no knowledge or records that would show which version or versions

were informally provided to OMB. It is likely that the draft that incorporated comments from the internal EPA workgroup was provided to OMB sometime after

March 2004. The only documents in my possession that relate to the sharing of

drafts or portions of the proposal with OMB prior to October 14, 2004 indicate that

the proposal was to be submitted formally to OMB on October 12, 2004.

Question 8. When OMB has a regulatory package that has been submitted ‘‘informally,’’ do you know whether it logs the dates and names of individuals outside the

government who are involved in any substantive communication with OMB about

the regulation as it is required to do once a regulatory package is submitted formally?’’ Please list each rule that you have worked on at EPA that has been submitted informally to OMB and explain why it was submitted informally. For each

such rule, list the individuals or stakeholders outside the government with whom

you believe OMB had substantive communications after the regulatory action was

shared informally with OMB? Please provide any related documents in your possession.

Response. As I understand it, OMB’s policy under Dr. Graham is to log information about contacts with outside parties on all rules that are under informal review.
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To my knowledge, all major rules I have worked on at EPA were submitted informally to OMB prior to formal submission. Each of these rulemakings embodied complex technical and legal issues, and informal submission to OMB allows reviewers

at OMB and other agencies additional time to read documents, and often leads to

an expedited review process.

I do not possess any documents related to OMB communications with individuals

or stakeholders outside the government after draft rules were informally submitted

to OMB.

Question 9. Section 307(d) of the Clean Air Act, Congress requires EPA to place

in the docket all drafts of proposed and final rules (and accompanying documents)

sent to OMB for interagency review and ‘‘all written comments’’ on those drafts by

other agencies. On a regulatory package that has been sent to OMB for review, if

someone from OIRA or another agency, rather than sending comments in writing

to EPA, were to dictate changes to draft preamble or regulatory text to EPA staff

with the understanding that EPA staff would incorporate these changes, would that

be a circumvention of these provisions rather than compliance with them? What is

the policy with regard to oral conversations regarding changes to EPA proposals or

final rules? Are EPA staff directed that, if they receive changes to text in a Clean

Air Act rulemaking package orally rather than in writing, they are to write the comments down, identify who made the comments, and then ensure that they are placed

in the docket at the appropriate time? If not, why not?

Response. Section 307(d)(4)(B)(ii) states that ‘‘[t]he drafts of proposed rules submitted by the Administrator to the Office of Management and Budget for any interagency review process prior to proposal of any such rule, all documents accompanying such drafts, and all written comments thereon by other agencies and all

written responses to such written comments by the Administrator shall be placed

in the docket no later than the date of proposal of the rule. The drafts of the final

rule submitted for such review process prior to promulgation and all such written

comments thereon, all documents accompanying such drafts, and written responses

thereto shall be placed in the docket no later than the date of promulgation.’’ This

requirement of section 307(d) encompasses ‘‘written’’ comments. EPA procedure does

not require that conversations during the interagency review be recorded and therefore they are generally not transcribed and submitted to the docket; however any

changes to a rule draft reflecting a conversation would be available for review in

the docket.

Question 10. In the question referenced above, sent to you as followup to the November 10, 2005 study you were asked: Will EPA conduct such an analysis and put

it in the record so that each community will be able to see whether their nonattainment status will be better or worse off under the CAIR equals RACT approach?’’

In your answer, you stated that: ‘‘We have not determined analyses to be performed

for the final PM implementation rule.’’ Please indicate whether EPA will or will not

conduct such an analysis and the timeline for doing so.

Response. EPA intends to finalize the PM2.5 implementation rule later this year.

At this time, EPA is considering what analyses will be performed in support of the

final rule. EPA has not made a final decision on whether the analysis suggested in

the question above will be conducted, but given the rulemaking schedule, we will

likely make this decision in April or May.

Please note that EPA has performed analysis of the impact of CAIR and other

existing measures on future PM2.5 and ozone levels. Links to our most recent projections are included on the ‘‘Multi-Pollutant Analyses and Technical Support Documents’’ web page at http://www.epa.gov/airmarkets/mp/. Also, under the Clean Air

Act, States perform local attainment modeling that shows the air quality impact of

additional controls they are using to meet the NAAQS. This information also is

available to the public.

Question 11. In a previous question sent to you as followup to the November 10,

2005 subcommittee hearing regarding the Implementation of the Existing Particulate Matter and Ozone Air Quality Standards, you were asked a question regarding

EPA’s position on the ‘‘turn in ratio’’ for acid rain allowances. Specifically you were

asked: ‘‘If a State submits a State implementation plan that requires utilities in

that State to turn in acid rain allowances at a higher rate (e.g., 3 allowances for

every ton of SO2 emitted in 2015 and later), will EPA allow that State’s utilities

to participate in the federally-run SO2 regional trading program?’’ Your answer did

not respond to this question or a number of the questions that directly followed this

question. Please answer the question above.

Response. In the preamble to the final CAIR (70 FR 25258), we made the following statement, which responds to the question: ‘‘EPA will use a Phase II ratio
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of 2.86-to-1 for all States affected by CAIR who choose to participate in the trading

program.’’

Question 12a. Please also answer the following specific questions that were not

answered in your response on the ‘‘turn in ratio’’ issue: If EPA will not allow a higher turn in rate, why not?

Response. EPA has designed and agreed to implement a trading program to obtain the reductions required under CAIR. If individual States were to change basic

rules of the program such as the retirement ratio, it would impact the allowance

price, changing the cost effectiveness of the program not just for their State but also

for other States. EPA has concerns about a change to such a fundamental component of the program for a small number of States given the impact it could have

on other States. In addition, a tighter retirement ratio does not guarantee any more

emission reductions in the State where it is applied, therefore EPA does not believe

it to be the best mechanism to address local nonattainment issues.

Question 12b. Although EPA may have a preference as to how States get the

emission reductions necessary to demonstrate attainment, what authority does EPA

have for imposing this preference on States?

Response. EPA agrees that States may achieve the emission reductions they need

to demonstrate attainment however they wish. One mechanism that States may

choose to use is an interstate trading program that EPA has agreed to administer.

EPA believes it is very important to use a consistent set of rules in order to have

a trading program that achieves its environmental goals and that EPA can successfully implement on a multi-state basis.

Question 12c. Why is EPA refusing to give States an answer to this important

question when this information could be useful for States as they develop their implementation plans?

Response. EPA made it clear in the preamble to the final rule that States needed

to use a ratio of 2.86-to-1 if they wanted to participate in an EPA-run trading program. Subsequent to finalization of the rule, a number of States have asked EPA

to revisit aspects of the rule such as the requirement to use the 2.86-to-1 ratio. EPA

has explained its rationale (outlined above in (A.)) and has suggested to States that

it would be better to consider alternative mechanisms to achieve emission reductions after they have completed further analysis (such as air quality modeling) to

identify more specifically the reductions they need. Many States are currently engaged in such efforts and, in many of these cases, EPA is participating and providing assistance.

Question 13. With regard to ‘‘informal’’ submission to the Office of Management

and Budget (OMB) of rules, you were asked to list each rule that you have worked

on at EPA that has been submitted informally to OMB. You responded by noting

that all of the rules that you have worked on while at EPA were submitted informally to OMB. Please list all of the rules that you have worked on while at EPA.

Response. Enclosed with this document is a list of all rules on which I have had

significant input since joining EPA. I have had minor involvement in many more

rules than those listed. For example, I reviewed part or all of virtually every signature package involving stationary sources while serving as Counsel to the Assistant

Administrator for Air and Radiation. I would be pleased to provide more information

if needed.

Question 14. Another question sent to you as followup to the November 10, 2005

hearing related to the Air Toxics program and Deputy Administrator Peacock’s commitment to ‘‘reviewing the air toxics program budget and resources and advising

this committee of gaps in funding or resources that are needed so that the Agency

can promulgate and enforce rules that comport with the statutory requirements of

the Clean Air Act.’’ Your answer provided a status update of the current air toxics

program which did not address specific gaps in funding or resources need to comply

with the statutory requirements of the Clean Air Act. Please advise the committee

regarding any gaps in funding or resources that prevent EPA from fulfilling its air

toxics duties under the Clean Air Act.

Response. The Agency faces significant workload and resource challenges to fully

implement the air toxics Clean Air Act requirements. To help ensure we have adequate resources, the President has requested for FY2007 a $2M increase from the

FY2006 enacted budget to enhance EPA’s capacity to meet air toxics rulemakings

under court-ordered deadlines and complete other priority air toxic rulemaking.

These resources will be critical for enabling EPA to implement the Agency’s program to reduce air toxics.
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Question 15. With regard to the Particulate Matter Implementation rule, you were

asked as followup to the November 10, 2005 hearing to provide all documents relating to the sharing of drafts or portions of drafts prior to October 12, 2004. Your response indicates that the only responsive documents you have are documents that

discuss transmission of the proposal on October 12, 2004. Please provide these documents.

Response. Enclosed with this document is a copy of an e-mail I received on October 12, 2004, together with a hardcopy of the draft rule that was attached in the

e-mail. These items are the only documents I have that are responsive to your request.

STATEMENT OF SAM OLENS, CHAIRMAN, ATLANTA REGIONAL COMMISSION ON BEHALF

OF THE ATLANTA REGIONAL COMMISSION

Good morning, Mr. Chairman and members of the Committee. I am Sam Olens,

Chair of the Atlanta Regional Commission (ARC). I am testifying today on behalf

of the ARC. The ARC is the designated Metropolitan Planning Organization (MPO)

for 18 counties within the 20+ county Atlanta 8-hour ozone and fine particulate

matter nonattainment areas. As such, ARC has primary responsibility under the

Clean Air Act for ensuring transportation conformity provisions are met through development of regional transportation plans and programs that support clean and

healthy air for all of our region’s citizens. I am pleased to have this opportunity to

provide our perspectives regarding implementation of new air quality standards in

the Atlanta region.

Atlanta has a long history of nonattainment; primarily with the older 1-hour

ozone standard and more recently with the revised 8-hour ozone standard and new

fine particulate matter standard (PM2.5). Over the past 15 years, since Atlanta was

first designated as nonattainment under the 1-hour ozone standard, we have made

significant progress in improving regional air quality. This resulted in attainment

of the 1-hour ozone standard in 2004—something that many people doubted could

be achieved in a high-growth region like ours. And the levels of ozone have remained low through 2005 (reference Attachment I—Number of Ozone Violation

Days).

Our State air quality agency, the Georgia Environmental Protection Division, was

able to put together a regional air quality plan that enabled us to meet the 1-hour

ozone standard by 2004 due to the following:

• A better understanding of ozone pollution and emission control measures

through improved science;

• Concerted effort in the region to implement effective, innovative pollution control measures; and

• Improved intergovernmental and interagency relationships between the various

organizations that have a role in ensuring clean air in our State and in our region.

At the same time, the ARC has maintained a positive transportation conformity

status for our transportation plan and program since our 2-year conformity lapse

in the late 90s.

These successes have occurred in spite of unprecedented growth, numerous legal

challenges, and implementation of new air quality standards and provisions that

have greatly impacted our planning process.

Although we have made significant progress, in Atlanta we continue to actively

work towards implementation of the new ozone and particulate matter standards.

