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66–512 PDF 2011

EPA’S GREENHOUSE GAS REGULATIONS AND 

THEIR EFFECT ON AMERICAN JOBS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON ENERGY AND POWER 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

MARCH 1, 2011 

Serial No. 112–12 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

JOE BARTON, Texas 

Chairman Emeritus 

CLIFF STEARNS, Florida 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO MACK, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

SUE WILKINS MYRICK, North Carolina 

Vice Chair 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

BRIAN P. BILBRAY, California 

CHARLES F. BASS, New Hampshire 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BILL CASSIDY, Louisiana 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

CORY GARDNER, Colorado 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

HENRY A. WAXMAN, California 

Ranking Member 

JOHN D. DINGELL, Michigan 

EDWARD J. MARKEY, Massachusetts 

EDOLPHUS TOWNS, New York 

FRANK PALLONE, JR., New Jersey 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

CHARLES A. GONZALEZ, Texas 

JAY INSLEE, Washington 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

ANTHONY D. WEINER, New York 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

JOHN BARROW, Georgia 

DORIS O. MATSUI, California 

DONNA M. CHRISTENSEN, Virgin Islands 

(II) 

(III) 

SUBCOMMITTEE ON ENERGY AND POWER

ED WHITFIELD, Kentucky 

Chairman 

JOHN SULLIVAN, Oklahoma 

Vice Chairman 

JOHN SHIMKUS, Illinois 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MICHAEL C. BURGESS, Texas 

BRIAN P. BILBRAY, California 

STEVE SCALISE, Louisiana 

CATHY MCMORRIS RODGERS, Washington 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

CORY GARDNER, Colorado 

MIKE POMPEO, Kansas 

H. MORGAN GRIFFITH, Virginia 

JOE BARTON, Texas 

FRED UPTON, Michigan (ex officio) 

BOBBY L. RUSH, Illinois 

Ranking Member 

JAY INSLEE, Washington 

JIM MATHESON, Utah 

JOHN D. DINGELL, Michigan 

EDWARD J. MARKEY, Massachusetts 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

HENRY A. WAXMAN, California (ex officio) 

(V) 

C O N T E N T S 

Page 

Hon. Ed Whitfield, a Representative in Congress from the Commonwealth 

of Kentucky, opening statement ......................................................................... 1 

Prepared statement .......................................................................................... 3 

Hon. Bobby L. Rush, a Representative in Congress from the State of Illinois, 

opening statement ................................................................................................ 4 

Prepared statement .......................................................................................... 5 

Hon. Fred Upton, a Representative in Congress from the State of Michigan, 

opening statement ................................................................................................ 6 

Prepared statement .......................................................................................... 7 

Hon. Joe Barton, a Representative in Congress from the State of Texas, 

prepared statement .............................................................................................. 8 

Hon. Henry A. Waxman, a Representative in Congress from the State of 

California, opening statement ............................................................................. 9 

Hon. John D. Dingell, a Representative in Congress from the State of Michigan, prepared statement ...................................................................................... 143 

Hon. Cory Gardner, a Representative in Congress from the State of Colorado, 

prepared statement .............................................................................................. 145 

WITNESSES

Mike Carey, President, Ohio Coal Association ...................................................... 15 

Prepared statement .......................................................................................... 17 

Paul N. Cicio, President, Industrial Energy Consumers of America ................... 28 

Prepared statement .......................................................................................... 30 

Hugh A. Joyce, President, James River Air Conditioning Company, Inc. .......... 34 

Prepared statement .......................................................................................... 36 

Forrest McConnell, National Automobile Dealers Association, and President, 

McConnell Honda and Acura .............................................................................. 40 

Prepared statement .......................................................................................... 42 

W. David Montgomery, Vice President, Charles River Association ..................... 52 

Prepared statement .......................................................................................... 54 

Answers to submitted questions ...................................................................... 156 

Dan W. Reicher, Executive Director, Steyer-Taylor Center for Energy Policy 

and Finance, Stanford University; Professor, Stanford Law School; and 

Lecturer, Stanford Graduate School of Business ............................................... 80 

Prepared statement .......................................................................................... 83 

Gina A. McCarthy, Assistant Administrator, Office of Air and Radiation, 

United States Environmental Protection Agency .............................................. 119 

Prepared statement .......................................................................................... 122 

SUBMITTED MATERIAL

Letter of March 1, 2011, from Mr. Waxman to Mr. Whitfield ............................. 146 

Letter of January 10, 2011, from American Iron and Steel Institute to Hon. 

Darrell Issa ...........................................................................................................

(1) 

EPA’S GREENHOUSE GAS REGULATIONS AND 

THEIR EFFECT ON AMERICAN JOBS 

TUESDAY, MARCH 1, 2011 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON ENERGY AND POWER, COMMITTEE ON ENERGY AND COMMERCE, Washington, DC. 

The subcommittee met, pursuant to call, at 1:04 p.m., in room 

2322 of the Rayburn House Office Building, Hon. Ed Whitfield 

(chairman of the subcommittee) presiding. 

Members present: Representatives Whitfield, Shimkus, Walden, 

Terry, Burgess, Bilbray, Scalise, McMorris Rodgers, Olson, McKinley, Gardner, Pompeo, Griffith, Barton, Upton (ex officio), Rush, 

Inslee, Markey, Green, and Waxman (ex officio). 

Staff present: Gary Andres, Staff Director; Jim Barnette, General 

Counsel; Michael Beckerman, Deputy Staff Director; Sean Bonyun, 

Deputy Communications Director; Maryam Brown, Chief Counsel, 

Energy and Power; Cory Hicks, Policy Coordinator, Energy and 

Power; Ben Lieberman, Counsel, Energy and Power; Gib Mullan, 

Chief Counsel, CMT; Mary Neumayr, Counsel, Oversight/Energy; 

Katie Novaria, Legislative Clerk; Peter Spencer, Professional Staff 

Member, Oversight; Jeff Baran, Democratic Senior Counsel; Greg 

Dotson, Democratic Energy and Environment Staff Director; 

Caitlin Haberman, Democratic Policy Analyst; and Alexandra 

Teitz, Democratic Senior Counsel, Environment and Energy. 

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

Mr. WHITFIELD. I call this hearing to order this afternoon. Today’s hearing is entitled ‘‘EPA’s Greenhouse Gas Regulations and 

Their Effect on American Jobs.’’ 

Certainly, one of the major issues facing the American people 

today is getting the economy stimulated, creating jobs and one of 

the reasons all of us or at least many of us are very much concerned about the activities of the EPA at this particular time is 

that they have a queue of about 30 regulations that they are working on at EPA. We have great concerns about these regulations, 

recognizing that all of us are committed to protecting the environment but there is no question that many of these regulations are 

having a dramatic impact on job creation and I certainly recognize 

that there are different philosophies on the way we precede. 

The Obama Administration has placed great emphasis on green 

energy. As a matter of fact, our energy policy today has been simVerDate Nov 24 2008 12:08 Aug 10, 2011 Jkt 037690 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 P:\MY DOCS\HEARINGS 112\112-12 030111\112-12 CHRIS
2 

plified to the point where fossil fuel is bad and green energy is 

good. 

OK, thank you very much. I am sorry for the inconvenience 

there. For those who heard me, I am sorry you are going to have 

to listen to me again for a few minutes. 

Today’s hearing is entitled, ‘‘EPA’s Greenhouse Gas Regulations 

and Their Effect on American Jobs.’’ The American people are primarily interested in stimulating their economy today and creating 

jobs. One of the concerns that many of us on this side of the aisle 

have as well as others on the other side of the aisle is that the long 

list of regulations being considered at EPA today, we have a very 

real concern that they are going to have a significant impact on our 

ability to create jobs. I might also say that the energy debate in 

America today has been summed up in about six words and this 

is where we are, fossil fuels are bad and green energy is good. And 

I think most of us recognize that it is a lot more complicated than 

that and we and certainly I recognize that in order to meet our increased demands just on the electricity side we are going to have 

to have electricity produced from all sources. 

But the Obama Administration has placed so much emphasis on 

green energy, billions of dollars from the Stimulus Fund has gone 

for that. All sorts of tax incentives have gone for that and the problem that I have with it is not that we are spending taxpayers dollars to help develop green energy but I think the American people 

are being misled on the role that green energy can play in the immediate future. For example, the Obama Administration recently 

came out with a ruling that they wanted to reduce the 2005 greenhouse gas emissions by 83 percent by the year 2035. 

Now, when you think about that formula, it is kind of complicated. What does that really mean? Why not just say we are 

going to allow so many tons of emissions by this date? Well, I think 

that it is being done because they don’t want the American people 

to recognize really what they are saying. If you look at the numbers of reducing the 2005 emissions by 83 percent, what you are 

talking about you are taking America back to 1920, in the 1920s. 

That is the last time we had emissions that low and I will tell you 

what, in the 1920s only two percent of rural homes in America had 

electricity. Around 50 percent of American homes in the rest of the 

country had electricity. We didn’t have any cellphones. We didn’t 

have any flat-screen TVs. We didn’t have any Blackberrys. We 

didn’t have iPods or iPads. So to think that we are going to reduce 

by 2035, 87 percent of 2005 emissions, in my view is a pipedream. 

Now, having said that, I know this Administration is making the 

argument that green energy is going to carry out country and that 

is where the jobs are going to be created. But in my view and from 

the analysis that I have looked at and from all of the hearings that 

I have sat through, through the years, I don’t think anyone realistically believes that green energy can provide the electricity needs of 

America any time soon. 

Fifty-two percent of our electricity still comes from coal. Seventy 

percent of electricity produced in China comes from coal. American 

railroads are taking more coal to the ports today for export to 

China than at any time in its history. In 2006, 6.7 billion tons of 

coal were used worldwide. In 2010, it was over 10 billion tons and 

3 

they anticipate the additional coal necessary just to meet the needs 

of China and India in the next few years is going to increase another billion or so. 

So yes, we need green energy. We need natural gas. We need nuclear energy but we also are going to have to have coal to meet the 

expected increase in demand. So the point that I would simply try 

to like to make is let us be realistic here. Let us not mislead the 

American people. Let us have an honest give and take discussion, 

answer questions, ask questions and try to come out with the right 

policy for the American people and that is what these hearings are 

designed to do and we look forward to the testimony today. I will 

introduce all of you a little bit later right before you testify. 

[The prepared statement of Mr. Whitfield follows:] 

PREPARED STATEMENT OF HON. ED WHITFIELD

The American people are primarily interested in stimulating their economy today 

and creating jobs. One of the concerns that many of us have is that the long list 

of regulations being considered at the Environmental Protection Agency today will 

have a significant impact on job creation. 

The energy debate in America today has been summed up in about six words, and 

this is where we are: fossil fuels bad, green energy good. Many of us recognize that 

it’s a lot more complicated than that. However, in order to meet our increased demands just on the electricity side, we are going to need electricity produced from 

all sources. 

The Obama administration has placed so much emphasis on green energy. Billions of dollars in stimulus money and tax incentives has gone for green energy. And 

the problem I have is that I think the American people are being misled about the 

role green energy can play in the immediate future as we use taxpayer money to 

help develop green energy. 

For example, the Obama administration recently came out with a ruling that they 

want to reduce the 2005 greenhouse gas emissions by 83 percent by the year 2035. 

Now many think that this formula is complicated and wonder what it really means. 

Why not just say, ‘we are going to allow a specific amount of emissions by a specific 

date?’ I think it is being done because the Obama administration does not want the 

American people to recognize what they are saying. If you look at the numbers of 

reducing the 2005 emissions by 83 percent, that would be taking American back to 

the 1920s. That was the last time the United States had emissions that low. 

By comparison, in the 1920s, only two percent of rural homes in America had electricity. Around 50 percent of American homes in the rest of the country had electricity. This was before cell phones, flat screen televisions, Blackberries, iPods, or 

iPads. To think that we are going to reduce by 2035 83 percent of 2005 emissions, 

in my view is unrealistic. 

Now, having said that, I know this administration is making the argument that 

green energy is going to carry our country and that is the field in which jobs will 

be created. But in my view, and in the analysis that I have read and the hearings 

that have been held on this issue, I do not think that anyone realistically believes 

that green energy alone can provide the electricity needs of America anytime soon. 

52 percent of our electricity still comes from coal and 70 percent of electricity produced in China comes from coal. American railroads are taking more coal to the 

ports today for export to China than in any time in history. In 2006, 6.7 billon tons 

of coal was used worldwide and in 2010, it was over 10 billion tons. And it is anticipated that the amount of coal needed to meet the needs of China and India in the 

next fear years will increase even more. 

Yes, we need green energy. We need natural gas, nuclear energy. But we also 

need coal to meet the projected increase in demand. 

Let’s be realistic and not mislead the American people but rather have an honest 

give and take discussion and try to come up with the right policy for the American 

people. And that is what this and other hearings are designed to do. 

I look forward to hearing from our witnesses and thank you for being here today. 

4 

# # # 

Mr. WHITFIELD. But at this time, I would recognize the gentleman from Illinois for his opening statement. 

OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

Mr. RUSH. I want to thank you, Mr. Chairman, and I want to 

thank all of the guests for attending today’s hearing. 

Mr. Chairman, there seems to be a concerted effort by many of 

my colleagues on your side of the aisle to de-legitimatize the 

science that says greenhouse gases are and therefore should be regulated. Additionally, in an attempt to counteract all the various respected peer review studies that show the environmental protection 

industry actually creates jobs and stimulates the economy as well 

as leads to a healthier and more productive constituency. 

Today we will hear testimony that will lead us to believe that 

any policy that regulates greenhouse gases will automatically lead 

to job loss. However, it is extremely important for us to remember 

that just because it is possible to find some within the scientific 

community to dispute what the other 90 percent of scientists agree 

on that climate change is manmade, does not make the lone dissenter the authority on this very important issue. And just because 

different industry sources pay to produce studies that show that 

regulating greenhouse gases will be costly and yield little to no 

benefit, doesn’t make it true. My point here is that not all studies 

are not equal and we should carefully vett those individuals who 

disagree with the vast majority of respected scientists worldwide on 

the causes of climate change as well as those who refute the reports that say moving toward more efficient and cleaner energy 

technologies will lead to substantially greater cost without the 

added benefits. 

In fact once again, Mr. Chairman, our side tried to invite one scientist to sit on the witness panel today only to be again revoked 

by the other side. I cannot imagine why this committee will attempt to move such sweeping and regressive legislation such as 

that will repeal EPA’s ability to regulate harmful greenhouse gases 

without hearing the scientific evidence of how this will impact our 

economy, our environment and the public health. I sincerely hope 

that we will be able to hear from scientists at a future hearing so 

that we will be able to make informed decisions before moving to 

any markup of this legislation in this area. After all, just because 

we may try to ignore the science behind greenhouse gas emissions 

and how it affects climate changes does not mean it does not exist. 

We know that since the inception of the Clean Air Act opponents 

of the greenhouse view have been warning that environmental regulations will kill jobs and lead to outsourcing overseas. Clean air 

opponents falsely predicted that electricity prices would skyrocket 

if the 1990 Clean Air Act amendments were passed when in fact 

electricity prices actually declined in the decade following 1990 by 

approximately 18 percent. While we hear that regulating greenhouse gases will cripple our economy and destroy our manufacturing industry, he U.S. Census Bureau conducted an annual survey of the U.S. manufacturing sector and found a solution abateVerDate Nov 24 2008 12:08 Aug 10, 2011 Jkt 037690 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 P:\MY DOCS\HEARINGS 112\112-12 030111\112-12 CHRIS
5 

ment. Operating costs were only 0.4 percent on average of overall 

manufacturing loss including not just air pollution controls but all 

other abatement costs. 

Mr. Chairman, actually the Clean Air Act has been one of the 

most successful and bipartisan environmental laws enacted in 

American history. Mr. Chairman, I would submit that history has 

proven that we can protect our environment and also strengthen 

our economy to sensible and balanced regulation that helps create 

jobs and new technologies to protect the public interests, increase 

worker productivity and promote clean air. 

With that, I yield back the balance of my time. 

[The prepared statement of Mr. Rush follows:] 

PREPARED STATEMENT OF HON. BOBBY L. RUSH

Thank you, Mr. Chairman, and thank you to all of the guests attending today’s 

hearing. 

Mr. Chairman, there seems to be a concerted effort by many of my colleagues on 

your side of the aisle to delegitimize the science that says that greenhouse gases 

are pollutants and, therefore, should be regulated. 

Additionally, in an attempt to counteract all of the various respected, peer-reviewed studies that show the environmental protection industry actually creates 

jobs and stimulates the economy, as well as leads to a healthier and more productive constituency, today we will hear mention of several other studies that attempt 

to debunk these facts and lead us to believe that any policy that regulates greenhouse gases will automatically lead to job loss. 

However, it is extremely important for us to remember that just because it is possible to find some within the scientific community to dispute what the other 90% 

of scientists agree on, that climate change is man-made, does not make the lone dissenters the authority on this issue. 

And just because different industry sources pay to produce studies that show that 

regulating greenhouse gases will be costly and will yield little to no benefit, does 

not make it true. 

My point here is that all studies are not equal and we should carefully vet those 

individuals who disagree with the vast majority of respected scientists worldwide on 

the causes of climate change, as well as those who dispute the reports that say moving toward more efficient and cleaner energy technologies will lead to substantially 

greater costs without the added benefits. 

In fact, once again, our side tried to invite a scientist to sit on the witness panel 

today, only to be rebuffed. I cannot imagine why this Committee would attempt to 

move such sweeping and regressive legislation, such as the Upton-Inhofe bill, that 

would repeal EPA’s ability to regulate harmful greenhouse gases, without hearing 

the scientific evidence of how this would impact our economy, environment, and the 

public health. 

I sincerely hope that we will be able to hear from scientists at a future hearing 

so that we are able to make informed decisions before moving to any markup of legislation in this area. 

After all, just because we may try to ignore the science behind greenhouse gas 

emissions and how it affects climate change, does not mean it does not exist. 

We know that since the inception of the Clean Air Act, opponents of the bill have 

been warning that environmental regulation will kill jobs and lead to outsourcing 

overseas. Clean Air Act opponents falsely predicted that electricity prices would skyrocket 

if the 1990 Clean Air Act amendments were passed, when in fact, electricity prices 

actually declined in the decade following 1990 by approximately 18%. 

While we will hear that regulating greenhouse gases will cripple our economy and 

destroy our manufacturing industry, the U.S. Census Bureau conducted an annual 

survey of the U.S. manufacturing sector and found that pollution abatement operating costs were only 0.4%, on average, of overall manufacturing costs, including not 

just air pollution controls but all other abatement costs. 

In fact, peer-reviewed articles in top economics journals find little evidence that 

environmental regulations have dampened U.S. competitiveness or led to 

outsourcing. 

Though I am sure today we will hear testimony that allowing EPA to move forward on plans to regulate greenhouse gases will destroy the economy and kill jobs, 

6 

I must point out that the Clean Air Act has been one of the most successful and 

bipartisan environmental laws enacted in American history. 

In the 40 years since its enactment, the Clean Air Act has decreased air pollutants by 60%, even as our economy has grown by over 200%. 

A peer-reviewed EPA study found that the Clean Air Act was responsible for saving over 205,000 premature deaths, 22,000 cases of heart disease, and 674,000 cases 

of chronic bronchitis, annually, between 1970–1990. 

Additionally, the Clean Air Act has been a stimulant for our economy, with estimates that it generated as much as $300 billion in revenues and $44 billion in exports, while supporting close to 1.7 million American jobs by the year 2008. 

In fact, when both direct employment and indirect employment are taken into account, the environmental protection industry is estimated to have created a range 

of 3.8 million to 5 million new jobs. 

These jobs run the gamut from factory workers to engineers, computer analysts, 

accountants, clerks, ecologists, truck drivers, and consultants, among others. 

Promoting cleaner technologies has the benefit of protecting our citizens with 

cleaner air while also creating jobs and investments for our economy. 

The Office of Management and Budget examined ten Clean Air Act regulations 

finalized in 2008, 2009, and 2010, and concluded that all ten had benefits that exceeded costs, by a ratio of 7 to 1 on average. 

In fact, according to the Department of Commerce International Trade Administration, environmental technology exports have grown dramatically from less than 

$10 billion in 1990 to about $44 billion in 2008, and the U.S. share of foreign environmental technology markets has been increasing. 

In 2008, the U.S. had a net trade surplus of $11 billion in environmental technologies, which helped the U.S. balance of trade. 

Additionally, according to many top CEOs, there could be a great benefit for industry to have clear-cut rules of the road in regards to clean energy and regulatory 

obligations moving forward, rather than the piecemeal approach that is being implemented by the States and regional authorities currently. 

Mr. Chairman, I fear today’s debate is being framed in a way where we are presented with a false choice between ‘‘job killing’’ EPA regulations and having environmental standards to protect our citizens. 

I would submit that, in fact, history has proven that we can indeed protect our 

environment and also strengthen our economy through sensible and balanced regulations that help create jobs and new technologies, protects the public health, increases worker productivity, and promotes clean air. 

We’ve done precisely this before and it can be done again. 

With that I yield the balance of my time. 

Mr. WHITFIELD. Thank you, Mr. Rush. 

At this time I recognize the chairman of the full committee, Mr. 

Upton, for 5 minutes. 

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

Mr. UPTON. Well, thank you, Mr. Chairman. 

This hearing is about jobs. Jobs and the economy, and to imply 

anything otherwise is misleading. We had this debate in the last 

Congress and studies estimated that a cap-and-trade national energy tax would produce job losses in the hundreds of thousands, if 

not millions, yet EPA is unilaterally acting to impose the very 

same type of policies that Congress rejected in the 111th Congress. 

Job losses that would come from a cap and tax were not intended 

consequences. The whole point of federally regulating greenhouse 

gas emissions is to drive up energy costs so that consumers and 

businesses are forced to use less. 