Twenty counties in our region are designated as nonattainment under the 8-hour

ozone standard. These same counties, plus a portion of two others, are also designated nonattainment under the PM2.5 standard. We continue to deal with a number of significant issues related to air quality planning requirements for both the

new air quality standards and the previous 1-hour ozone standard, in particular as

they impact transportation conformity.

In Atlanta we continue to deal with the very significant concern regarding the

Clean Air Act requirement to implement Federal Reformulated Gasoline (RFG).

RFG is a provision of our reclassification to Severe nonattainment status under the

1-hour ozone standard. Technical analysis has shown that this fuel blend would actually contribute to an increase in emissions over our existing Georgia gasoline

which is tailored to meet our unique air pollution needs. The ARC, along with our

State air quality agency, has requested legislative relief from this requirement (reference Attachment II—Memo: Federal RFG Impact on the Atlanta Area, Attachment III—Resolution by the ARC Requesting Legislative Relief and a Time Extension from Federal RFG Requirements). Although the 1-hour standard has been revoked as of June 15, 2005, and the requirement to implement this fuel blend is cur-
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rently stayed by the courts, examples such as this create uncertainty in the modeling process, inconsistency in the planning process, and make it very difficult to

develop an accurate emissions inventory.

Similarly, we continue to deal with continued, habitual delay in release of rules

and guidance documents that direct implementation of new standards. Much of the

burden of implementing new standards could be alleviated if we ensured that rulemaking and guidance is provided in a timely manner. The efforts of MPOs and

States who are trying to meet statutory deadlines for conformity, attainment, etc.

must be recognized. These deadlines are fixed by law, yet dates to receive rules and

guidance continually slip months, even years, past promised timeframes. This is unacceptable and needs to be addressed as we continue to implement the new standards. Some specific examples related to rulemaking delay are listed below.

• Transportation conformity is required within 1 year of a nonattainment designation. Transportation conformity guidance related to the revised 8-hour

ozone standard was released in July 2004 with conformity determinations required by June 2005. Guidance related to emissions inventory development for

PM2.5 was released in August 2005 with conformity analyses pending April

2006. While it may appear that this still leaves enough time for areas to complete the conformity determination process, it is not. EPA is not sensitive to the

significant time and resources it takes to develop a transportation plan and program, complete a conformity analysis, and have everything reviewed and approved by multiple agencies. Guidance needs to be provided on or before nonattainment status designations to allow areas time to prepare for and implement conformity requirements.

• Attainment plans are due within 3 years of nonattainment designation. For

8-hour ozone, designations were made June 2004. Air quality plans are due by

June 2007. Phase II of the 8-hour ozone implementation rule that deals with

State Implementation Plan development has been delayed well over a year after

nonattainment area designations. This rule directs air quality plan development

and is not yet available in final form for State air quality agencies.

I have included in our written submittal some additional detail related to the

issues we are dealing with in Atlanta as we transition to these new standards from

a transportation conformity perspective (reference Attachment IV—Implementing

the New Air Quality Standards in Atlanta, Presentation at the National Association

of Regional Councils 38th Annual Conference, June 2004).

There has been a great deal of concern expressed related to implementation of the

new ozone and particulate matter standards, in particular that the deadlines to

meet the standards are too short and that the Clean Air Act should be amended

to provide more time to attain. These concerns become even greater in the context

of the current review and potential tightening of the particulate matter standard

that is only now at the beginning stages of implementation. The ARC shares many

of the concerns, as implementation of new standards will always require a change

to our process, additional (and often significant) resource expenditures, and additional complexity to an already complicated transportation planning process. However, while we recognize that there are tough air quality standards in place and

that they do have a considerable impact on the planning process, we also acknowledge that these standards are based on good science and health data and are in

place for a reason and, as such, need to be addressed in a timely manner. Furthermore, we see many of the issues that we are dealing with as external to the primary

issue of attainment deadlines and, as such, can be dealt with within existing law.

In Georgia, we are not hearing from our State air quality agency that attainment

deadlines associated with the new standards are a concern. It is, in fact, probably

too soon to tell if we will have an issue with meeting attainment deadlines as modeling for these standards has only just begun. If we are hearing anything, it is that

we need to address these standards in a timely manner. Atlanta is an area experiencing tremendous growth. With approximately 4 million people living in the region

today and an expected 2.3 million more people projected to move to the region in

the next 25 years, we are dealing with an incredibly large population that is breathing unhealthy air. Our State air agency understands that nonattainment status has

a major impact on growth and economic development. Our unprecedented growth

translates to both a larger population being exposed to unhealthy air and significantly increased health and other economic costs for the region. The longer we delay

implementation of these health-based standards, the longer we pay these costs.

For the newer ozone and particulate matter standards, the deadlines and mandates we have to plan for and implement are not unreasonable. We are on the right

track with our current planning and modeling to develop effective air quality plans

and regional pollution controls needed to attain. If we find in this planning that we
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need more time to attain the standard(s), there are currently provisions in existing

law and rules that provide a way for us to do this without threatening transportation planning or funding (e.g., for ozone through reclassification or for particulate

matter through the opportunity to add 5 years to the attainment deadline, up to

2015, if the State can prove such an extension is warranted).

Currently, our concern in Georgia is not our pending attainment deadlines, but

ensuring we have the support at the national level to meet these deadlines. This

includes providing rules and guidance in a timely manner and, most importantly,

ensuring that we maintain the flexibility and control needed to implement pollution

control measures that work best for our region. Our region must have the ability

to implement innovative, proactive measures to improve our air quality. The more

tools and options we have the better. Senator Voinovich has already shown great

leadership in this area through introduction of the Diesel Emissions Reduction Act

of 2005, a program that will provide substantial funding through national and

State-level loans and grants to voluntarily retrofit existing diesel engines to improve

air quality and protect public health. This legislation is a perfect example of providing nonattainment areas the opportunity and the flexibility that they need to design programs to fit their own unique needs. This is EXACTLY what we need in

an area like Atlanta and where our focus needs to be.

I will end with a few comments related to the potential revision of the fine particulate matter standard. The timing of this review/revision is of particulate concern

for Atlanta. Currently the EPA is reviewing the particulate matter standard as required by the Clean Air Act, and will revise the standard if needed based on more

current health data. EPA is currently finishing that review and is to recommend

action on the standard by end of the year with a final standard proposed by late

2006. If a new fine particulate standard is promulgated by EPA according to this

timeline, it will confuse not only the public, but our decisionmakers, and potentially

divert staff attention from our current efforts to meet the existing PM2.5 standard.

While promulgating a new standard is a very time consuming process that will

occur over the course of several years, it requires staff attention in the interim and

serves as an additional resource drain as we work towards implementing the current standard. I am assured by our State air quality partners, however, that because this process will overlap our present planning effort, that ongoing planning

related to our existing fine particulate matter standard will be applicable to any

newer, more stringent standard.

In Atlanta we are growing accustomed to the changing face of our region. We have

accepted and are actively preparing for the challenges that our projected growth will

bring. At the same time, we acknowledge that environmental standards play a very

important role in how we deal with this growth. We accept that they have become

more stringent over time and may continue to become tighter in the future. While

updates to any air quality standard can be complicated and will carry its own challenges, we trust that any update is based on a technically rigorous process that is

vetted through a strong scientific review. If indeed standards are strengthened to

improve public health, they will be incorporated into the long-range planning processes that are managed by the ARC and the State in a timely manner. To ensure

that new standards are implemented efficiently, however, we must have support

from our Federal partners in providing us effective guidance and the means by

which to meet clean air standards in a manner suitable to our own unique region.

Mr. Chairman and members of the committee, the ARC looks forward to working

with you and others as we, collectively, work to implement air quality standards

that protect our citizens from poor air quality. Once again, on behalf of the ARC,

I thank you for this opportunity to present our views on implementation of the new

air quality standards.
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ATTACHMENT II

FEDERAL RFG IMPACT ON THE ATLANTA AREA

MEMORANDUM

TO: TCC and TAQC Members

FROM: Tracy Clymer

DATE: September 3, 2003

SUBJECT: Federal RFG Impact on the Atlanta Area

The Atlanta 1-hour nonattainment region will be reclassified from a Serious to a

Severe air quality area by late 2003 or early 2004. EPA has made clear that this

action is the result of a technicality and does not mean that the Atlanta area’s air

quality is worsening. Atlanta’s air quality has not declined; in fact, it has improved,

with ozone monitoring data indicating a significant decline in the number of violations of the 1-hour standard over the last several years.

Once the 1-hour nonattainment area is reclassified, Federal Reformulated Gasoline (Federal RFG) will be required 1 year from the effective date of reclassification.

This means that Federal RFG will first be in use for the 2005 ozone season. There

are several implications for the Atlanta area concerning the use of Federal RFG:

• Federal RFG is designed to reduce VOC and carbon monoxide emissions

• NOx reductions are more effective for reducing ozone in the Atlanta area

• GA gasoline already in use is tailored to reduce NOx emissions

• Ozone concentrations in Atlanta will likely increase if Federal RFG is implemented

In fact, analysis performed by the Georgia EPD for the 2005 ozone season indicates the following increases in ozone precursors from motor vehicles if the Federal

RFG is required:

Modeled Increase in Ozone Precursors due to Federal RFG Implementation, Year 2005

Pollutant Emission increase, tons per day Percent Increase over GA

Gasoline Emissions, Percent

VOC 0.94 .............................................................................................. 0.65

NOx 11.53 ............................................................................................ 4.1

Fortunately, the Federal RFG problem could be solved if Atlanta is granted a 2-

year extension on the requirement to adopt Federal RFG as a Severe area:

• NOx emissions are reduced by lowering the sulfur content of gasoline

• A new Federal low-sulfur gasoline mandate will be fully implemented by 2006

• The low-sulfur requirements will apply to Federal RFG

• Once the low-sulfur requirements are fully implemented, Federal RFG makes

sense

Once the Federal mandate is fully implemented the benefits of using the Federal

RFG will approximate the benefits of the GA gasoline.

ATTACHMENT III

RESOLUTION BY THE ARC REQUESTING LEGISLATIVE RELIEF AND A TIME EXTENSION

FROM FEDERAL RFG REQUIREMENTS

Draft endorsed by TCC on 9/5; to TAQC on 9/11 and Board 9/24

RESOLUTION BY THE ATLANTA REGIONAL COMMISSION REQUESTING LEGISLATIVE RELIEF

AND A TIME EXTENSION FROM FEDERAL REFORMULATED GASOLINE (RFG) REQUIREMENTS

WHEREAS, pursuant to the Clean Air Act Amendments of 1990 the 13 county

Atlanta region was designated as a ‘‘serious’’ nonattainment area under the onehour ozone standard; and

WHEREAS, the Atlanta Regional Commission as the Metropolitan Planning Organization for the 10 county Atlanta Region develops transportation plans and programs pursuant to 23 CFR Part 450; and
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WHEREAS, the Atlanta Regional Commission performs the necessary technical

analysis of plans and programs for the 13 county Atlanta Nonattainment Area as

required to demonstrate conformity with motor vehicle emission budgets; and

WHEREAS, in 1999 a Georgia low sulfur fuel was implemented in a 25 county

region; and

WHEREAS, in 2003 the Georgia low sulfur fuel was implemented in an expanded

45 county market in support of the one-hour ozone attainment demonstration; and

WHEREAS, the 13 county Atlanta nonattainment area is expected to be reclassified from a ‘‘serious’’ to a ‘‘severe’’ nonattainment status as a result of legal action;

and

WHEREAS, as a result of this reclassification, Federal law requires implementation of Federal Reformulated Gasoline within the nonattainment area within one

year of reclassification; and

WHEREAS, analysis of Federal Reformulated Gasoline by the Georgia Environmental Protection Division demonstrates that this fuel would cause an increase in

2005 emissions of 0.94 tons per day of VOC and 11.53 tons per day of NOx in the

13 county nonattainment area; and

WHEREAS, the Atlanta region is committed to using the cleanest fuels possible

to attain national ambient air quality standards in the shortest timeframe possible.