As the President said, ‘‘Under my plan, electricity prices will necessarily skyrocket.’’ Congress said no but now we face an EPA trying to sneak regulations in through the back door. The job losses 

will span many sectors in businesses large and small. 

7 

We live in a global economy with global competition and nations 

like China have absolutely no intention of similarly burdening their 

industries. Manufacturing jobs will leave this country unless EPA 

is stopped. Even for those who don’t lose their jobs, the news would 

not be good. EPA’s agenda will boost the price at the pump and 

drive up electricity bills. It will make farming cost more and hike 

prices of food. 

So let us dispel a myth. Air quality and public health will not 

be harmed or affected in any way by efforts to slow and then stop 

EPA’s expansive global warming agenda under the Clean Air Act. 

Since 1970, the Clean Air Act has targeted air pollutants like particulates, ozone, lead, mercury, pollutants known to have adverse 

health impacts. The result has been a declining emission of these 

pollutants and we need to make sure that they continue to decline. 

Absolutely none of these efforts are impeded in any way under the 

Energy Tax Prevention Act discussion draft. EPA’s ability and obligation to regulate and mitigate air pollutants like particulates that 

cause soot, ozone that cause smog, carbon monoxide, lead, asbestos, 

chloroform and almost 200 other air pollutants would be protected 

and preserved. So we can stop the EPA from imposing cap and tax 

and the Clean Air Act will continue to make our families and communities healthier places. 

So let us listen to the facts. This issue is not about air quality 

and public health. It is about jobs. EPA is not looking at the impact 

on jobs that the members of this committee should and we must. 

And I yield the balance of my time to Mr. Barton. 

[The prepared statement Mr. Upton follows:] 

PREPARED STATEMENT OF HON. FRED UPTON

This is a hearing about jobs. Jobs and the economy. To imply anything otherwise 

is misleading. 

Scare tactics from the other side are meant as a diversion from what EPA’s greenhouse gas regulations would do to American jobs. 

We had this debate last Congress. Studies estimated that a cap-and-trade national energy tax would produce job losses in the millions. 

Yet EPA is unilaterally acting to impose the very same types of policies that Congress rejected in the 111th. 

The job losses that would come from cap-and-tax were not unintended consequences. The whole point of federally regulating greenhouse gas emissions is to 

drive up energy costs so that consumers and businesses are forced to use less. As 

the President said, ‘‘Under my plan, electricity prices will necessarily skyrocket.’’ 

Congress said no, but now we face an EPA trying to sneak regulations in through 

the back door. The job losses will span many sectors, and businesses large and 

small. 

We live in a global economy with global competition, and nations like China have 

absolutely no intention of similarly burdening their industries. Manufacturing jobs 

will leave this country unless EPA is stopped. 

Even for those who don’t lose their jobs, the news would not be good. EPA’s agenda will boost the price at the pump and drive up electricity bills. It’ll make farming 

cost more, and hike prices of food. 

Let’s dispel a myth. Air quality and public health will not be harmed or affected 

in any way by efforts to slow and then stop EPA’s expansive global warming agenda 

under the Clean Air Act. Let me repeat that: Air quality and public health will not 

be harmed by stopping EPA’s job-crushing global warming agenda. 

Since 1970, the Clean Air Act has targeted air pollutants like particulates, ozone, 

lead and mercury—pollutants known to have adverse health impacts. The result has 

been declining emissions of these pollutants, and we need to make sure they continue to decline. Absolutely none of these efforts are impeded in any way under the 

Energy Tax Prevention Act Discussion Draft. 

8 

Let me say that again. EPA’s ability and obligation to regulate and mitigate air 

pollutants like particulates that cause soot, ozone that cause smog, carbon monoxide, lead, asbestos, chloroform, and almost 200 other air pollutants would be protected and preserved. We can stop the EPA from imposing cap-and-tax, and the 

Clean Air Act will continue to make our families and communities healthier places. 

Carbon dioxide is very different from the many pollutants specifically listed and 

targeted for reduction under the Clean Air Act. it is the stuff we exhale and that 

plants use as food. 

Set aside the scare tactics. Listen to the facts. This issue is not about air quality 

and public health. It’s about jobs. EPA is not looking at the impact on jobs, the 

Members of this Committee should and we must. 

Mr. BARTON. Thank you, Chairman Upton, and we can tell that 

when you speak, your opponents try to spam you so that your message doesn’t get out. 

It is a good deal to have a hearing. I appreciate Chairman 

Whitfield having this hearing on the EPA’s greenhouse gas regulation and their effect on American jobs. 

The answer is self-obvious. If you have something that is really 

not a pollutant with CO2 is not as I am giving this speech, I am 

creating CO2 and you don’t have the technology to regulate and unless there has been a miracle occurred in the last 2 or 3 days, if 

you burn stuff with carbon in it you are going to create CO2. It is 

a chemical fact so we don’t have a technology that can control it 

so if you regulate greenhouse gases or regulate CO2, in effect you 

are going to by definition cost jobs because you are going to shut 

down probably 40 percent of our energy production economy in the 

United States, maybe 50 percent. 

So, in spite of the hypothesis that CO2 is a pollutant and in spite 

of the massive educational program to try to convince the American 

people and the world that CO2 is bad, the facts are otherwise and 

I am going to be absolutely stunned if in this hearing we don’t hear 

from our industrial friends that if you really regulate CO2 to the 

extent that Chairman Whitfield was talking about in the WaxmanMarkey bill, you are basically shutting down the U.S. economy and 

that is tens of millions of jobs and hundreds of billions of dollars. 

So this is a very good hearing and I hope, Mr. Chairman, as a result of this hearing we do begin to move the Whitfield-Upton bill 

and make it explicitly clear that the Clean Air Act does not apply 

to greenhouse gases. 

And with that I yield back to Chairman Upton. I yield back to 

the subcommittee chairman. 

[The prepared statement of Mr. Barton follows:] 

PREPARED STATEMENT OF HON. JOE BARTON

Thank you Mr. Chairman. This Committee’s commitment to investigate and expose the effects of the Obama Administration’s regulations on jobs and our economy 

continues today as we discuss the ways the Environmental Protection Agency (EPA) 

plans to impose greenhouse gas regulations under the Clean Air Act (CAA). 

Two weeks ago, EPA Administrator Jackson testified before this Committee and 

she and I went over the six criteria pollutants regulated by EPA under the Clean 

Air Act, and greenhouse gases are not and should not be one of them. Congress has 

rejected such legislation, yet the EPA seems determined to regulate greenhouse gasses without examining the disastrous effects of these regulations on jobs and the 

production and cost of energy. 

On February 16th, Congress received a letter from more than a dozen industry 

trade associations citing a study estimating that EPA’s greenhouse gas regulations 

could decrease capital investments by $25 09 75 billion and result in an economyVerDate Nov 24 2008 12:08 Aug 10, 2011 Jkt 037690 PO 00000 Frm 00014 Fmt 6633 Sfmt 6633 P:\MY DOCS\HEARINGS 112\112-12 030111\112-12 CHRIS
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1http://thehill.com/blogs/e2-wire/677-e2-wire/144613-oil-mining-groups-urge-house-to-curtailepa-climate-rules-in-cr 

wide job loss of 476,000—1.4 million jobs. 1 I look forward to hearing from the first 

panel of witnesses comprised of industry representatives about their reactions to 

this letter and other potential effects of these regulations and the second panel witness, Ms. McCarthy, from EPA’s Office of Air and Radiation. 

Mr. WHITFIELD. Thank you, Mr. Barton. 

At this time I recognize the ranking member from California, Mr. 

Waxman, for 5 minutes. 

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

Mr. WAXMAN. Mr. Chairman, this hearing reminds me of an article that appeared in the New York Times magazine on Sunday. 

The article was titled, ‘‘Fact-Free Science’’ and it describes how 

Washington has been infected by a mainstreaming and 

radicalization of antiscientific thought. Today’s hearing could be an 

example A of antiscientific thought in this House where falling 

down a rabbit hole into wonderland where the facts are turned upside down and fiction is accepted as reality. The premise of this 

hearing and the legislation that is being reviewed is that climate 

change is a hoax and EPA’s modest efforts to reduce carbon pollution will imperil our economy. These claims remind me of William 

James who once said, ‘‘There is nothing so absurd that it cannot 

be believed as truth if repeated often enough.’’ 

These are the facts: Climate change is real and our future economic prosperity depends on investing in a new clean energy economy. If we don’t act to reduce carbon pollution and promote clean 

energy, we will lose millions of clean energy jobs to the countries 

that do. China understands this. The Chinese are investing over $2 

billion each week in renewable and other green technologies and so 

does Europe, which is racing ahead of us in reducing carbon emissions and developing advances in solar energy and green buildings. 

Last Congress, CEOs from our Nation’s leading companies like 

General Electric and Duke Power told us that billions of dollars in 

private capital has been frozen because the United States does not 

have a long-term plan for reducing carbon emissions. The CEO of 

PG&E, one of the Nation’s largest utilities warned of an incredible 

lost opportunity if we don’t act now. He said there are these amazing developing new technology sectors across the United States and 

we see those jobs going overseas and technology superiority going 

overseas. 

The cost of inaction is not just the loss of leadership in the global 

economy. We also risk irreversible and potentially catastrophic impacts. Our weather is getting more extreme and more dangerous 

every year. Last year was the hottest and wettest on record. Floods 

in Arkansas, Kentucky, Mississippi, and Tennessee killed dozens. 

They submerged much of Pakistan and Australia, and droughts in 

Russia and China are driving food prices to record levels. The risks 

to our economy from climate change are real and are potentially 

enormous and that is why we cannot have an informed debate 

about the economic cost of EPA regulation if we ignore these imVerDate Nov 24 2008 12:08 Aug 10, 2011 Jkt 037690 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 P:\MY DOCS\HEARINGS 112\112-12 030111\112-12 CHRIS
10 

pacts. If we look only at the cost of regulation without considering 

the cost of doing nothing, we are looking at only half of the equation. 

Ranking Member Rush and I have been urging that the subcommittee consider the scientific evidence and we asked for a leading scientific expert to be invited to testify today but this request 

was denied. We asked for a hearing on two new studies linking severe weather events to manmade climate change but we have not 

yet received a response. For this reason, we are invoking our rights 

under the House rules to request a minority hearing with scientists. Last month we heard testimony from Senator Inhofe that 

climate change is a hoax. We need to hear from real scientists before we mark up the Upton-Inhofe bill. Mr. Chairman, I ask that 

our letter requesting this hearing be made a part of today’s hearing. 

Mr. WHITFIELD. Without objection. 

[The information appears at the conclusion of the hearing.] 

Mr. WAXMAN. I have one other concern about today’s hearing and 

that is the decision to put the EPA Assistant Administrator Gina 

McCarthy on the second panel. This is inconsistent with the practices of our committee. I raised my concern with Chairman Upton 

earlier today. He agreed that the general rules should be that the 

Administration witnesses testify first on their own panel and has 

been the tradition, Democratic and Republican Administrations but 

the Committee would proceed differently. That wouldn’t happen 

today. It is too late to change the order of today’s hearing but that 

the Committee would proceed differently in the future hearings. I 

thank him and, Mr. Chairman, I thank you for the courtesy to 

make this statement and I look forward to working with you. 