NOW THEREFORE BE IT RESOLVED that the Atlanta Regional Commission requests legislative relief from implementation of Federal Reformulated Gasoline in

the 13 county Atlanta nonattainment area until such time that this fuel meets or

exceeds Georgia low sulfur fuel requirements in the Atlanta region; and

BE IT FURTHER RESOLVED that the Atlanta Regional Commission supports

the Georgia Environmental Protection Division request to Congress that Atlanta be

granted an extension on a requirement to adopt Federal Reformulated Gasoline in

the Atlanta nonattainment region.
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1For more detailed information related to emission control standards for passenger vehicles

see http://www.epa.gov/otaq/ld-hwy.htm.

ATTACHMENT V

MAJOR MOBILE SOURCE POLLUTION CONTROL MEASURES IMPLEMENTED IN ATLANTA

*The controls listed relate only to the mobile source sector and do not reflect the

numerous controls applied to stationary and area sources in Atlanta.

While the Atlanta region has gained a national reputation because of its high

quality of life and booming economy, we are confronted with numerous transportation and air quality challenges. With rapid growth forecast over the next 25 years,

how we address issues of mobility for people and goods and comply with Federal

air quality standards is paramount. These issues require deliberate and thoughtful

planning if we are to maintain the quality of life that has attracted nearly one million new residents to the Atlanta region in the past decade.

As the regional planning and intergovernmental coordination agency for the metropolitan area, the ARC is responsible for a federally mandated metropolitan transportation planning process that meets all the requirements of the Clean Air. A number of innovative air pollution control measures have been implemented through the

transportation planning process as a result of the air quality nonattainment status

of the Atlanta region. Despite the significant progress made in improving air quality

over the last decade, additional air pollution controls are being developed to ensure

continued success in cleaning the air and maintaining a healthy environment for the

region’s citizens.

A number of significant air pollution controls related to the transportation sector

are defined below to give the reader an idea of the great number and type of mobile

source emissions control programs that are underway in the region.

1.0 STATE IMPLEMENTATION PLAN CONTROLS

The SIP is a federally enforceable plan that identifies how each State with a designated air quality problem will attain and/or maintain national air quality standards. The SIP estimates the level of air pollutant emissions generated from multiple

source categories and defines the necessary reductions needed to attain air quality

standards. It establishes a plan (through State regulations and programs) to reduce

emissions to necessary levels to achieve clean air.

The SIP must take into account all Federal air pollution control regulations in

place or slated for implementation within the time frame of the SIP, and then identify additional State mandated regulation(s) and/or voluntary measures, if needed,

to bring the nonattainment area(s) into compliance with air quality standards by

the date established in the Clean Air Act. All of the State adopted control measures

identified within the SIP become federally enforceable upon Federal approval of the

SIP. Below is a listing and brief discussion of the mobile source emission controls

(i.e., transportation-related controls) identified in the State Implementation Plan for

the 1-hour ozone standard and the associated 10-year Maintenance SIP for the 1-

hour ozone standard. This attainment plan ultimately yielded attainment of the 1-

hour standard in June 2004.

1.1 NATIONAL REGULATIONS

• Federal vehicle exhaust (‘‘tailpipe’’) emission standards for passenger vehicles to

include1:

• Tier 1 Standards.—Emission standards designed to reduce light-duty gas vehicle and light-duty gas truck (i.e., typical passenger vehicles) emissions by 40

percent from standards set in the 1980’s. Tier 1 standards were phased in between 1994–1996.

• National Low Emission Vehicle (NLEV) Standards.—Emission standards designed to reduce light-duty gas vehicle and light-duty gas truck NOx emissions

beyond Tier 1 standards by approximately 50 percent for light-duty gas vehicles

and 17 percent for light-duty gas trucks. NLEV standards were implemented

in 2001.

• Tier 2 Standards.—Tier 2 standards will be phased in beginning in 2004 and

are designed to reduce emissions from NLEV standards for passenger vehicles

by approximately 75 percent - 85 percent and 95 percent for passenger trucks.

Tier 2 standards reflect the first time that cars and light trucks are held to the

same stringent standards.
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2For more detailed information related to emission control standards for heavy-duty vehicles

see http://www.epa.gov/otaq/hd-hwy.htm. 3 Enhanced inspection and maintenance programs are a Federal requirement for Serious and

above ozone nonattainment areas, but the State implements the program and decides how the

Federal performance standards will be met. 4The PSG program has evolved into a program of the Clean Air Campaign which consists of

a number of partnering organizations, both public and private (e.g., ARC, GAEPD, GDOT, the

Metro Atlanta Chamber of Commerce et al.,), that joined together to improve the Atlanta region’s air quality and mobility through coordinated programs designed to change individual and

employer behaviors. 5Gasoline vapor recovery is a Federal requirement for ozone nonattainment areas, but the

State implements the program.

•Federal vehicle exhaust emission standards for heavy-duty vehicles to include2:

• Emission standards designed to significantly lower heavy-duty diesel NOx exhaust levels. This program began in 1998 and ran through 2003.

• Emission standards designed to further reduce heavy-duty diesel NOx exhaust emission levels beyond the 1998 standards by approximately 50 percent.

This program began in 2004.

• Beginning in 2006, diesel fuel at the national level will contain 97 percent

less sulfur.

• In combination, these programs will reduce emissions of new trucks and

buses by up to 95 percent beginning in the year 2007.

1.2 STATE REGULATIONS

Enhanced annual I/M program designed for light—duty gasoline cars and trucks

(model years 1975 and newer) within the 13-county 1-hour ozone nonattainment

area.3

• Low-Sulfur Georgia gasoline for light-duty cars and trucks

• In October of 1999, a two-phase State rule promulgated the use of low sulfur

gasoline in the Atlanta region. The first phase, effective summer 1999, decreased the average sulfur concentration of gasoline sold in a 25-county region

from approximately 300 ppm to 150 ppm during the summer months, from June

1 through September 15. The second phase, effective September 16, 2003, further reduced the average sulfur concentration to 30 ppm. In addition, phase 2

required that the low sulfur gasoline be sold year round in a 45-county market.

• The reduction in sulfur content enhances the performance of the vehicle’s

catalytic converter thereby reducing NOx and VOC emissions, which are shown

to be more effective at reducing ozone levels in the Atlanta area.

• Partnership for a Smog-Free Georgia

• The Partnership for a Smog-Free Georgia (PSG) is a loosely defined term

used to represent all voluntary travel demand management efforts operating in

the Atlanta nonattainment region4. The PSG program was originally defined as

a voluntary ozone action program implemented by EPD to attain voluntary actions from employers, employees, schools and the local citizenry in the Atlanta

metro area to improve regional air quality by changing typical commuting and

other lifestyle behaviors that contribute to unnecessary ozone production. Over

time, this effort has transformed significantly and become part of a larger cooperative effort between business and government entities, public and private sector organizations, that work to coordinate activities to reduce traffic congestion

and improve air quality in the metro Atlanta region.

• Stage II gasoline vapor recovery5 designed to ‘‘catch’’ gasoline vapors (VOC

emissions) emitted from the gas tank while fueling a vehicle and redirect the vapors

back into the gasoline storage tank.

• Atlantic Station Brownfield Redevelopment

• The Atlantic Steel Mill, located in midtown Atlanta, ceased operations in the

late 1990s. The site was determined to be a severe brown-field clean-up site by

EPA; clean-up and redevelopment of the site was subsequently approved as a

Transportation Control Measure in the SIP. Atlantic Station will be a mixed use

development covering approximately 140 acres. It will include residential, office,

entertainment, commercial, and recreational uses. The developer will provide

transit access throughout the site with connections to the Arts Center MARTA

rail station. The thought behind such a development is that reductions in vehicle miles traveled will be observed due to the central location, density of the
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development, and the increased mix of uses on the site that encourage a decreased need to rely on cars as the sole mode of travel.

2.0 REGIONAL TRANSPORTATION PLAN CONTROLS

In the last 10 years, the Atlanta region has gained a million new residents, with

ARC forecasts estimating an additional 2.3 million residents in the region by 2030.

The ARC’s latest long range plan, Mobility 2030, attempts to address the transportation needs in the region through four primary goals and objectives:

(1) Improve accessibility and mobility for all people and goods,

(2) Maintain and improve system performance and preservation,

(3) Protect and improve the environment and the quality of life, and

(4) Increase the safety and security of the transportation system.

In order to achieve the third goal to protect and improve the environment and

quality of life, transportation projects that could potentially increase emissions of air

pollutants need to be offset or balanced by projects that help to mitigate the increase in emissions. This is not an easy task given the rapid growth that Atlanta

has experienced and the foreseen continued growth for the region.

The majority of decreases in on-road motor vehicle emissions will come from significant improvements in engine technology and fuel controls for all vehicle types;

if these regulations and innovations were not in place, it would be very difficult for

transportation planners to develop plans that meet the stringent requirements of

the Clean Air Act considering the tremendous growth the Atlanta region is enjoying.

Transportation or travel patterns are founded on many decisions and elements that

are largely out of the control of transportation planners, for example: land use, residential growth areas, growth of major employment centers, commercial and private

vehicle sales, individual driving habits, and much more. However, good transportation planning can encourage activities that help decrease emissions by encouraging multi-modal travel, accessibility to alternative modes, and more efficient use

of the existing transportation infrastructure. Programs that support these activities

not only contribute to improvements in air quality, they also contribute to meeting

the other transportation goals outlined above.

Following is a discussion of some of the different types of programs that have

been implemented and/or encouraged in the long range transportation planning

process for the Atlanta region.

2.1 LIVABLE CENTERS INITIATIVE

The Livable Centers Initiative (LCI) promotes quality growth in the region by encouraging greater mobility and livability within existing employment and town centers, thereby using the infrastructure already in place instead of building anew. The

program awards $5 million in planning grants over 5 years, with 2004 the final year

in the initial LCI program. ARC is currently exploring the best ways to continue

and expand this popular program in the future. To be considered for funding, LCI

study scopes must demonstrate:

• A local planning public outreach process that promotes the involvement of

stakeholders,

• A diversity of mixed-income residential neighborhoods, employment, shopping

and recreation choices at the employment and town center level, and

• Access to a range of travel options including transit, roadways, walking, and

biking to enable access to multiple destinations within the study area.

2.2 BICYCLE AND PEDESTRIAN NETWORK

Bicycle and pedestrian paths have the potential to improve air quality by providing an alternative mode for a trip other than driving. Bicycling and walking are

becoming more realistic modes of transportation for Atlantans as traffic congestion

becomes more severe. According to the 2000 Census, 3.5 percent of the U.S. population walked to work while 1.3 percent used other means, such as bicycling. The

ARC has been promoting safe, functional and regional bicycle and pedestrian planning since 1973 and continues to update its process to address new needs and

trends. The ARC recently adopted the 2002 Regional Bicycle and Pedestrian Walkways Plan which assesses current trends and sets goals, objectives, and performance

measures for future bicycle and pedestrian planning.

2.3 TRANSIT

Long range transportation plans emphasize the need for an integrated transit system that ties into the existing MARTA system, HOV lanes, and areas of interest.

Future plans for the Atlanta region include an expansive regional transit system
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that is based primarily on Bus Rapid Transit (BRT). BRT is a rubber-tired system

that runs in a dedicated or restricted lane and can be deployed quickly. BRT is

planned for every interstate and many of the region’s major highways, roadways,

and surface streets. This concept is planned to be supported by local buses.

2.4 SMART CORRIDORS

The Smart Corridors concept relies on technology to improve the efficiency of the

existing transportation system. In the current long range plan, a network of more

than 1,600 miles of roadways will rely on technology to help improve flow. This use

of technology is often referred to as Intelligent Transportation Systems or ITS. Specifically, ITS is the application of a combination of technologies to the existing transportation system to save time, lives, and money. The goal is two fold: safer, quicker

travel with enhanced mobility and efficient use of existing transportation infrastructure. The benefits of ITS include (but are not limited to) better travel information,

quicker emergency response, easier travel, improved traffic flow, fewer traffic jams,

improved trucking management, faster goods delivery, and safer travel. All of these

benefits work to decrease traffic and gridlock and, thus, improve the quality of the

air.

2.5 HIGH OCCUPANCY VEHICLE SYSTEM

The current HOV system in place in the region allows for more efficient transportation of buses (and other forms of mass transit) along with high occupancy vehicles

or carpools. Carpools and mass transit encourage individuals to travel more efficiently in order to achieve a quicker, more reliable travel time. At the same time,

emissions are reduced to the degree that HOV or mass transit trips replace single

occupancy vehicle trips and improve traffic flow. The current long range plan expands the HOV system to every interstate and major highway in the region. In addition to the possible increased efficiency gains, the expansion of the HOV system

also provides the potential for some sort of variable or congestion pricing system in

the future.

2.6 ULTRA LOW SULFUR DIESEL INITIATIVE

The Georgia Environmental Protection Division has established a multi-state coalition that will provide the metro Atlanta area and possibly adjacent States with

ultra-low sulfur diesel (ULSD) earlier than the 2006 federally required phase in

date. The goal is to consolidate individual State demands in order to meet the minimum demand required by refineries.

2.7 SIGNAL COORDINATION EFFORT

In 2003, Georgia Governor Sonny Perdue announced an initiative to retime metro

Atlanta’s traffic signals. This initiative is aimed at improving traffic flow in metro

Atlanta; doing so would also decrease vehicle emissions. The Georgia Department

of Transportation estimates that there are over 900 signals in the City of Atlanta

alone; the effort will focus on the most congested areas first.

STATEMENT OF JAMES D. WERNER, DELAWARE DEPARTMENT OF NATURAL RESOURCES

AND ENVIRONMENTAL CONTROL

Thank you Mr. Chairman and members of the Environment and Public Works’

Subcommittee for the opportunity to speak with you today about implementing the

National Ambient Air Quality Standards (NAAQS) for fine particles and groundlevel ozone. I serve as the Director of the Division of Air and Waste Management

for the Delaware Department of Natural Resources and Environmental Control. I

previously served in a similar position in the Missouri Department of Natural Resources, and previously in the Environmental Management office of the U.S. Department of Energy and for a private engineering consulting firm. With me today is Ali

Mirzakhalili, who is the Administrator of the Air Quality Management Section in

our Division. Together we have more than 40 years of professional experience in air

pollution control and engineering.

At the outset, let me compliment Senators Voinovich and Carper for their leadership on reducing diesel emissions. The Diesel Emissions Reduction Act (DERA), enacted as part of the Energy bill, can be a vital piece of the puzzle we are gathered

here today to solve. We agree with the recent letter by the National Governors’ Association, the National Conference of State Legislators, the National Association of

Counties and the National League of Cities who expressed the hope that DERA

would be funded ‘‘at $200 million in [the] Fiscal Year 2007 budget without affecting
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1 Joint letter from the National Governors’ Association, the National Conference of State Legislators, National Association of Counties and the National League of Cities to President George

W. Bush, November 2005. 2For example, NERA Economic Consulting for the American Petroleum Institute, Economic

Impact of 8-Hour Ozone Attainment Deadlines on Philadelphia Region, September 2005 (released November 7, 2005).

funding support for other key environmental programs.’’1 We are confident that cooperating on such result-oriented solutions will incrementally yield the health and

environmental benefits through cleaner air we all seek.

This solution, however is only one of several actions needed to attain the air quality standards on a reasonable schedule, which is an often-deferred goal. Implementation of the existing particulate matter and ozone standards are a minimum vital

step for protecting Delaware. We will describe Delaware’s situation, our actions to

control the air pollutants, and the enormous health benefits possible through implementation of these extraordinarily important public health protection measures.

A. DELAWARE—SMALL, PRECIOUS AND DOWNWIND

President Thomas Jefferson dubbed Delaware ‘‘The Diamond State’’ because we

are ‘‘small but precious.’’ To which we would add, ‘‘downwind.’’ In few other States

is the fate of our air quality decided before we wake up in the morning and start

turning on lights or driving cars. As you may know, all of Delaware is currently

nonattainment for ozone, and our most populous county, New Castle, is nonattainment for fine particulates. This situation should not obscure the fact that we have

made enormous progress improving air quality. We have met the one-hour standard

for ozone, and substantially reduced SO2 emissions, especially from the oil refinery

in Delaware City, which is one of the few oil refineries with the capability of processing ‘‘sour’’ crude. Thanks largely to a variety of State measures and EPA’s Clean

Air Interstate Rule (CAIR) rule and implementation we expect further improvements in air quality. Nonetheless, Delaware will continue to fail to meet the ozone

standard in 2010, despite our best efforts. Again the main reason is our down wind

location. As with many policy questions, where you stand depends on where you sit.

We sit at the end of a conveyor belt of air pollution that is loaded in the mid-west

and deliver fully cooked on the Atlantic seaboard. Monday’s rush hour in St. Louis

and Cincinnati can become Wednesday’s Ozone alert in Delaware. Part of our routine function as the State air agency is to constantly monitor air quality and provide

reports on the Internet. Often, our high pollution levels are measured in southern

Delaware where there more acres of soybeans than suburbs, and far more chickens

than people or industrial emissions. This observation is no puzzle when you consider

upwind sources.

To some, the expected nonattainment is an excuse to kick the can down the road

even further. To us, it motivates us to seek other cost-effective controls to control

ozone precursors and PM2.5 sources. For example, we are pleased to announce Delaware DNREC Secretary John Hughes recently signed a ‘‘Start Action Notice’’ to initiative rulemaking to reduce emissions from Delaware’s older, high-emitting coal

and residual oil fired powerplants. This ‘‘multi-pollutant regulation will control

NOx, SOx and mercury. The goal is to adopt a final regulation by fall 2006. Second,

we are regulating industrial boilers. Third, we have just completed permitting of a

major source of Volatile Organic Compounds (VOC)—the lightering (off-loading of

crude oil) of Supertankers coming out of the Atlantic Ocean into the Delaware Bay

before they make their way upriver to refiners in Delaware, Pennsylvania and New

Jersey. We are proud that this lightering permit was negotiated in a way that results in a win-win by allowing the lightering company to refit their entire fleet with

vapor balancing equipment to capture the lost VOCs, which is a product for them

and their customers.

We are pursuing this variety of air pollution controls initiatives because we know

the benefits outweigh the costs. We also know that national and regional solutions

are necessary to help control air quality in Delaware. We persevere nonetheless

knowing we cannot ask others to take action we ourselves are not willing to take.

B. AIR POLLUTION COSTS AND BENEFITS: DE ́ JA` VU ALL OVER AGAIN

Recent reports2 of the costs, technical challenges and complexity of meeting Clean

Air Act attainment deadlines remind me of the observation of baseball great and

philosopher, Yogi Berra, ‘‘It’s De ́ja` Vu all over again.’’ Regrettably, much of the analysis behind these claims has not been subject to the normal peer review process for

publication in a scientific journal. More substantively, it fails entirely to consider

the substantial benefits to controls and examines only the projected costs. Finally,
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3The Burden of Asthma in Delaware, Delaware Health & Social Services Division of Public

Health, and Department of Natural Resources and Environmental Control, August 2005. 4 EPA, Unfinished Business: A Comparative Assessment of Environmental Problems, 1987.

5 EPA, Reducing Risk: Setting Priorities and Strategies for Environmental Protection, SAB–

EC–21, September 1990. and Stevens, William K., ‘‘What Really Threatens the Environment,’’

New York Times, January 29, 1991.

the complexity of the Clean Air Act is nothing new to those of us who live in this

world of air pollution control. We are more sympathetic than most to the desire for

simplification. The essential management metric for evaluating the performance of

any proposal is the impact on air quality. And by this measure, we cannot support

trading off paperwork simplification for dirtier air in the real world. We urge the

Committee not to confuse ‘‘harmonizing’’ dates with merely ‘‘kicking the can down

the road’’ on improving the air quality and achieving the sustainable health benefits

known to be possible.

These ‘‘cost-only’’ studies also have had a strong track record of overstating the

eventual costs, whether it was the original acid rain studies or the more recent estimates of New Source Review (NSR) compliance. And on this matter we must also

disagree: we do not agree that American engineers lack the skill and creativity to

develop innovative technologies and methods for achieving air pollution reductions

more cost-effectively than merely extrapolating from current trends. We also stand

ready to continue to pursue regulatory streamlining that reduce compliance costs

(e.g., paperwork and permitting value stream mapping. In short, we are very bullish

on American ingenuity, and have been richly rewarded with our confidence in the

past.

We are not insensitive to costs. We live in the communities where our neighbors’

jobs are on the line. However, can not ignore the substantial and subsequent savings derived from health-related costs from air pollution. So, the question is not

whether there are costs, but rather ‘‘who bears the costs?’’ There are clear, though

less quantifiable, costs to public health that result from failing to address air pollution problems. In conjunction with our State Division of Public Health, Delaware recently released a report on ‘‘the Asthma Burden’’,3 which showed a continuing increase in the number of asthma cases. We realize these asthma cases cannot be attributed solely to air pollution. However, it provide local data supporting hundreds

of other studies finding a rising tide of asthma that represents a terrible burden

on individuals, families, communities, employers and the economy. As you consider

various options for potentially adjusting current schedule for compliance, we urge

you to consider the other side of the cost formula; the health benefits and subsequent savings derived from controlling air pollution promptly.