Mr. WHITFIELD. Thank you very much, Mr. Waxman. 

And before I introduce the members of this panel who will be testifying today, I did want to say that of course Congress, we were 

not here last week and when I came back yesterday my staff did 

give me a copy of the February 24 letter that you and Mr. Rush 

wrote in which you did request convene a hearing to discuss the 

new studies that you had indicated. 

I might say that over the last two Congresses, we have had in 

the Congress over 24 hearings on climate change and the science 

relating to it which I do have a list of here. However, I understand 

also that under the Rule 11 procedure you all are entitled to a 

hearing with witnesses on the climate change issue that you want 

to bring up. It is also my understanding after talking to the Parliamentarian that as the chairman of the subcommittee I would have 

the opportunity to set the date for that hearing. And I would just 

in order to approach this in a correct way and try to have regular 

order, I would be happy to notice the hearing and we could notice 

it today for your two witnesses that you would like, maybe we 

would bring in a witness or two to maybe get a different view than 

your witnesses might give and we could do it even next Tuesday. 

Now, I said next Tuesday simply because we have looked at the 

calendar out for 3 or 4 weeks and it is very, very full. We are doing 

lots of hearings on all of the subcommittees but if you, Mr. Waxman, and Mr. Rush would be willing to have this hearing next 

Tuesday, you select your witnesses, we would notice it today. I 

11 

don’t want to get involved myself in taking a lot of time in determining who all these witnesses are just because of the time constraints but if you all would be willing to give us the name of those 

two witnesses, we could notice it today. We can have the hearing 

next Tuesday. 

Mr. BARTON. Will the chairman yield? 

Mr. WHITFIELD. Yes. 

Mr. BARTON. I appreciate the chairman yielding. 

Before we commit to a specific date, I would encourage the subcommittee chairman to enter into a discussion with Mr. Waxman 

and Mr. Rush and Mr. Upton. Normally, when you—first of all it 

is very rare to invoke a Rule 11 hearing but when it does happen 

there normally is some discussion about timing so that both the minority and the majority have adequate time to prepare and also get 

adequate witnesses and at least in this member’s perspective, it 

would be very difficult to have an appropriate proper hearing by 

next Tuesday given everything that is happening this week and is 

scheduled to already happen next week. But I do think that if you 

have a discussion with our distinguished minority ranking members of the subcommittee and full committee, you could very expeditiously schedule such a hearing that helps both sides. 

Mr. WHITFIELD. Mr. Barton, I really appreciate your comments. 

I will say that we had a 1-hour meeting with staff looking out at 

the calendar on this issue and of course I am not speaking for Mr. 

Rush and Mr. Waxman, they may find next Tuesday inconvenient 

but my understanding from reading the letter and from discussions 

that I have had with our staff, we were talking about maybe two 

witnesses on your side and I think we have identified one or two. 

I think it could be done rather quickly, however I am simply making the offer and yes, sir. 

Mr. WAXMAN. Look, I just think it is important to hear from scientists on this issue before we mark up this bill and I am happy 

to discuss the schedule with you. I can’t make any promises at this 

point but I want to work with you in good faith that we can have 

this hearing. It is an important part of the debate and if we are 

going to pass legislation out of this subcommittee, the subcommittee should have a hearing before we do that. That is my 

only. 

Mr. WHITFIELD. Well, I would be happy to do that. I am offering 

you that we would do a hearing on Tuesday. I can’t commit. 

Mr. WAXMAN. We will do our best for Tuesday. 

Mr. WHITFIELD. Yes, let me just say I can’t commit that we will 

have a hearing before we have a markup but I don’t know that that 

date has been set. 

Mr. RUSH. Mr. Chairman, I think that is absolutely critical that 

we on the outside be allowed to have this hearing based on scientists of our choosing and I am sure you have scientists also. We 

could have a hearing would be almost without any meaning. I 

think the members of the subcommittee need to hear from scientists. They need to hear from scientists of our choosing about 

this important matter. 

Mr. WHITFIELD. Well, and like I said we have had 24 hearings 

on the science. 

12 

Mr. RUSH. Mr. Chairman, if I might I would just ask are you 

planning on having a markup on this hearing next week? 

Mr. WHITFIELD. I can say for myself that we have not decided 

specifically on a date for a markup that I am aware of however we 

do want to move quickly. I think we have made that very clear in 

the beginning we want to move quickly on this and I might say 

that I think our regular order has been much better. Not to get 

into the health care bill of last year but we didn’t even have an opportunity to even offer an amendment on the House floor on that 

bill but I am offering you all an opportunity to do a hearing on 

Tuesday. And if not, I suppose obviously you have the right to invoke a Rule 11 and go from there. 

Mr. WAXMAN. Mr. Chairman, let us notice your hearing for next 

Tuesday. We will do our best to get the witnesses there. 

Mr. WHITFIELD. OK so we will notice the hearing for next Tuesday. 

Mr. SHIMKUS. Mr. Chairman, would you yield for 1 second just 

to fulfill this debate? 

Mr. WHITFIELD. Yes. 

Mr. SHIMKUS. If I remember correctly when we moved the Waxman-Markey bill we continuously asked for an economic analysis 

and we never had a hearing on that prior to the markup of the bill. 

We did get a hearing 2 weeks after we marked up the bill so, you 

know, what is good for the goose is good for the gander and what 

we are trying to do here as we tried to do a couple of weeks ago 

is talk about the economic impacts. So let us understand the history behind this and we didn’t get a chance to deal with the economic aspects. Not a single hearing. The bill was marked up and 

then 2 weeks later we had a hearing on the economic impacts. 

Mr. WAXMAN. Will the gentleman yield to me? 

Mr. SHIMKUS. I will. 

Mr. WAXMAN. We did have before there was a markup an EPA 

analysis I think that the members wanted further analysis of it but 

we did have that before the markup. 

Mr. SHIMKUS. Reclaiming my time, we don’t consider the EPA 

the expert on economic impact especially when in our hearing of 2 

weeks ago they readily admitted that they don’t consider economic 

impacts in their decision. 

Mr. WAXMAN. Will the gentleman yield further? 

Mr. SHIMKUS. I would be happy to. 

Mr. WAXMAN. We could go back and forth. You did this. We did 

that. We have asked for a hearing. The chairman has suggested 

that we take next Tuesday. We are trying to accommodate that request and I think it is helpful for all of us to get all the information 

we need and I would think since it is an important scientific controversy with members. 

Mr. SHIMKUS. Just reclaiming my time and I agree with you. I 

am just setting the record straight and I yield back. 

Mr. BARTON. Will the ranking member yield for a question if it 

is his turn? 

Mr. WAXMAN. I don’t have time. It was the gentleman from Illinois’ time. 

Mr. BARTON. Would the chairman yield? 

Mr. WHITFIELD. I recognize the gentleman. 

13 

Mr. BARTON. I would like to ask my distinguished friend from 

California are there some new studies that have come out in the 

last week, month, even 6 months that you believe are different 

than all the other studies that we have seen in the last say 12 

months? 

Mr. WAXMAN. Well, I see six members attending this hearing 

today who were not on the committee in previous Congress’. I think 

it would be well for them to be informed. I think it is well worth 

getting testimony. I think it is an essential part of doing legislation. 

Mr. BARTON. But the answer is no? There is no new information? 

Mr. WAXMAN. There are new studies linking carbon emissions to 

severe weather and I think that is an important part of what we 

have been looking at around the world. 

Mr. RUSH. Will the gentleman yield just for a moment? 

Mr. BARTON. I think Chairman Whitfield is a saint. 

Mr. WHITFIELD. Before—Mr. Waxman, you are not getting ready 

to leave are you? 

Mr. WAXMAN. No, no. 

Mr. WHITFIELD. OK. 

Mr. BARTON. If I have the time, I am going to yield to my friend 

from Chicago briefly before Chairman Whitfield reclaims the gavel 

and moves the hearing forward. 

Mr. RUSH. Well, I thank the gentleman for yielding. I think that 

it is absolutely essential for us to have this hearing with these scientists because the matter before us is very important and I think 

that it really would inform members. There may be some amendments to this bill that we will be discussing that will be initiated 

because of testimony and I do possibly see that there might be 

some amendments that might even be bipartisan once we hear the 

scientists. So I think this is really absolutely necessary for us to 

move forward with this hearing so that we can discuss this to its 

fullest effect. 

Thank you, Mr. Chairman. 

Mr. WAXMAN. Whoever has the time would you yield further to 

me? 

Mr. BARTON. I do and I am going to yield one last time to Chairman Waxman. 

Mr. WAXMAN. I asked earlier today in my opening statement that 

we make part of the record information on some new studies. We 

pointed out in our letter to the chairman that there are two new 

studies linking severe weather events to manmade climate change 

and I think it is important for us to hear about it even if you don’t 

believe it is true. 

Mr. BARTON. I am happy to look at this new information. Being 

a professional engineer I am always interested in the truth and 

will be more than happy to. 

Mr. WAXMAN. During the 111th Congress there was only one scientist who testified that science didn’t testify actually and that was 

Patrick Michaels and as the chairman knows we are currently examining whether he was fully forthcoming with the committee. I 

don’t think the only scientist, supposed scientist witness on science 

should be Senator Inhofe. 

Mr. WHITFIELD. Thank you all. I agree. I agree. 

14 

Mr. WAXMAN. Are you willing to take yes for an answer, Mr. 

Chairman. 

Mr. WHITFIELD. Let me just note we have votes on the floor. We 

just have two votes and then we are going to come back immediately because we want to hear your testimony but before we 

break I just want to make sure that I understand here what we 

have committed to. This is a regular hearing. Not an invoking Rule 

11 hearing. Notice today hearing scheduled for Tuesday. You select 

your two witnesses regarding the studies and we will get a witness 

or two. 

Mr. WAXMAN. We want it to be a regular hearing. We may need 

more than two witnesses. We will discuss that with you. 

Mr. WHITFIELD. We would like to have the names of them today 

though. 

Mr. WAXMAN. We will do our best. 

Mr. WHITFIELD. OK. 

Mr. WAXMAN. We did send you a letter before the recess. 

Mr. WHITFIELD. You did, you absolutely did. 

Mr. WAXMAN. We are working with you in good faith. We just 

think this is an important part of the process. 

Mr. WHITFIELD. OK, now we are going to take about a 10 or 15 

minute recess and then we will be back and I will introduce this 

panel and hopefully the next part of this hearing will be even more 

exciting than the first part. 

[Recess.] 