We realize there are those who argue that health standards should be subject to

strict cost-benefit analysis. We respectfully disagree with this view. However, this

is not the questions before us. Over the years, every major, peer-reviewed study has

found substantially greater benefits than costs from controlling air pollution, and

found greater benefits from air pollution control than virtually any other environmental programs (e.g., oil spill cleanup). Among the most prominent studies was

EPA’s ‘‘unfinished business report, release in 1987, which found air pollution to be

among the highest benefit program in EPA.4 Few years later, under President

George H.W. Bush, EPA’s Science Advisory Board reviewed this assessment more

rigorously and found uncertain in the estimate in many areas, except air pollution

control.5 Criteria Air pollutants were ranked as a high risk by the unfinished Business report in the 1980’s. In 1990 the Science Advisory Board report on Reducing

Risk ‘‘. . . considered to be supported more firmly by the available data than were

the rankings for the others.’’ More recently, in 2003, the White House Office of Management and Budget, Office of Information and Regulatory Affairs, under John

Graham, found that one of the most clear examples of an environmental program

where the benefits clearly outweigh the costs is in the area of air pollution control.

C. ATTAINMENT OF MINIMUM AIR QUALITY STANDARDS—FOLLOWING THE SCIENCE

1. Smog: Ground-level Ozone Can Give Your Lungs a ‘‘Sunburn’’

Ozone is essentially highly energized oxygen that contains an extra oxygen atom,

which results in a respiratory effect sometimes compared to giving your lungs a sunburn. It is not emitted directly but results from ‘‘cooking’’ precursors like NOx and

VOCs in sunlight. Ozone is a strong respiratory irritant that affects healthy individuals as well as those with impaired respiratory systems. It can cause respiratory

inflammation and reduced lung function, and can reduce human’s resistance to colds

and pneumonia. Ozone also adversely affects trees, crops (soybeans are a particularly sensitive species), and other vegetation. The national agricultural loss from
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6 (61 FR 65742, December 13, 1996, National Ambient Air Quality Standards for Ozone: Proposed Decision) An examination of the monetized benefits reported above indicates that most

of the estimated benefits accrue from attainment of the 8-hour, 0.08 ppm primary standard with

a smaller incremental improvement obtained by the addition of a seasonal secondary standard.

The projected national approximations for commodity crops and fruits and vegetables suggest

that benefits on the order of 1 to more than $2 billion would result from the proposed 8-hour,

0.08 ppm primary standard, alone or in combination with a seasonal secondary standard.

ozone pollution is estimated to be several billion dollars annually.6 In the 1970’s and

1980’s scientists realized it was not only the concentration of ozone exposure but

also the duration. Consequently, EPA began the lengthy process of developing a revised standard to replace the old ‘‘1-hour’’ standard, with an ‘‘8-hour’’ standard that

reflected this scientific consensus about how ozone affects human lungs. It is a valuable lesson to have read scientific journals and heard academics talk about the

chronic exposure phenomenon in the 1970s and need to change the short-term

standard, only to be involved with implanting a standard to address this issue in

2005. Consequently, when we learn of EPA’s interest in developing a new standard,

you must forgive us if we do not reach for our seatbelt.

Like many metropolitan areas, but States, Delaware has been struggling with

chronic ozone pollution for years. We have worked diligently for many years to overcome the burden of this pollutant on our citizens. As I mentioned, Delaware’s air

quality, statewide, does not meet the standards for ozone, and is not expected to

meet the ozone standard until beyond 2010. We know better than most the difficulty

in explaining to the lay people that we met the standard that we have been pursuing for years, but the rules changed and that we are now violating a new standard. Essentially, our violations do not reflecting worse air quality, but a change in

standard. It is easy to criticize this situation as ‘‘changing the goal line.’’ It is harder

to explain the need to use the best science available. But, given a choice between

easy public relations and good science, our choice should be clear.

We have worked with OTC States to evaluate CAIR and found it does not adequately produce the needed emissions to reach attainment of the ozone and PM

standards in the northeast and mid-Atlantic States. EPA acknowledged that there

would be ‘‘residual’’ nonattainment areas after full implementation of CAIR, but detailed modeling suggests strongly that the difference between EPA’s coarse scale

modeling and that which was done by the OTC shows a larger gap to fill. In an

attempt to derive a solution, a CAIR PLUS alternative was derived and tested. The

model rule, corresponding to this alternative, will provide for lower regional EGU

emissions through, potentially, a higher NOx and SOx allowance retirement ratio,

which will be determined based on SIP quality modeling. The CAIR PLUS concept

may also be a cooperative effort with States outside the Ozone Transport Region

(OTR), as States beyond the OTR are also concluding that reductions beyond CAIR

are needed. Even with this alternative, residual nonattainment areas exist. Considerable area, regional, mobile and local measures, yet to be fully determined, will be

needed to finally fill this gap.

Delaware and several other States, have taken steps to meet the 1-hour ozone

standard, which are essential to fulfill the 8-hour ozone standard.

Delaware has adopted in coordination with other OTC States that are not specifically identified in the CAA:

1. Architectural and Industrial Maintenance (AIM) Coatings: reduced VOC content of numerous coatings beyond federal requirements.

2. Mobile Equipment: established coating equipment standards to reduce VOC

emissions.

3. Gas Cans: required gas cans meet certain performance and permeability standards to reduce VOC emissions.

4. Degreasing: reduced degreaser vapor pressure and instated equipment standards and work practices to reduce VOC emissions.

5. Control of NOx Emissions from Large Boilers: reduced NOx emissions from

boilers larger than 100 mmbtu/hr that weren’t well controlled through other programs.

6. Anti-Idling: reduced VOC, NOx, SOx, and DPM emissions from heavy duty vehicles by reducing allowable idling time.

7. Open Burning: instated strict open burning ban during the ozone season.

8. Minor NSR: reduced criteria pollutant and air toxic emissions by subjecting

new minor stationary sources to top-down BACT requirements.

9. OTC NOx Budget Program: participated in a regional NOx Cap and Trade program to reduce NOx emissions from powerplants (program later replaced by the

NOx SIP Call).

10. Adopted several regulations to reinforce EPA-adopted heavy-duty diesel rules.
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7Delaware Division of Public Health and Department of Natural Resources and Environmental Control, Delaware Air Toxics Assessment Study, phase I final report, August 2005.

In addition, we have begun work on additional measures, not specifically identified:

1. Stationary Generator Regulation: will reduce criteria pollutant and carbon dioxide emissions from stationary generators.

2. Peaking Units: will reduce peak ozone day NOx emissions from combustion turbines used as electrical peaking units.

3. Refinery Boilers: will reduce NOx emissions from large refinery boilers.

4. Non-Refinery Boilers: will reduce NOx emissions from large non-refinery boil- ers.5. Utilities Multi-P: will reduce NOx, SOx, and Hg emissions from Delaware’s coal

and residual oil fired electric utilities.

6. Lightering: will reduce VOC emissions from crude oil lightering operations in

the Delaware Bay.

Finally, we are looking at additional measures where we expect the benefits will

exceed the cost of controls. The point is that there is no ‘‘silver bullet’’ solution, but

a variety of individual actions that yield success.

2. Soot: Fine Particulates Get in Your Eyes and Deep in Your Lungs

The issue of controlling fine particulates is particularly important to Delaware for

a number of reasons. First, and foremost, the air quality in our most populous county is impaired such that it fails to meet the minimum standards for human health

protection from the effects of fine particulates. Second, we are keenly aware that

we cannot control our ‘‘nonattainment’’ situation alone, without contributions by

upwind States. Third, Delaware air is also polluted with toxic chemicals, such as

benzene and vinyl chloride7, which can be absorbed into fine particles with worse

health effects than either pollutant alone.

Fine particulate matter, known as PM2.5, is a complex and harmful mixture of sulfur, nitrogen, carbon, acids, metals and airborne toxics. When breathed in, PM2.5

permanently lodges in lung tissue and causes lung damage and respiratory problems. The fine particles can cross from the lung into the blood stream resulting in

inflammation of the cardiac system, a root cause of cardiac disease including heart

attack and stroke leading to premature death. PM2.5 exposure is also linked to low

birth weight, premature birth, chronic airway obstruction, and sudden infant death.

In addition to these negative health impacts, fine particulate matter is the primary

cause of reduced visibility. New Castle County’s air quality does not meet the standards for PM2.5, and Kent and Sussex Counties are not much below the standard

(currently monitoring about 15 percent). Health studies for fine particles have consistently shown that this pollutant is at the top of the list of concern to health and

we understand that EPA’s review of the standard, as mandated by the Clean Air

Act is suggesting that the existing standard, only finalized in 1997, is not likely to

adequately protect public health and should be tightened. This means that we may

need to cut emissions even more than we are currently contemplating in order to

provide healthful air to our citizens. All activities that we undertake under the

standard as it now exists will help us with attainment of a future standard, whenever it is adopted. This work keeps us on the glide path to timely attainment.

Here again we support the adherence to good science. A compounding effect is

that the finer particles attract and retain toxic material much more efficiently than

larger particles. At one time, air pollution control was done by controlling ‘‘total particulates’’, even though scientists have long known that particulates are not all created equal in terms of their ability to reach deep into lungs. Scientists have found

that the standard for PM10 (particulate material with a median diameter of 10 microns or less is not adequately protective of public health. The reason appears to

be that the finer particles are inhaled readily into the lungs and essentially are

never eliminated (exhaled or brought up by cilia with phlegm). In fact, I serve personally as one of the guinea pigs in graduate school in the laboratory of David Swift

who was studying this phenomenon. In the 1980’s, we pursued control of particulates smaller than 10 microns. Now we know that particulates smaller than 2.5 microns are the most harmful, not only because of the physical ability to reach and

lodge deep into lungs, but also because of the ability to behave partly as a fume

and partly as a particle and ability to adsorb toxics.

We understand there is some concern with the prospect of adopting a new scientific standard for human health protection, when the implementation of the previous health standard has barely begun. For environmental engineers and scientists,

however, this ‘‘pipeline of standards and implementation is part of the normal process of careful development of programs to protect human health, and of the perils
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8Proposed Rule To Implement the Fine Particle National Ambient Air Quality Standards; Proposed Rule 70 Fed. Reg. (210) 65984–66067, November 1, 2005. 9 JAMA study Pope CA 3rd, Burnett RT, Thun MJ, et al., ‘‘Lung cancer, cardiopulmonary mortality, and long-term exposure to fine particulate air pollution,’’ Journal of the American Medical

Association (JAMA), 2002;287:1132–1141; Brook RD, Brook JR, Urch B, et al. Inhalation of fine

particulate air pollution and ozone causes acute arterial vasoconstriction in healthy adults. Circulation. 2002;105:1534–1536; and Ozone and Short-term Mortality in 95 U.S. Urban Communities Bell, M.L., et al. (2004). JAMA 292, p. 2372–2378.

of litigation that affect these programs. Accordingly, we believe that the new PM2.5

should be adopted with all due alacrity so that the public benefits can be realized

through detailed implementation.

We fully realize there is a substantial cost to complying with the air pollution control requirements necessary to meet these new standards. We also realize there is

a cost to not complying with these standards. These costs are the often ignored benefits of attaining healthful air quality. We realize the real benefits of controlling

PM2.5 pollution is difficult to quantify and that estimates vary significantly from

local epidemiological estimates on one end of the spectrum to the John Locke institute on the other end. We refer you to EPA’s estimate of the health benefits, described in the recent implementation rule for fine particulates8, which, of course

could not be published without approval by the White House Office of Management

and Budget’s Office of Information and Regulatory Affairs:

‘‘. . . the effects of PM2.5 on public health are serious. Estimates suggest that

each year tens of thousands of people die prematurely from exposure to PM2.5,

and many hundreds of thousands more people experience significant respiratory

or cardiovascular effects. Even small reductions in PM2.5 levels may have substantial health benefits on a population level . . . EPA has estimated that the

monetized health benefits of reducing emissions of pollutants that lead to PM2.5

formation exceed the costs by 3 to over 30 times.’’

And the evidence of serious health problems from particulates continues to mount

a recent survey of data from 90 urban areas.9 Again, we do not suggest cost be ignored, but strongly urge that the benefits be weighed as well.

D. CAIR: A GOOD START ON A NATIONAL GOOD NEIGHBOR POLICY

The Clean Air Interstate Rule (CAIR) addresses the age-old problem long known

to those of us in the dismal science of air pollution—the wind obeys no State boundaries. Commerce may or may not be interstate requiring a Federal role, but air pollution cries out for a Federal role of an intestate activity—air pollution.

All States, in cooperation with the EPA, have made significant strides in improving the quality of the air, and made equal strides in understanding what forms of

control offer the most effective path to success, both from ease of implementation

and from an economic view. We have managed to improve air quality by reducing

emissions while enjoying increases in GDP and experiencing significant growth in

vehicle miles traveled. Since 1970, we have cut emissions that cause soot, smog and

acid rain by more than half, even while our Nation’s economy has grown by 187 percent—clear evidence that a growing economy and environmental results can, in fact,

go hand-in-hand. (Administrator Johnson’s speech on August 4, 2005 at Adirondack

Council 30th Anniversary, Essex, NY) We need to continue this pattern and bring

about healthful air to our citizens as expeditiously as possible.

However, we know more needs to be done. The understanding of the problem

brings with it the double-edged sword or recognition of the extent of the problem.

Attainment of NAAQS is clearly more vexing than we thought when the earlier

Clean Air Acts were passed. Even with the 1990 Amendments, which we hoped

would address the ozone problem. Despite concerted effort, the problem persists. We

need, and fervently ask for your support to allow us to properly regulate major

sources, and most importantly, those sources that are causing our population the

most harm. Some issues like intestate transport require a strong Federal role while

a variety of individual solutions are more appropriately tailored by States. We have

taken action of oil tanker lightering because it is significant source of VOC pollution. We know that some States like Missouri, are legally restricted from controlling

pollution more stringently than the Federal Government, and so chronic problems

like lead deposition form smelter persists because of EPA inaction on a problem that

is restricted to few States. Surely, this is not the time to consider extending attainment deadlines, or hobble States ability to take action. Already action on these

standards has been delayed by litigation, that neither cleared the air for better

science or law nor for people’s health.
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The CAA established a clear path to ameliorate these problems. The Act provides

the States with the mechanism to accomplish this task by identifying the culprit

areas and making sound estimates of the sources within the areas most likely to

be causing the problem. Areas experiencing nonattainment have 3 years to develop

State Implementation Plans (SIPS), with the fine particulate matter SIP due in

April 2008, and the ozone SIP due in June 2007. The preparation and adoption of

past SIPs by each State containing a nonattainment area are grueling tasks, but

with very limited exceptions, and only in extraordinary circumstances, have these

SIPs not been submitted by the appointed date. A combination of detailed information on the amount of air pollution entering the State, plus information on the

amount of pollution generated internally, constitute the cornerstone of the SIP preparation. Knowing how serious the pollution problem is, and what is causing the

problem, States can perform complex modeling to determine how much reductions

in emissions are necessary to result in an attainment condition. Selection of measures to effect that reduction in emissions, whether locally or regionally, is the final

major step in the process. When regional emissions are the major contributor, regional solutions must be developed. One example of this activity is the exemplary

work accomplished by the Northeast Ozone Transport Commission (OTC), including

all States from Maine to Virginia, working together for a common cause. Using the

mechanisms of MOUs and Resolutions, members of the OTC work together to develop control measures that benefit wide areas and not strictly one State.

It is EPA’s responsibility and authority to move the preparation of SIPs as expeditiously as possible, and provide adequate support by developing guidance documents, in a timely manner, which states can use to move forward with their work

on the SIPs. This mandate, as clearly defined in the Clean Air Act, forms the backbone for the important relationship between the Federal, State and local governments, and allows the entire process to move forward effectively and efficiently. According to the recently proposed fine particle standard implementation Rule, it is

the clear responsibility for the Federal Government to promulgate rules on utilities

and other large sources, mobile sources, ports, rail operations and others, that

produce a universally positive impact on reducing emissions. Subsequent to that activity, and depending on how severe a nonattainment condition remains, State and

local areas must fill in the gap with more localized measures that are not preempted by Federal authority.

EPA has taken a universally effective first step with the adoption of the CAIR

rule. Unfortunately, it is only a first step. We believe EPA has the authority and

a responsibility to do much more. Modeling performed by both State and regional

entities have determined that the results not only fall short of producing the needed

emission reductions but also are timed in such a manner that little assistance will

be gleaned from these actions in time to attain by the required, and I might note,

very reasonable schedule, mandated by the Clean Air Act. While EPA has taken an

important first step to address transport, we are still concerned that the agency has

not done enough. CAIR leaves over 9 million citizens in the North East alone with

unhealthy air after its implementation. But even with the most stringent controls

we have tested thus far, more than two million citizens remain experiencing

unhealthy air. We believe the compliance deadlines are too long, the emissions caps

are too weak, and an insufficient number of sources are covered. Additionally, we

are troubled that EPA is intending to weaken an important regulatory tool under

Section 126 of the Clean Air Act for addressing interstate transport. Now that regions and States recognize the shortcomings of CAIR, work is underway to fill those

gaps. The tools necessary to accomplish these objectives must not be taken away

from the States. Actions such as preemption of State authority on small engine controls, accomplished by legislated activity and prevention of State’s ability to adopt

mobile source rules identical to those of California, severely hamper a State’s ability

to do it’s job. Very simply put, if a State is able to pas muster through its normal

adoption process, which is both very open and rigorous, there is no reason to prevent a State from doing so.

For example, the northeast and mid-Atlantic States, under the auspices of the

OTC, are currently developing a CAIR plus strategy which will result in considerably more emission reductions, from the most appropriate geographical locations, to

make a substantial improvement on the original CAIR Rule. The kinds of improvements on the original CAIR framework include nonroad emission control and fuel

requirements, and the tightening of the existing controls on stationary sources. Another example of measures directed to improve upon the CAIR framework are being

accomplished under the auspices of other regional organizations in the Midwest and

the Southeast.

We fully realize there is a substantial cost to complying with the air pollution control requirements necessary to meet these standards. We also realize there is cost
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to not complying with these standards. These costs are the often ignored benefits

of attaining healthful air quality.

At this point in time, our largest and overarching concern is that the Federal Government should refrain from interfering with our ability to adopt more stringent

controls than those already promulgated. These measures are ones which we feel

can most efficiently and cost-effectively fill the gap between the benefits of CAIR,

which again, we concur are substantial, and that amount of reductions in emissions

necessary to result in widespread attainment. There have been too many instances

when opportunities have been lost when apparently artificial limits have been

placed on measures which would affect substantial positive impacts on the wide

field of emission reduction possibilities. We ask that you allow the States to do the

necessary evaluation and take whatever actions necessary to reach attainment, and

not extend timelines and remove any existing authorities that States now have.

Finally, on this day before Veterans Day, I would be remiss if I did not acknowledge the contribution of our men and women of the armed Force who have contributed to our understanding of the science of fine particles and human health. The

U.S. Army supported the laboratory of the Dr. David Swift at The Johns Hopkins

University, and much of the work at the Inhalation Toxicology Research Laboratory

at the Sandia National Laboratory in Albuquerque, New Mexico. Without this critical contribution by this military-sponsored research, our appreciation of the role of

fine particles in human health would not be great as it is today. God bless our men

and women of the Armed Forces and all their contributions to the people of the

United States and people who yearn to breath free everywhere.

Thank you for the opportunity to present these views. I would be happy to answer

your questions.
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STATEMENT OF STEPHEN MORET, PRESIDENT AND CEO, BATON ROUGE AREA

CHAMBER OF COMMERCE

INTRODUCTION

The Baton Rouge Area Chamber is made up of over 1,500 businesses in the Baton

Rouge metropolitan area. Our membership is comprised of large and small businesses that are as varied as the people in our community. As the voice of the Baton

Rouge area business community, the Chamber strives to foster economic and community development so that one overriding goal will be met: the Baton Rouge area

will be a better place for the people who live and work there.

Unfortunately, as we have tried to grow our community in positive ways, the

Chamber, the people, and the businesses in our community have been required to

devote substantial time and resources (that otherwise could have been spent on

positive steps forward) to make sure that the mechanistic application of the Clean

Air Act (‘‘CAA’’) did not cause greater problems than the ones the act was designed

to solve. Cleaner air is an important part of our goal. However, the CAA must incorporate the flexibility necessary to allow our area to use its resources to achieve real

progress rather than diverting resources to unnecessary activities that do not advance the goal of improved air quality.

Following the CAA Amendments of 1990, the Baton Rouge area was classified as

‘‘serious’’ nonattainment with the 1-hour National Ambient Air Quality Standard for

ozone. Over the last 15 years, the Baton Rouge area community, including the Louisiana Department of Environmental Quality (LDEQ), has worked diligently to

achieve attainment. We have followed the strict mandates of the CAA. We have enacted laws and regulations designed to reduce air emissions of ozone forming pollutants, nitrogen oxides (NOx) and volatile organic compounds (VOC). We have submitted plans and emission budgets to EPA. We have installed expensive control

equipment to reduce NOx and VOC. We have instituted vehicle inspection programs, raised fees, and performed transportation studies. We have modeled emissions from industry sources, large and small, on-road and off-road vehicles, and biogenic sources (i.e., trees), and modeled the fate and transport of those emissions. In

short, the Baton Rouge area has done everything that the CAA and the EPA required and/or suggested. As a result, tremendous emission reductions have been

achieved as illustrated in the following chart.
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Unfortunately, although the Baton Rouge area came within 1–2 parts per billion

(‘‘ppb’’) of achieving attainment in 1999 and again in 2004, the rote application of

the CAA forced us to divert attention and resources away from achieving attainment

to fighting the potentially ruinous actions/penalties mandated by the CAA.