Mr. WHITFIELD. OK, thank you all so much for your patience and 

at this time I would like to introduce the witnesses for the first 

panel. First of all we have Mr. Mike Carey who is president of the 

Ohio Coal Association. We have Mr. Paul Cicio, President of Industrial Energy Consumers of America. Mr. Hugh Joyce, President of 

the James River Air Conditioning Company. Mr. Forrest McConnell, President of McConnell Honda and Acura. Mr. David Montgomery, Vice-President, Charles River Associates and Professor 

Dan Reicher who is professor law and director of the Steyer-Taylor 

Center for Energy Policy at Stanford Law School. So I extend a 

warm welcome to you all. We need your assistance. We look forward to your testimony and I would remind each of you that you 

have 5 minutes for your opening statements. At the end of that 

time, once we have completed the entire panel we will have questions from the members. So at this point, Mr. Carey, I recognize 

you for a 5-minute opening statement and we will go right down 

the line. Be sure and turn your microphone on. 

15 

STATEMENTS OF MIKE CAREY, PRESIDENT, OHIO COAL ASSOCIATION; PAUL CICIO, PRESIDENT, INDUSTRIAL ENERGY 

CONSUMERS OF AMERICA; HUGH A. JOYCE, PRESIDENT, 

JAMES RIVER AIR CONDITIONING COMPANY, INC.; FORREST 

MCCONNELL, NATIONAL AUTOMOBILE DEALERS ASSOCIATION, AND PRESIDENT, MCCONNELL HONDA AND ACURA; W. 

DAVID MONTGOMERY, VICE PRESIDENT, CHARLES RIVER 

ASSOCIATION; AND DAN REICHER, EXECUTIVE DIRECTOR, 

STEYER-TAYLOR CENTER FOR ENERGY POLICY AND FINANCE, STANFORD UNIVERSITY, PROFESSOR, STANFORD 

LAW SCHOOL, AND LECTURER, STANFORD GRADUATE 

SCHOOL OF BUSINESS 

STATEMENT OF MIKE CAREY 

Mr. CAREY. Chairman Whitfield, Ranking Member Rush and 

members of the committee, good afternoon. I want to thank you for 

inviting me for the opportunity to testify. 

My name is Mike Carey. I am president of the Ohio Coal Association. We are a trade organization that employs roughly 3,000 

Americans in our Ohio coal mines and according to many independent studies that number goes up to roughly 30,000 secondary 

jobs in the coal fields. 

It is difficult for me to confine my remarks today on only the 

greenhouse gas regulations because our industry nationwide is facing an unprecedented onslaught of new rules that will eliminate 

coal in the direct and indirect jobs associated with it. To be clear, 

we are not advocating for a rollback or repeal of the current existing Clean Air Act programs but what is coming out of the Obama 

EPA is a host of new regulatory proposals including the Clean Air 

Transport Rule and the Utility Mac. 

Already, because of threats from the Administration and the 

EPA, United States power producing companies have announced 

that they have plans to retire close to 14,000 megawatts of coalfired electric generation by 2011 and 2020. To be clear, CO2 does 

not have a negative health impact. In fact, a repeal is not a rollback of the Clean Air Act. Congress did not intend for it to be regulated in 1990 and has not passed cap and trade legislation. 

It is also important to remember what EPA Director Lisa Jackson said just 2 years ago when she was asked what unilateral U.S. 

action on climate change would do. She said, and I quote, ‘‘It would 

have no significant impact on atmospheric greenhouse gas levels.’’ 

But the manufacturing jobs in my home State of Ohio and those 

of the surrounding States of West Virginia, Pennsylvania, Indiana, 

Kentucky, and Michigan would ultimately see jobs go to China and 

India for no environmental benefit. 

In 2008, President Obama said, and I quote again, ‘‘If someone 

wants to build a new coal-fired power plant, they can but it will 

bankrupt them because they will be charged a huge sum for all the 

greenhouse gas that they are emitting.’’ The President couldn’t 

have been clearer with his intentions and his Administration is following forward on their war on the American coal industry. 

This legislation that we are discussing today recognizes the logical starting point and that is that Congress never intended greenhouse gases to be regulated under the Clean Air Act. It is my hope 

16 

that this committee will take action on all legislation that will interpret this flood of regulations that are an avert attack on our industry, not only just out industry but the low-cost power producing 

facilities that consume our products and ultimately the American 

manufacturing base. 

We are already seeing some of the effects of the Obama EPA’s 

plan to regulate greenhouse gases. Domestic energy resource companies that had plans to grow job-creating economic development 

projects simply have moth-balled them and in many ways companies cannot get access to the critical capital from the lenders because of the uncertainty. As this committee contemplates the regulating the specific of greenhouse gas over a certain period of time 

like a 2-year time period should not be a viable solution. I think 

those of us who have worked with bureaucracies to try to obtain 

permits over the years or even a direct answer know that a 2-year 

delay of greenhouse gas regulations is nothing more than a political ploy and no one in this industry is fooled by that tactic. 

Why are these EPA regulations such a problem? First, through 

the courts EPA has been given an unchecked arbitrary authority 

over jobs through the Clean Air Act permitting. These actions are 

unaccountable to anybody, including Congress. The mere existence 

of the flawed illegal tailoring rule concept shows that the EPA is 

redefining on their own, outside of congressional authority who 

they believe should get special consideration, much like the political waivers under the healthcare law. Under present circumstances the EPA can purposely err in granting a permit thereby allowing activists to object and sue in court. Already we are seeing groups such as the Center for Biological Diversity challenging 

dozens of projects across this country on the grounds of climate 

under NEPA. 

What is ultimately needed is an independent review. I believe 

that we need legislation that mandates that the House and the 

Senate review and approve all significant rules or regulations that 

are promulgated by the Executive Branch. We have this in the 

State of Ohio and we have had it for many years. The question 

really comes down to whether Congress wants the EPA to unilaterally decide where economic development will occur, in which industry and how much Americans will pay for their energy. 

Mr. Chairman, I thank you for the opportunity to testify today 

and I stand ready to answer any of your questions. Thank you. 

[The prepared statement of Mr. Carey follows:] 

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Mr. WHITFIELD. Thank you, Mr. Carey. 

Mr. Cicio, you are recognized for 5 minutes. 

STATEMENT OF PAUL CICIO 

Mr. CICIO. Thank you, Mr. Chairman, Ranking Member Rush. I 

am privileged to be here. 

IECA, the Industrial Energy Consumers of America is a organization of manufacturing companies. We have no oil companies, no 

coal companies, no natural gas companies and no electric utilities. 

We are manufacturers that produce widgets. 

While the manufacturing sector is rebounding, we continue unfortunately to lose competitiveness. The Commerce Department reported on February 11, that the 2010 trade deficit rose to $498 billion dollars, a 32.8 percent increase, the largest in a decade. China 

represented nearly 55 percent of the deficit. 

Our country and we in manufacturing are locked in global competition with other companies and their manufacturing sectors and 

we are losing. We must once again become a country that embraces 

manufacturing with policies that foster capital investment, innovation, low relative energy costs and regulations that are cost-effective and provide certainty. 

The EPA greenhouse gas regulation is an example of regulation 

that creates uncertainty and discourages investment and when 

added to the many other new regulations it is understandable why 

corporate America is sitting on $2 trillion of cash. The irony is that 

the manufacturing sector places a high priority on energy efficiency. We are the most energy efficient. We spend more time and 

money on energy efficiency than any other sector of the economy 

yet we disapprove of the EPA greenhouse gas regulations that set 

a maximum achievable control technology on energy efficiency. Especially when there are positive and cost effective ways of achieving significant energy efficiencies for greater use of combined heat 

and power, or waste heat recovery, or energy efficiency in buildings 

and building consume 40 percent of all the energy in the country. 

A better way that we have proposed is what we call the Sustainable Manufacturing Growth Initiative. It is policies that will revitalize the manufacturing sector over 10 years by improving industrial energy efficiency and it also improves efficiency in buildings. 

And that modeling of what we are proposing would reduce 10 percent of all U.S. greenhouse gas emissions in 10 years, create 3.2 

million man-year jobs and unlock capital-fixed investment of $407 

billion that would be invested in the United States rather than in 

some other country. This is an initiative that every manufacturer 

in the country would support. 

In contrast, I do not know at this time a single manufacturer 

that produces products in the United States that supports the EPA 

greenhouse gas regulation and the reason why is that under EPA 

regulations, EPA takes decision-making out of the hands of manufacturing. They mandate when capital must be spent on energy efficiency technology projects. It mandates what energy efficiency 

projects will be completed even if it is inconsistent with the scope 

or timing of other manufacturing production plans, or business 

strategies, or priorities. It mandates what technology will be used 

even if that technology is not cost-effective or desirable for the type 

29 

or quality of the products that that facility produces. It mandates 

what manufacturing practices will be used to operate the facility, 

taking decision-making out of the hands of manufacturing plant operations people and putting it in the hands of the EPA. 

Mr. Chairman, the U.S. manufacturing sector has lost 5.4 million 

manufacturing jobs in 10 years, 31 percent and unless we work together, this Congress and with this Administration we are not 

going to get those jobs back, and we look forward to working with 

you to make that happen. Thank you. 

[The prepared statement of Mr. Cicio follows:] 

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Mr. WHITFIELD. Thank you very much. 

Mr. Joyce, you are recognized for 5 minutes. 

STATEMENT OF HUGH A. JOYCE 

Mr. JOYCE. Good afternoon, Chairman Whitfield and Ranking 

Member Rush and members of the subcommittee. Thank you for 

giving me the opportunity to speak today. 

I am the owner of James River Air Conditioning located in Richmond, Virginia. We perform HVAC, plumbing, electrical, solar and 

geothermal work on residential and commercial construction and 

retrofit projects. We currently have 150 full-time employees. My father started the company in 1967 and I joined in 1977 while I was 

still in high school and worked my way up to president and owner. 

I have always made it a priority to conduct business with environmental consequences of my decisions and actions kept in mind. I 

am a member of the U.S. Green Building Council and manage 

LEED certified greenhousing projects. In fact, we designed, supervised and constructed the first LEED platinum house certified in 

Richmond. It was completed in September, 2010, 95 percent of its 

energy comes from solar power. It is also connected to Google 

PowerMeter which gives it a daily efficiency rating. 

We also focus on energy efficiency in our own office building 

which generates 10 percent of its power with solar panels on the 

roof. I am making these examples for two reasons. One, I have bet 

the entire net worth and the future of my business on conservation, 

green construction and reducing greenhouse gases, and implementing green strategies for myself and my clients. Secondly, efficiency and conservation make good business sense and I want to 

leave the world in a better place as a result of my work. Let me 

emphasize that I and many other small business owners choose to 

run our companies this way without government mandates. 

Attempts by the EPA to regulate greenhouse gases under the 

Clean Air Act will drive up our costs and will hinder economic recovery particularly in the construction industry. Construction impacts our economy significantly. Currently, new construction is 

down 50 to 90 percent in my market. Some houses and commercial 

buildings in Richmond are selling for less than the raw cost of materials to rebuild them. It routinely takes six months to plan and 

permit a project. A federal permit would cause the process to take 

even longer. The cost of modeling, and engineering, and reviewing, 

and pre-permitting, and cutting through the EPA red tape to permit as the new finding rules indicate would be the case could add 

one to four percent in professional cost to the average construction 

job. Currently, expenditures on material, labor and insurance are 

increasing, yet buildings are selling for less. Any new permitting 

mandates that increase costs like the EPA’s regulatory plan would 

further limit new construction good jobs. Simply put, more confusion, greater uncertainty, means less work and fewer construction 

jobs. 