Under the CAA, every nonattainment area of similar classification is treated exactly the same way. The Baton Rouge area provides a perfect example of the inequities associated with the application of the CAA. Most ‘‘serious’’ and ‘‘severe’’ ozone

nonattainment areas have a large number of industrial emitters and/or a large fleet

of vehicles. Our area does not fit this mold. Although Baton Rouge area industry

does produce its share of NOx and VOC emissions, our community has a very small

fleet of vehicles and those vehicles are fairly new, lower emitting models. Industry

has reduced emissions, both voluntarily and through regulation, such that it is difficult to find additional reductions in significant amounts. In fact, industry is not

the main source of VOC emissions in Baton Rouge; biogenic sources are actually the

highest producers of VOC in the area. Baton Rouge also is not experiencing the

slow, steady ozone rise that peaks with a summer afternoon exceedance. Instead,

on the infrequent occurrence when there is an exceedance, Baton Rouge now experiences short duration, sharp spikes in ozone production, attributable to highly reactive VOCs reacting with the available NOx. The CAA rules are designed to address

the former, but not the latter. Although well intentioned and helpful in many areas,

the blind application of CAA statutory mandates and the ‘one-size-fits-all’ approach

does not provide the flexibility and innovation needed to solve Baton Rouge’s ozone

problem.

In the wake of Hurricanes Katrina and Rita, the Baton Rouge area has taken on

a large, permanent increase in population. While we readily have opened up our

hearts and homes to our displaced neighbors from the New Orleans region, this influx of population creates new air quality challenges for us as it will result in increased numbers of houses, offices, and cars in the Baton Rouge area. Moreover, our

State faces unprecedented challenges that we cannot adequately address without an

unprecedented response from Congress. We deeply appreciate your efforts to help

rebuild South Louisiana and pray that you will make good on President Bush’s

promise in Jackson Square to rebuild the Gulf Region better than it was before. The

future of our entire State depends on a strong—and swift—Federal response.

At this time, I would like to provide some information about Baton Rouge’s nonattainment history, its fight against reformulated gasoline (RFG), and the litigation

it has been forced to participate in to protect its interests.

HISTORY OF BR OZONE

The Baton Rouge area’s original ozone classification in 1991 of ‘‘Serious’’ was

based on a design value that was within 5 percent of the ‘Moderate’ ozone classification. Over the years, Baton Rouge instituted all of the controls required by law, following EPA’s guidance and modeling. The focus of those initial efforts was VOC reductions, which over time were realized.

When it became apparent that the biogenic component of Baton Rouge’s emissions

was so large that further anthropogenic VOC reductions would have little impact,

a NOx strategy was adopted. In other words, the Baton Rouge area had reduced

VOC as much as possible. After spending hundreds of millions of dollars to reduce

VOC, we learned that was not good enough. EPA-approved studies showed that the

Baton Rouge area’s ozone levels were strongly sensitive to NOx but not to VOC. In

late 2001, the Baton Rouge area implemented a 30 percent across-the-board reduction in major point source NOx emissions, effective as soon as possible but no later

than May 2005. The current NOx strategy offers the Baton Rouge area an opportunity for achieving attainment.

The Baton Rouge area has seen a steady and substantial downward trend in its

ozone design value. By its 1999 attainment date under the 1-hour standard, Baton

Rouge was only 2 ppb from attainment, down from about 40 ppb over attainment

in 1991. This contrasts with many other nonattainment areas that showed little improvement or even degradation. Although the Baton Rouge area did not attain the

1-hour standard, it had improved to the point that, according to the classifications

under the CAA, the area was at ‘‘Marginal’’ status. Unfortunately, because of the

strict requirements of the CAA, Baton Rouge was slated to be reclassified as ‘‘Severe,’’ like Houston.

At this point, EPA did work with our community. EPA’s models showed that

ozone was transported from the Houston/Galveston and Beaumont areas in sufficient amounts that Baton Rouge’s own ozone levels were raised by 2–6 ppb, an

amount EPA itself termed ‘significant’ and in fact an amount large enough to have

prevented attainment. As a ‘downwind’ area, Baton Rouge qualified for, and EPA
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granted, an extension of its attainment date under a nationwide EPA policy. But

that policy was struck down by the Fifth Circuit because it was not literally provided for in the CAA.

Judicial decisions interpreting the CAA ‘‘bump-up’’ provision finally forced EPA to

reclassify Baton Rouge from ‘Serious’ to ‘Severe’ and withdraw its attainment date

extension. Despite the fact that Baton Rouge area was only 2 ppb from attainment

and would be classified as ‘Marginal’ under the 1-hour standard, the CAA dictated

that Baton Rouge be classified as ‘Severe.’

Based on its re-classification to ‘Severe’ after the bump-up, new, very strict requirements were to be applied to Baton Rouge. The mandate to implement RFG,

Section 185 or ‘penalty’ fees, and a reduced major source threshold were a few of

the new requirements imposed on Baton Rouge under the CAA. The new requirements under the ‘Severe’ standard were projected to cost hundreds of millions of dollars in direct and indirect costs. The economy of the Baton Rouge area was on the

brink of a major disruption.

Against this backdrop, two significant events occurred. First, a coalition of Baton

Rouge interests joined together to resist the RFG mandate. Second, EPA issued the

8-hour Ozone Implementation Rule. Each of these events will be discussed.

RFG

As the June 23, 2004 deadline for the implementation of RFG in Baton Rouge

loomed nearer, it became increasingly apparent that RFG—while successful in areas

with large fleets of vehicles—was not a good idea due to the enormous negative impacts it would have on our community. First, it would interfere with attainment because it is designed to decrease VOC emissions, but it actually causes an increase

in NOx emissions—the opposite result than what is needed in the Baton Rouge

area. Second, it would cause health problems due to increasing rather than decreasing the ozone forming potential of the area. Third, it would create huge economic

hardships.

RFG was documented by EPA’s approved models (MOBILE6 and MOBILE6.2) to

cause NOx increases from on-road vehicles in Baton Rouge. Studies from around the

country further documented this fact. When NOx emissions from RFG-fueled offroad vehicles (a significant component of the Baton Rouge inventory) were added,

there was a clear ‘‘disbenefit’’ from NOx increases of about 400 tons per year. In

other words, RFG use in Baton Rouge would have caused NOx emissions to increase

by at least 400 tons. A correlation between RFG and poor vehicle Inspection and

Maintenance performance also was documented. The ‘‘disbenefits’’ clearly created

substantial challenges with the current EPA-approved ozone control strategy, which

relies on NOx decreases.

Further, ethanol-based RFG, which was to be used in Baton Rouge, increased

NOx emissions even more than standard RFG, adding to the interference with

achieving attainment. Ethanol-based RFG was also proven to increase certain air

toxics and VOC emissions through evaporative losses (permeation) and commingling.

RFG in the Baton Rouge area also would have increased health problems associated with ozone. As VOC and NOx are increased, ozone levels are more likely to

increase, thus increasing the very health problems the CAA is designed to minimize.

The imposition of RFG in Baton Rouge also would have produced severe economic

hardship. A respected LSU Professor of Economics, Dr. Loren Scott, conducted a

study in which he found that the economic impacts would be catastrophic. Gas

prices were estimated to increase by 10–15 cents per gallon. Approximately 1,000

jobs and tens of millions of dollars in household income were to be lost. The oil marketers would have to retrofit their tanks to meet the UST compatibility requirements for ethanol-based fuel. Dr. Scott’s economic model estimated that the cost to

Baton Rouge in increased gas prices, lost earnings, and lost sales would be approximately $150 million. Moreover, due to the small size of the 5-parish (county) area,

and the ease of gasoline purchases out of the area, many small retailers on the

edges of the area would have been put out of business.

There was and is a clear alternative to RFG which was applicable in Baton Rouge.

The new Tier 2-low sulfur gasoline has been shown to significantly reduce NOx

emissions. Thus, there was no need to implement RFG in Baton Rouge, with its associated ‘‘disbenefit’’ and economic hardship, when a suitable alternative existed

that provided as much or greater environmental benefit was soon to go into effect.

This low sulfur gasoline was being phased in across the country, including Louisiana, in 2004, with full implementation in 2005. EPA’s own rulemaking for Tier

2 gasoline used models to project that the Baton Rouge area would achieve attainment with the ozone standard through its use. This rulemaking even relied upon
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that fact as economic justification for the rule. The Tier 2 rulemaking did not in

any way ever consider that RFG would be required instead of Tier 2 fuel in Baton

Rouge. However, although EPA explicitly relied on use of Tier 2 fuel in Louisiana

as a justification to pass the rule, the CAA seems to completely preclude a State

or region from considering these nationwide fuel improvement programs as an ozone

attainment measure. Instead, the Baton Rouge area is forced to use RFG by a completely separate fuel provision in the Act.

The CAA, as written, seemed to offer EPA no flexibility. Having had its transport

policy overturned, EPA was understandably reluctant to go out on a limb for Baton

Rouge. While EPA expressed concern regarding the evidence presented by Baton

Rouge, it felt constrained by the wording of the CAA itself.

The Chamber decided to take the initiative, filing a request in the U.S. Fifth Circuit for a review of EPA’s decision regarding the use of RFG in Baton Rouge and

requesting a stay of the RFG mandate. All of the evidence noted above was placed

before the court. On June 18, 2004, just a few days prior to the deadline for implementing RFG, the Fifth Circuit granted the Chamber’s request for a stay. EPA

agreed to review the use of RFG and agreed to keep the stay in effect while it conducts that review. However, it is important to note that the existence of the judicial

proceedings was the only avenue available to EPA, under the CAA, to review the

use of RFG in Baton Rouge. Without the litigation over RFG, EPA would not have

been able to fashion a remedy for the Baton Rouge area under the wording of the

CAA.

THE 8-HOUR IMPLEMENTATION RULE

When EPA issued the new Implementation Rule for the ozone 8-hour standard in

2004, the Baton Rouge area missed attainment with the new standard by a mere

1 ppb. It was therefore classified under the new, more stringent and protective 8-

hour standard as ‘Marginal.’

The issuance of the Phase I Implementation Rule provided some benefits for the

Baton Rouge area. First, it revoked the old 1-hour standard. Second, a new attainment date of June 15, 2007 was established for compliance with the 8-hour standard

for marginal areas. Third, the major source threshold for New Source Review was

raised from 25 tons per year (applicable to ‘Severe’ areas) to 100 tons per year.

Fourth, on the effective date of the revocation of the 1-hour standard (June 15,

2005), areas that were once classified as ‘Severe’ under the 1-hour standard were

not obligated to impose penalty fees for continued failure to attain. However, the

Implementation Rule does provide one ‘disbenefit’ to Baton Rouge. Under its socalled ‘anti-backsliding’ provisions, many of the ‘Severe’ requirements that applied

to the Baton Rouge area would still have to be implemented, even though our community was properly classified as ‘Marginal’ under the 8-hour standard.

Review of the Implementation Rule was sought by a diverse group of petitioners,

including the Chamber. Eventually, all petitions were consolidated in the District

of Columbia Circuit where such entities as the South Coast Air Quality District

(Southern California), the Louisiana Environmental Action Network, the States of

Ohio and Georgia (on behalf of the City of Atlanta), various environmental groups,

various industry groups, and certain northern States are all joined together with the

Chamber, asserting differing positions on many aspects of the Implementation Rule.

The Chamber has two basic positions in the current litigation.