Due to the already heavily regulated nature of the construction 

industry I have one full-time employee dedicated to monitoring and 

ensuring compliance with regulations. Additional employees contribute to regulatory compliance as well. Regulation such as the 

35 

EPA greenhouse gas rules would be extremely burdensome for 

business and clients. 

According to the SBA, small businesses spent 36 percent more 

per employee on regulations than their larger counterpoints and 

360 percent more on environmental regulation. Environmental regulations alone cost my business approximately $150,000 a year. 

Combining that with other regulations, the total regulatory cost for 

my business is nearly $250,000 a year. As a small business owner 

my hope is the instead of punitive government policies we can 

incentivize environmentally friendly behavior. The EPA’s own Energy Star program is one such example. 

When it comes to reducing greenhouse gases and pollution and 

moving this country forward, I believe we can get more sugar than 

we can with vinegar. Let us tap the power of American innovation, 

new clean energy sources, incentives and free market forces to win 

the battle against pollution. Please help us avoid regulations that 

will increase costs and create barriers to new jobs that will have 

little or no effect on reducing overall global pollution. 

Thank you for having me here today. 

[The prepared statement of Mr. Joyce follows:] 

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Mr. WHITFIELD. Thank you, Mr. Joyce. 

Mr. McConnell, you are recognized for 5 minutes. 

STATEMENT OF FORREST MCCONNELL 

Mr. MCCONNELL. Mr. Chairman, Ranking Member Rush, my 

name is Forrest McConnell. I am president of McConnell Honda 

and Acura of Montgomery, Alabama and I am testifying on behalf 

of the National Automobile Dealers Association. 

Today there are three different fuel economy programs administered by three different agencies under three different standards 

pursuant to three different laws. America’s auto dealers support a 

single national fuel economy program under CAFE beginning in 

model year 2017 as the best way to increase fuel economy, protect 

jobs, preserve passenger safety and reduce vehicle tailpipe CO2

emissions. Congress did not intend fuel economy to be regulated by 

NHTSA, EPA and California together when it passed a bipartisan 

Ten-in-Ten Fuel Economy Act in 2007. It is paramount for Congress to reassert its primacy over this area and return the still recovering auto industry into a single national fuel economy standard. 

There are numerous advantages to this approach. First, its terms 

are set by you, Congress. Second, only CAFE mandates a balancing 

of all the important considerations when setting fuel economy 

standards, jobs, safety, customer choice and customer acceptability. 

Third, CAFE was written specifically to regulate fuel economy. The 

Clean Air Act for all its virtues was not. California’s regulation was 

written also to regulate fuel economy but only in California. Its application in other States results in what the EPA Administrator 

Jackson calls a patchwork of State standards. Fourth, a single national fuel economy is by definition uniformly consistent unlike 

what we have today. 

While the next round of fuel economy rulemaking will not take 

effect until model year 2017, the rules are being drafted now in 

Sacramento and Washington. As a dealer, I am worried about the 

challenges California’s regulation would impose on my industry 

and our customers. According to a recent New York Times, a California official has indicated that CARB, California Air Resource 

Board will implement its patchwork regime in the California State 

in the next round of rulemaking if necessary. This would be problematic for auto dealers and customers because unlike CAFE, 

CARB’s regulations will distort the auto market and do nothing additional to decrease greenhouse gas emissions or improve fuel economy on a national basis. California’s approach to fuel economy regulation involves loopholes, exemptions, market distortions and does 

not balance national factors. CAFE has none of these defects. Congress needs to reaffirm that this body sets national fuel economy 

policy, not California regulators. 

Mr. Chairman, it is doubtful that Congress would ever enact 

three competing fuel economy programs. State regulation is unnecessary. Regulation of tailpipe CO2 emissions by EPA is redundant 

as the only way to reduce such emissions is to increase a vehicle’s 

fuel economy which CAFE regulates. America’s auto dealers support a single national fuel economy program and increases a fuel 

economy that makes sense to customers. It is important that the 

41 

structure of the fuel economy program is sound so that the stringency of the fuel economy standard will be correct. That structure 

must leverage, not frustrate consumer demand. Unless customers 

actually buy new vehicles the environmental and economic benefits 

will not be realized. I urge Congress to return to a single national 

fuel economy standard under CAFE to avoid that risk. 

Thank you. 

[The prepared statement of Mr. McConnell follows:] 

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Mr. WHITFIELD. Thank you, Mr. McConnell. 

Mr. Montgomery, you are recognized for 5 minutes. 

STATEMENT OF W. DAVID MONTGOMERY 

Mr. MONTGOMERY. Thank you, Mr. Chairman and members of 

the subcommittee. 

My name is David Montgomery. I am an economist and I have 

been working on the topic of this hearing for more years than I like 

to remember. I will be discussing my own opinions today as an 

economist. I have formed them over many years. I have numerous 

publications and peer review and professional journals dealing with 

quantitative studies of the cost of greenhouse gas regulations and 

related topics. I will be happy to discuss my qualifications in questions if anyone has any questions about my ability or my objectivity 

on this subject. 

I will say that although I am discussing my own opinions and 

not necessarily those of my employer or my client, I believe, in fact 

I am certain that the vast majority of economists working in this 

area will agree specifically with the points that I am making today 

which is basically that there will be costs to greenhouse regulations. Nevertheless, there are studies that have circulated around 

Washington that claim greenhouse gas regulations will increase 

total employment and stimulate long-term green growth. These are 

the claims that come from politically motivated fringe of the profession. They reach these happy conclusions by simply leaving out half 

of the story. They describe and count only the jobs associated with 

regulatory compliance and ignore all the jobs lost in the rest of the 

economy due to higher cost of doing business. They fail to recognize 

that resources are limited and that money spent with complying 

with regulations is money diverted away from other productive 

purposes. 

These studies are typified by a series of reports by the Political 

Economy Research Institute that are sponsored by politically powerful organizations known as PERI’s and the Center for American 

Progress. They use a simple procedure called multiplier analysis 

but like the philosopher’s stone, turns the cost of compliance with 

regulations into the gold of added jobs but it is fool’s gold. 

If these studies used any comprehensive model of the U.S. economy it would be forced to account for where the resources expended 

on regulatory compliance come from. When I did that, I found that 

in 2015, adding even the most cost-effective forms of greenhouse 

gas regulation and other pending EPA regulations would increase 

wholesale electricity prices by 35 to 40 percent, would reduce average worker compensation by about $700 per year and would shrink 

all the factors of the economy. The biggest hits would be on electricity, coal and energy-intensive industries. I don’t even need to 

repeat that the energy-intensive industries face competition industries in other countries and regions that are not bearing these 

kinds of added costs and that they are quite vulnerable there. 

Other parts of the economy, other industries would take up some 

of the slack for sure but on the net effect on the whole economy 

of these regulations would be that it would be growing less 

robustly. 

53 

Now, let us turn to impact on workers. Using this comprehensive 

approach, total worker compensation I estimate would be driven 

down in 2015 by about one-and-a-half percent. If that reduction in 

compensation were to take the form of lost jobs, you would imply 

the loss of close to two million jobs, not the gains claimed by green 

jobs advocates. Or if our variable markets work efficiently and 

wages adjust to lower productivity, it would be a loss of about $700 

per year in compensation to each worker. Moreover, this is overly 

optimistic. 

Regulation of greenhouse gases under the Clean Air Act will be 

much more costly than this. The reason is that in doing these calculations I assumed an ideal system putting a price on greenhouse 

gas emissions everywhere but EPA’s proposal under the Clean Air 

Act would use command control regulations designed by bureaucrats who know next to nothing about the circumstances of individual businesses. Therefore, there orders cannot be possibly lead 

to solutions as cost-effective as those that managers would find 

with their own additions as they face the price on carbon. 

It is hard for me to think of a worse design for greenhouse gas 

policy than Clean Air Act authorities that were designed to deal 

with localized emissions of trace contaminants. Not only are these 

an excessively costly way to bring about wholesale changes in our 

energy system, they will fall far short of what would have to be 

done to stabilize global temperatures. Pretending the EPA regulations are cost-free is only intended to distract you from designing 

a policy response that avoids unnecessary costs. 

There are many other technical deficiencies and studies of green 

jobs that I have described in my written testimony but I will end 

with just really two simple points. Given the looseness of green accounting, calculations of green jobs might simply be adding up jobs 

that would exist with the EPA regulations or without them so the 

claim of green jobs is simply re-labeling. That clearly cannot create 

real economic benefits though it doesn’t do any harm and that is 

the best case. If a new job slot is created for the sole purpose of 

being green then these people represent a higher cost to their employer while adding nothing to their output or revenues. If green 

jobs are mandated to produce goods needed only because of regulation like replacements for prematurely retired power plants, they 

actually subtract from the present and future economic well-being 

of the Nation. 

Regulation might be justified if it produced environmental gain 

that is worth these costs but that should not obscure the fact that 

prematurely retiring power plants is a cost, not a benefit. Yet the 

logic used by green job proponents implies that the greater the unproductive investment caused by regulation, the greater its beneficial impact on jobs. If that logic was really valid, rather than 

seeking out cost-effective regulation we should seek out the highest 

cost way to achieve environmental goals. Businesses should hire as 

many workers that they can fit on the jobsite for every project. The 

result is absurd because the logic on which it is based is nonsense. 

Thank you, Mr. Chairman. 

[The prepared statement of Mr. Montgomery follows:] 

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Mr. WHITFIELD. Thank you. 

Mr. Reicher, you are recognized for 5 minutes. 

STATEMENT OF DAN REICHER 

Mr. REICHER. Chairman Whitfield, Ranking Member Rush, and 

members of the committee, thank you for the opportunity to testify. 

My name is Dan Reicher. I am executive director of the SteyerTaylor Center for Energy Policy and Finance, a joint center of the 

Stanford Law School and the Graduate School of Business. Prior to 

Stanford, I was director of climate change and energy initiatives at 

Google, president of a private equity firm that invests in energy 

projects and executive vice president of a venture-capital-backed renewable energy company, and prior to these roles I was DOE assistant secretary for energy efficiency and renewable energy and 

the Department’s chief of staff. 

I would like to make two points today. First, controlling U.S. carbon emissions along with other policy and investment measures to 

address climate change and advanced clean energy technology is 

critical to our Nation’s economy, security, health and environmental quality. Second, experience over the last few decades makes 

clear that well-designed environmental and energy regulation far 

from being an economic drag can spur U.S. innovation, enhance 

competitiveness and often cut development and operating costs. 

Regarding the first point, we can debate the relative merits of 

the various approaches to regulating carbon emissions but the 

science tells us we need to act and the vast global market for clean 

energy technology tell us it is in our best economic and security interest to do so. We are unlikely to see the enactment of comprehensive climate and energy legislation any time soon, therefore EPA’s 

current authority to regulate carbon emission should be strongly 

supported building on the agency’s solid record of air regulation 

over the last four decades as well as the Supreme Court’s 2007 decision upholding EPA’s carbon regulatory authority. 

Regarding the second point, Michael Porter, a top Harvard economist and an economic policy advisor to the George W. Bush campaign has been a champion of the view that well-designed and executed regulation can induce efficiency, spur technological innovation and enhance competitiveness. What Porter calls the innovation 

effect makes processes and products more efficient and achieves 

saving sufficient to compensate for both the cost of compliance and 

the cost of innovation. Countries all over the world from China to 

Germany to Japan have committed to controlling carbon emissions 

through a variety of policy and investment mechanisms, and in 

doing so have grown a massive global clean energy industry measured in the trillions of dollars and millions of jobs that was once 

led by the U.S. 

We can advocate this market by turning back the clock in carbon 

controls and related energy policy and investment or we can seize 

the opportunity to lead the global clean energy industry whether 

it is in nuclear power, or renewable energy or advanced coal technologies, or natural gas. We need look no further than China to see 

that clean energy technology industry largely invented and once 

dominated by the U.S. slipping away. As we have dithered in our 

country in recent years in setting energy and climate policy, China 

81 

has been working aggressively to become the world’s clean energy 

powerhouse. The Chinese have set standards for power companies 

to produce more clean electricity, shut down old power plants and 

outdated heavy manufacturing capacity, established a program to 

improve the efficiency of its 1,000 most energy consuming enterprises, invested heavily in energy R&D, provided low-cost financing 

for clean energy projects and made major investments in the electricity gird, and importantly, set a target to reduce carbon intensity 

40 to 45 percent below 2005 levels by 2020. Beyond China, other 

countries including Germany, Japan, South Korea and Denmark 

are forging ahead with ambitious clean energy policy and investment strategies and seeing significant, significant job growth as a 

result. 

In contrast, the U.S. has largely stayed on the sidelines endlessly 

debating the need for an approach to a successful clean energy 

strategy. That is the bad news. The good news is that we can regain our leadership in clean energy. Among the solutions, we 

should adopt a national clean energy standard following the lead 

of many States that have set such standards. I would note that 

Congressman Barton and 16 of his Republican colleagues currently 

serving on the full committee supported an amendment to the 

American Clean Energy Security Act that included a detailed clean 

energy standard. 

We should increase our investment in energy R&D. We should 

support the DOE Loan Guaranty Program that is proving pivotal 

in the deployment of clean energy technologies for renewables to 

nuclear. Over time we should replace the DOE Loan Guaranty Program with a new Clean Energy Deployment Administration that 

was adopted last year by the full House and by the Senate Energy 

Committee. We should extend federal tax credits that have been so 

vital in encouraging private sector financing of clean energy 

projects and most relevant to this hearing, we should reject the 

proposal to withdraw EPA authority to regulate carbon emissions 

under the Clean Air Act. 

Mr. Chairman, I believe it is inevitable that we will put strong 

controls on greenhouse gas emissions. The question of U.S. carbon 

regulation is not whether but when and there is a significant increasing portion of the business community that agrees. A major 

reason they agree is that we have four decades of evidence that the 

federal government will implement carbon controls in a smart and 

cost-effective manner. For example, in 1990 power companies predicted that reducing sulfur dioxide to address the acid rain problem 

under the Clean Air Act would cost $1,000 to $1,500 per ton. In 

fact, the actual cost has been between $100 and $200 per ton. 

With regard to energy efficiency, as a result of a series of federal 

and State standards, a typical refrigerator today uses roughly a 

quarter of the electricity that it did in the 1970s and actually costs 

less in real terms. And with regard to automobile fuel economy, in 

early 2009 the Administration reached an agreement with the auto 

industry creating a single national program for fuel economy and 

greenhouse gas emissions that will increase fuel economy levels in 

new passenger vehicles to 35-and-a-half miles per gallon, save consumers roughly $3,000 over the life of the vehicle, drive fuel consumption in new vehicles down by 30 percent and along with simiVerDate Nov 24 2008 12:08 Aug 10, 2011 Jkt 037690 PO 00000 Frm 00087 Fmt 6633 Sfmt 6633 P:\MY DOCS\HEARINGS 112\112-12 030111\112-12 CHRIS
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lar efforts globally help lower oil demand and decrease oil prices 

making us less vulnerable to oil price shocks from international 

events like those occurring as we speak in the Middle East. 

Wrapping up, prior to my current position at Stanford I spent 4 

years at Google. Coming from the energy sector I was struck by 

how innovation, investment and policy with great leadership from 

the U.S. federal government came together so effectively to build 

an entirely new game changing and job creating industry, the 

Internet, led by our Nation. We must take a similarly coordinated 

approach between the private sector and the U.S. government in 

order to seize the extraordinary opportunities in the next great industry, clean energy technology. If we don’t get our act together between our government and the private sector other countries that 

are taking the long view will be the winners of this marathon. A 

prize worth trillions of dollars and millions of jobs hangs in the balance. 

Thank you for the opportunity to testify. 

[The prepared statement of Mr. Reicher follows:] 

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Mr. WHITFIELD. Thank you, Mr. Reicher, and thank all of you for 

your testimony. 

Tthis testimony is so stimulating really because the perspectives 

on this issue are really diametrically opposed which is what makes 

this so interesting. We are not going to get into the science and I 

am going to read this one sentence, not for its truthfulness per se 

but just as a view. Now, this was stated by Vaclav Claus, President 

of the European Union, about this book which is written by Ian 

Plimer who has won Australia’s highest scientific honor twice and 

he says this is a very powerful, clear, understandable and extremely useful book. Plimer convincingly criticizes the United Nations, the International Panel for Climate Change, UK, U.S., and 

European Union politicians as well as Hollywood show business celebrities. He strictly distinguishes science from environmental activism, politics and opportunism. Now, like I said I am not talking 

about the truthfulness of that but here is the issue. When you have 

that kind of different views on this very important subject and 

Congress on three separate occasions has said no to EPA regulating greenhouse gases, and when Lisa Jackson appeared before 

this committee a couple of weeks and she was asked by Mr. Green 

of Texas, can we really address climate change without strong, 

mandatory reductions by other major emitters in other countries 

and Ms. Jackson said we will not ultimately be able to change the 

amount of CO2 that is accumulating in the atmosphere alone. 

So listening to you gentlemen, many of you talk about the additional cost that would be imposed upon American businesses and 

that the fact that even Ms. Jackson herself has said there would 

not be any dramatic improvement in CO2 reductions, how do draw 

this line? Mr. Carey, you said in your testimony that EPA has indicated that they would be closing down 14,000 megawatts of coal 

plants by 2011–2012. Now, all of you are businessmen but how if 

you lose that kind of electricity, how do you make it up at a cost 

that does not increase the cost of American businesses? Can you 

answer that for me, Mr. Carey? 

Mr. CAREY. Mr. Chairman, I should be clear that the studies I 

am citing, there are several studies and they all vary from about 

75 gigawatts that would be lost under these proposals all the way 

down to 60 gigawatts. 

Mr. WHITFIELD. Gigawatts, OK, right. 

Mr. CAREY. Yes which is also the thousand megawatts so that is 

where we get the number from but clearly for our industry when 

you are shutting down coal-based power producing facilities, much 

like with the Clean Air Act the rush was to put on clean coal technology which at that time is scrubbers. What we are looking at now 

is the baseline of CO2 in the concept of carbon sequestration. So 

the ability for many of these power producing facilities to actually 

meet the standard under a carbon sequestration standard and ultimately be able to get the carbon dioxide to the facility, the technology A is not out and ultimately what could happen and who is 

responsible for the carbon dioxide that goes into the ground. So 

those numbers would reflect a tremendous drop in coal production 

and when you drop the amount of coal as I stated before, Penn 

State said for every one coal job, up to 10 supporting jobs, the secVerDate Nov 24 2008 12:08 Aug 10, 2011 Jkt 037690 PO 00000 Frm 00097 Fmt 6633 Sfmt 6633 P:\MY DOCS\HEARINGS 112\112-12 030111\112-12 CHRIS
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ondary jobs are due to that one coal job, you are looking at taking 

a number from anywhere of shutting down 77 percent. 

Mr. WHITFIELD. Except for Mr. Reicher, it seems like most of you 

agree that businesses would experience higher costs and there 

would be some job loss. Am I correct on that? OK, everybody says 

that and Mr. Reicher feels like the green energy would create additional jobs. 

Mr. REICHER. Mr. Chairman, I would have to say that there are 

costs but there are also benefits. 

Mr. WHITFIELD. Yes and how do you determine what that line is? 

That is the real question. 

Mr. REICHER. That is where reasonable people will differ and 

that is the essence of this debate. 

Mr. WHITFIELD. Yes and, you know, I am glad we are going to 

have Gina McCarthy with us today because she according to EPA 

air chief Gina McCarthy applying the 100–250 tons per year limit 

for greenhouse gases as mandated by the Clean Air Act would require six million sources to obtain Title Five permits, lead to 

82,000 permitting actions under PSD, result in an estimated combined cost of $22.5 billion just to the permitting authorities and not 

to the businesses. So of course I know they are depending on the 

tailoring rule but a lot of people believe that tailoring rule be ruled 

illegal. 

Well, I got off my message here and I am out of time so, Mr. 

Rush, I will recognize you for 5 minutes. 

Mr. RUSH. Thank you, Mr. Chairman. 

Mr. Reicher, how do you respond to the charge that many studies 

show that EPA’s regulation of greenhouse gases will actually create 

jobs and stimulate growth in the economy are incomplete and give 

a distorted picture? 

Mr. REICHER. Could you repeat that? I am sorry, Mr. Rush. 

Mr. RUSH. How do you respond to the charge that many studies 

that show EPA’s regulation of greenhouse gases will actually create 

jobs and stimulate growth in the economy, that they are incomplete 

and they give a distorted picture? 

Mr. REICHER. Mr. Rush, I would look around the world where we 

are seeing a whole host of controls being put on carbon emissions 

from China to the European Union and a whole host of other countries where in fact clean energy industries are taking off, jobs are 

being created in large, large numbers. So I am—this has actually 

been a real net economic benefit in many respects to countries that 

have taken this initial step to begin to control carbon emissions. 

Mr. RUSH. Do you have any particular examples in mind that 

you could? 

Mr. REICHER. Germany is a great example, leading the world in 

so many energy technologies right now and they have taken and 

put into effect a set of rigorous standards to control the emissions 

of greenhouse gas emissions over time, days in goes in. They have 

set and with that has come a very robust industry and a whole 

host of clean energy technologies from advanced natural gas technologies to cogeneration to solar and wind, and to the extent that 

they are actually jobs, there are actually shortages of highly-skilled 

employees for certain of the industries in that country. 

93 

Mr. RUSH. Dr. Montgomery, you had some interesting remarks in 

your testimony and you mentioned the PERI reports before as an 

example of how some studies are incomplete and distorted in regards to the effects of the regulation on job creation. In fact, you 

draw on environmental economics and management which are four 

of the most heavily regulated industries which are pulp and paper 

refining, iron and steel and estimated a net increase in employment of 1.5 jobs per $1 million and environmental spending over 

alternative expenditures. The same publication also found a net 

employment gain from environmental spending noted that and I 

quote, ‘‘Environmental protection is rapidly to become a million 

sales generating job creating industry, $300 million per year and 

five million direct and indirect jobs in the 2003.’’ Do you dispute 

those numbers and if so on what basis do you dispute them? 