First, the Phase I Implementation Rule in its current form is important to the

Baton Rouge area and must be upheld and protected from the attacks of the Environmental Petitioners. The Environmental Petitioners strenuously contest portions

of the rule and will continue to do so. They will advance their arguments in the

court and request that the court overturn the Phase I Implementation Rule. If that

occurs, the old 1-hour standard may not be revoked, penalty fees may again be applicable for failure to attain the 1-hour standard, and the major source threshold

may be returned to ‘Severe’ levels. Such a result would gravely impact the Baton

Rouge area. LDEQ has stated in its Fiscal and Economic Impact that penalty fees

would result in an $85 million increase in fees, the possible shut down of facilities,

and a negative effect on competition between companies in the Baton Rouge nonattainment area and those on the outside of the area that do not have to pay the

penalty fee. A lower major source threshold would cause increased difficulty for

sources to modify existing permits, require smaller sources to install tougher control

equipment, and require many small industrial sources to obtain Title V major

source permits. It is doubtful whether this result will actually assist the Baton

Rouge area in solving its ozone problem, and such efforts are not needed as other

measures enacted by both the State and EPA will address our ozone issues. For example, LDEQ is targeting specific voluntary HRVOC reduction measures that be-
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came effective through agreements with 16 large sources in May 2005 and has extended NOx reduction measures to certain attainment parishes surrounding the

nonattainment area. Neither of these measures is prescribed by the CAA, yet they

are projected to be effective for our area. Further, EPA has several new programs

that will substantially affect ozone. Two examples: (1) In 2006 and 2007 EPA’s new

clean diesel fuel requirements will take effect and are projected to reduce NOx and

PM10 emissions by substantial levels; and (2) powerplants in Louisiana are required

to reduce NOx emissions by approximately 50 percent on a statewide aggregate

basis under the Clean Air Interstate Rule.

Prior to Hurricanes Katrina and Rita, we had identified the imposition of the penalties associated with a ‘‘Severe’’ classification under the now defunct 1-hour standard as the greatest short-term economic threat facing the Baton Rouge area: taking

into account increased fees, likely facility closures, and foregone economic development opportunities, we estimate that our regional economy would sustain a negative

economic drain of roughly $300-$500 million per year for the foreseeable future.

This obviously would have a hugely detrimental impact on the businesses and families of the Baton Rouge area.

Our second position is that the EPA has no legal authority to require that an area

retain or implement requirements that are beyond the requirements of its 8-hour

classification. Requirements that were applicable based on its old classification

under the 1-hour standard, i.e., the ‘anti-backsliding’ provisions, are beyond EPA’s

statutory authority to implement and are not a reasonable interpretation of the

Clean Air Act.

The Chamber is forced to assert Baton Rouge’s interests in the litigation to ensure

that the beneficial aspects of the Implementation Rule are upheld. Although ‘‘Marginal’’ under the 8-hour standard, the Baton Rouge area over the years implemented

requirements mandated by the CAA for ‘Serious’ areas when it was a ‘‘Serious’ area

under the 1-hour standard. Substantial and continuing reductions of ozone in the

region have been achieved. Despite this, many petitioners actually seek the imposition of penalty fees and lower major source thresholds. Unless the Implementation

Rule is upheld, the Baton Rouge area will again be faced with the more draconian

aspects of the CAA, which will again be applied to it in a mechanistic or rote fashion, without the possibility of exception and without real benefit to air quality in

our community.

CONCLUSION

As can be seen from our community’s history, flexibility is not a hallmark of the

CAA. The Chamber understands that the CAA was amended in 1990 to limit EPA’s

discretion to a certain degree. The addition of certain CAA Subpart 2 provisions

specifying the exact programs that apply in a given classification is one example.

RFG is another. Unfortunately, stringent provisions, however well-meaning and designed to enhance the quality of the air we breathe, when enacted without exception

or with exceptions that are too narrowly drawn and difficult to meet, can lead to

results that may end up harming the environment and/or the economy. This seems

especially harsh when attainment just barely eludes a community, such as the

Baton Rouge area, that has faithfully followed the law and EPA guidance over the

years.

STATEMENT OF JOSEPH P. KONCELIK, DIRECTOR, OHIO ENVIRONMENTAL

PROTECTION AGENCY

Senator Voinovich, Senator Carper, members of the subcommittee, I am Joe

Koncelik, director of the Ohio Environmental Protection Agency, thank you for allowing me to address this important issue regarding the States ability to meet the

new 8-hour ozone standard. U.S. EPA’s implementation rule for the 8-hour ozone

standard has dramatic repercussions for the States. Ohio believes that the current

Federal approach to improving air quality lacks coherency. The federally mandated

air pollution control programs are on much longer implementation schedules than

the deadlines established by U.S. EPA for States to meet the 8-hour ozone standard.

A better balance needs to be struck.

On June 15, 2004, U.S. EPA finalized the 8-hour ozone implementation rule. The

rule establishes firm deadlines for all of the counties within the States to meet the

new, more stringent, 8-hour ozone standard. In all, Ohio has 33 counties that don’t

meet this standard. By June 2007, Ohio EPA must finalize air pollution control

plans that will demonstrate reductions in air emissions enough so as to bring all

33 counties into attainment with the standard.
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U.S. EPA has classified all of the nonattainment counties based on air monitoring

data. The higher the readings of ozone above the standard the higher classification

that county will receive. The classifications from lowest to highest are: basic, moderate, serious, severe and extreme. Most nonattainment areas in the country are

designated basic nonattainment. In Ohio, only Northeast Ohio (a total of 8 counties)

was classified as moderate nonattainment.

Under this classification scheme, the higher the classification, the more time U.S.

EPA gives to meet the standard. Areas classified as basic nonattainment have until

2009 to demonstrate attainment with the new standard. Areas classified as moderate nonattainment have until 2010 to demonstrate attainment.

However, there is a trade off for getting more time; higher nonattainment classifications are accompanied with more stringent federally mandated control programs.

In addition, areas with higher classifications have more limits placed on economic

growth.

From the day U.S. EPA issued the final implementation rule, Ohio has been concerned with the method used by U.S. EPA to establish the deadlines for the various

classifications to meet the 8-hour standard. Despite the fact that the 8-hour standard is far more stringent than the previous 1-hour ozone standard, U.S. EPA gave

areas exactly the same amount of time to comply with the new standard. For example, moderate nonattainment areas had 6 years to comply with the 1-hour ozone

standard and are given 6 years to comply with the 8-hour standard.

Ohio’s concerns grew once it reviewed the logic behind establishing the deadlines

for the 8-hour standard. The 1-hour ozone standard deadlines were established by

Congress. In setting the deadlines, Congress engaged in a thoughtful process to determine reasonable, appropriate timeframes. Congress concluded that the amount of

time required for attainment depends on the available controls and the time it takes

to add these controls to existing sources. The congressional record is replete with

testimony regarding science and available technology to meet the 1-hour ozone

standard. Even though it engaged in this thoughtful process, many areas still were

unable to meet the 1-hour standard within the deadlines established despite best

efforts to comply.

In developing the compliance schedule for the new 8-hour ozone standard, U.S.

EPA ignored the thoughtful process Congress used to establish timeframes. Instead,

U.S. EPA used the 1-hour timeframes for the new, stricter 8-hour standard. U.S.

EPA failed to consider any new evidence regarding the feasibility of meeting the

new 8-hour standard. The result, U.S. EPA established unrealistic deadlines for

large regions of the country.

Despite the concerns with the methods used to establish the 8-hour compliance

schedule, Ohio EPA has been working very hard to determine exactly what new air

pollution controls will be required to put all of its counties into attainment with the

8-hour ozone standard. For basic nonattainment areas, Ohio EPA believes a reasonable level of new controls will be needed to reach attainment by 2009. The enormous

challenge lies in moderate nonattainment areas, like Northeast Ohio. Right now,

there is no viable air pollution control plan that would place Cleveland and the rest

of Northeast Ohio into attainment by 2010. The failure to meet the current Federal

deadline will have dramatic repercussions on economic growth in the Cleveland

area, an area already facing significant challenges in its economy.

To demonstrate the impossibility of the task of meeting the standard in Northeast

Ohio, we have performed studies that show that even if all of industry was shut

down and the area depopulated, it would just barely be able to meet the standard

by 2010, the applicable deadline under the Federal rule. However, those same studies show that Northeast Ohio could attain the new standard by 2015 using almost

exclusively existing local and Federal control programs.

Why does the picture change so dramatically in such a relatively short period of

time? The reason is that U.S. EPA has implemented effective regional air pollution

control programs that will dramatically improve air quality. However, the mandated

reductions will not occur fast enough to benefit areas like Northeast Ohio. These

new Federal programs include controls on utilities (CAIR rule) and motor vehicles

(clean fuels and new engine standards). U.S. EPA’s studies of the effectiveness of

these controls show they will be highly effective in helping States meet the new

ozone standard. A critically important reason why the Federal programs are so effective is that they mandate reductions on a regional basis. Regional control programs have been shown to be the most effective means of improving air quality in

order to meet the 8-hour standard. Alternatively, local control programs on industry

and vehicles are shown to be very limited in their effectiveness to reduce 8-hour

ozone levels. As a consequence, the most effective tools in improving air quality lie

with the Federal Government, not the States.
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Although U.S. EPA has the most effective tools, it has placed the States in an

impossible situation of mandating compliance with the standard much faster than

its control program will achieve reductions. All of the Federal programs that reduce

emissions from motor vehicles rely on turnover of the existing fleet of cars and

trucks to gain those emission reductions. For example, emissions from diesel engines are predicted to be reduced by 80 percent from 2000 levels. However, that

level of reduction will not be occur until 2030 because they are tied to turnover of

the fleet. A similar time period is at issue with the Federal plan to control utility

emissions. Emissions from powerplants are projected to be reduced by 70 percent

from 2003 levels. However, those reductions will not be achieved until after 2015

due to the phased-in approach contemplated under the rules.

Ohio EPA understands and supports the need to balance the economic costs of

these reductions by phasing them in over time. However, U.S. EPA failed to take

into account the need for balance when it established the deadlines for meeting the

ozone standard. While the emission reductions mandated by U.S. EPA for utilities

and vehicles are on a 10- to 25-year schedule, the States must meet the new standard in most areas no later than 2010, 5 years from now.

The Federal air pollution programs for vehicles and utilities will account for major

reductions and will aid the States in complying with the 8-hour ozone standard. But

because of the short deadlines established by U.S. EPA for States to reach the 8-

hour ozone standard, the benefits of those reductions will be too late to avoid mandatory local controls that will, by comparison, do little to reduce ozone. The reductions will also be too late for areas like Northeast Ohio to avoid Federal sanctions

for failing to meet its designated deadline for compliance. These sanctions and mandated local controls will have significant and unnecessary consequences on Northeast Ohio’s economy.

So what is the appropriate solution? EPA should have adjusted the attainment

dates so States can take full advantage of these Federal programs. All nonattainment areas are not faced with the same dilemma. Most basic areas have a realistic

and fair chance of meeting their 2009 deadline. But most moderate nonattainment

areas have no chance of meeting their 2010 deadline. Ohio EPA believes these areas

should be provided relief. We are not advocating for doing nothing more to improve

air quality in these areas, but rather an appropriate balance be struck between the

length of time provided to comply and a reasonable number of new cost effective

pollution control programs that will help accelerate compliance.

I would like to thank Senator Voinovich for holding this hearing on such a critically important issue to the States. Ohio stands ready and willing to engage in discussion that would lead to a practical solution that strikes the right balance between improved air quality and the economic costs of compliance.

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