Mr. MONTGOMERY. Actually they make my point perfectly that 

the environmental regulations increase the number of workers that 

have to be employed in an industry. They have to file forms. They 

have to operate pollution controls and that adds to cost. Workers 

are a cost. It does not mention what happened to the output of 

those industries compared to what it would have been had they not 

been facing these costs. Yes, they have more workers per dollar of 

output and they have less output because of the effects of higher 

prices, shifting demand away from those industries and into other 

substitutes and shifting demand to other countries. Your second 

point which I believe was that there are many jobs that are created 

in what you cited a number of jobs that are created in industries 

producing pollution control equipment. Absolutely, that is my point 

and those workers are not available for producing other goods that 

actually go directly into the consumption and satisfaction of individuals. Those workers are not available for healthcare. Those 

workers are not available for producing automobiles. We are diverting resources away from other activities in the economy and the 

study that you cited did not mention that in any way. 

Mr. RUSH. So you would say then that if those were same workers were not employed in the efficiency areas then those workers 

would be at work selling cars and manufacturing cars and other industries, is that what you are saying? 

Mr. MONTGOMERY. Well yes, that is clearly true in the long run. 

Absolutely, the employment in this economy is determined by the 

available labor force and aside from occasional recessions we have 

done an extraordinarily good job under Democratic and Republican 

Presidents of maintaining full employment but it is a matter of 

macro-economic policy and you don’t improve on that policy by imposing costs through environmental regulations. It is simply a different category of policy decisions. For example, the PERI report 

that claims to be talking about all of the total jobs that are going 

to be created in the economy. It said well yes, there are some offsetting job losses. The people who are going to be working in those 

coal-fired power plants that are being shut down but it didn’t mention all of the workers in the coal industry that were no longer 

going to be producing coal to go into the 60 or so of gigawatts of 

coal-powered power plants. They absolutely left it out. 

94 

Mr. WAXMAN. The gentleman yield to me. I want to ask you a 

follow-up question. Do you ever see any benefit in regulation to 

deal with pollution or is it all negative? 

Mr. MONTGOMERY. Absolutely, we have had tremendous benefits 

from many of the environmental regulations. We have seen air 

quality in Southern California. I lived in Pasadena for 8 years. 

Mr. WAXMAN. How about in the jobs area? 

Mr. WHITFIELD. Sorry, we are about a minute-and-a-half over. 

Mr. RUSH. Thank you, Mr. Chairman, I yield back the balance 

of my time. 

Mr. WHITFIELD. Thank you for doing that. 

Mr. Barton is next but it is my understanding, let us see. 

Mr. BARTON. I am going to yield I think to Mr. Griffith. 

Mr. WHITFIELD. Mr. Griffith, I understand you have a conflict on 

the floor so we will recognize you for 5 minutes. 

Mr. BARTON. I pass and I do want to ask questions but I wanted 

to let him go first. 

Mr. GRIFFITH. I thank you, gentleman. 

Mr. WHITFIELD. Without objection, Morgan. 

Mr. GRIFFITH. I appreciate it. 

Mr. Reicher, in your written statements you indicate and in your 

oral statements as well that China is well on its way to having a 

green or a more green energy producing economy and isn’t it true 

though at this time that they actually produce more of their electricity with coal than we do in the United States? 

Mr. REICHER. They produce a very significant amount of their 

electricity with coal, absolutely but they also have been growing 

their renewable energy industry in a very significant way and now 

lead the world in renewables and now lead the world in both solar 

and wind. They have also made huge strides in energy efficiency. 

They are a quickly growing country as we know. No dispute that 

they use a lot of coal but the point is, the important is they have 

an accelerated renewable energy industry that is really creating 

really large numbers of jobs. 

Mr. GRIFFITH. Isn’t it their history that they do a lot of things 

that we don’t do? For example I think in your written statement 

on page three you indicate that they have 27 nuclear power plants 

under construction and is that accurate? 

Mr. REICHER. They have—yes they have a large number of nuclear power plants under construction. 

Mr. GRIFFITH. And you also indicated that they have a lot of hydroelectric facilities that are under construction or in the plans, is 

that correct? 

Mr. REICHER. That is correct. 

Mr. GRIFFITH. And isn’t it true that they pay a high price for 

those hydroelectric generated electricity in those plants? 

Mr. REICHER. Mr. Griffith, every energy technology, all of them 

have their pluses and minuses, and along with hydro you get those. 

Mr. GRIFFITH. Isn’t it true that the Chinese have not paid attention anywhere near the level of the United States towards the environmental impact of so many of their facilities and I am thinking 

of their hydroelectric in particular and the functional extension of 

the Three River Gorge Yangtze River Dolphin? Are you familiar 

with that? 

95 

Mr. REICHER. Yes, I am. 

Mr. GRIFFITH. And that would be accurate, is it not? 

Mr. REICHER. There is no doubt that the development of these 

kinds of facilities bring with it environmental problems and there 

is no doubt that the Chinese have not adequately attended to those 

in all cases. I have actually kayaked down those Three Gorges and 

I know exactly what is there and what has been lost, having said 

that, they have been making great strides to become leaders in renewable energy. They are making great strides to improve their energy efficiency and there are increasing calls and I think increasing 

response to improve their environmental performance but they 

have got a long way to go, no doubt about it. But from an economic 

standpoint, they are taking over this clean energy industry in a 

very significant way. 

Mr. GRIFFITH. And from an economic standpoint do you think 

that it is appropriate that we adopt that model because I kind of 

got the impression you were holding them up as an example. 

Mr. REICHER. I am holding them up as an example of a country 

that has put a real priority on clean energy technology research, 

demonstration, development and deployment. I am not holding 

them up necessarily as a model for how you adequately ensure all 

kind of environmental performance but on that front I think there 

are improvements but they need to continue. 

Mr. GRIFFITH. And isn’t it true that we have different standards 

also on human rights and as a part of their hydroelectric program 

they have actually moved 22 million people from one location to another and offered such rich financial rewards as $7 a lot? 

Mr. REICHER. I don’t know that at all. I am sorry. 

Mr. GRIFFITH. But you are aware of having kayaked in that area 

that millions just for the Three River, just for the Three Gorges 

Dam Project had to be moved? 

Mr. REICHER. I don’t know the exact number. Certainly there 

were large displacements of people just as there have been all over 

the world including in our own country when dams get built. Let 

me not sit here today and tell you that hydropower is without its 

major environmental, human and economic costs. All technologies, 

all energy technologies have their pluses and minuses and there 

are significant ones that we know well in this country and that the 

Chinese are experiencing themselves with respect to hydropower. 

Mr. GRIFFITH. And I like Mr. Montgomery’s comments about the 

fact they never take into consideration all the coal workers and I 

wonder how you would address that because it is not just the folks 

working at the power plants who work in coal but it is all the folks 

who provide equipment for the coal mines who make their livelihoods by supplying the miners themselves and then of course the 

miners themselves. And in that economic equation that you have 

made where you hold China up as an example, did you calculate 

in all the lost jobs that we would have in the energy field in this 

country, particularly in the coal fields? 

Mr. REICHER. There is always again got to be pluses and 

minuses. You have got to look at what comes with a move from one 

energy technology to the other. There is displacement. There are 

positives. There are negatives. 

Mr. GRIFFITH. Thank you, Mr. Chairman. 

96 

Mr. WHITFIELD. Yes, sir. 

Mr. Waxman, you are recognized for 5 minutes. 

Mr. WAXMAN. Thank you very much, Mr. Chairman. 

This is a panel of seven people, six of whom underscore and confirm their views that are similar to the chair’s and then there is 

one that has a different opinion and I thank you very much for letting this one witness testify. Yes, Mr. Barton was telling me how 

he always thought the Minority got a third of the witnesses. 

Nevertheless, Republicans are talking about EPA’s onerous, burdensome regulations killing jobs. That is what this hearing is all 

about but EPA is simply requiring when it comes down to it energy 

efficiency when the largest polluting facilities in the country are 

constructed or expanded and significantly increase their pollution. 

That is what the EPA regulations do. 

Mr. Reicher, are energy efficiency improvements at new power 

plants, the melt kilns or the very largest manufacturing facilities 

going to kill jobs. 

Mr. REICHER. Mr. Waxman, I actually think improvements in energy efficiency at plants like this number one, make keep them online longer than they would otherwise operate. Number two, the 

amount of equipment required to improve that efficiency will create 

jobs. Workers will continue to be employed so I think on balance 

if we do this the right way and actually improve the efficiency of 

existing power plants this could be a very net positive economic 

outcome. 

Mr. WAXMAN. I must say from my 36 years in the Congress every 

time we have had an idea proposed to reduce pollution the industry 

representatives all come in and say they will be out of business and 

can’t function. The economy will suffer greatly and then once the 

proposals are put into law they accomplish the goal. They become 

even more efficient and therefore more competitive. 

Mr. REICHER. Mr. Waxman, if I could, Henry Ford, II, commenting in 1966, on seatbelt and safety glass mandates for automobiles said we will have to close down the industry. 

Mr. WAXMAN. It is almost an article of faith among those who oppose any efforts to reduce our carbon pollution that China and the 

rest of the world aren’t taking meaningful action to reduce their 

emissions and they argue why should we be doing anything that 

would disadvantage American companies if we take steps to reduce 

our own emissions. Is this an accurate statement? Is it true that 

China is taking no action to reduce carbon emission? 

Mr. REICHER. China has committed to reduce its carbon intensity 

40 to 45 percent below 2005 levels by 2020, and they are actually 

expected this month, this in March to make that a binding commitment domestically. 

Mr. WAXMAN. Isn’t it true that in China many of the people do 

not speak English? My next question is China is not standing still. 

That is the kind of question of isn’t China bad on human rights 

and therefore we shouldn’t do what they are doing on economic policy? The question then becomes is China standing still? Are China’s 

policies costing China jobs or are their carbon and clean energy 

policies driving Chinese firms to dominate the global market for 

clean energy technologies? What do you think, Mr. Reicher? 

97 

Mr. REICHER. You know, Mr. Waxman, it is not just that they are 

increasingly dominating in the manufacturing of these clean energy 

technologies but in a way even scarier is how increasingly they are 

beginning to dominate in research, development and demonstration. We see large American companies actually setting up their 

largest R&D facilities, Applied Materials, Incorporated, one of the 

largest makers of solar equipment manufacturing in the world is 

setting up a brand new R&D facility in China. 

Mr. WAXMAN. China is taking action to reduce its carbon pollution and to build strong, competitive, clean energy industries and 

the results are massive job gains or massive job losses? 

Mr. REICHER. The Chinese renewable energy industry has grown 

fantastically in terms of jobs. 

Mr. WAXMAN. They are the world’s largest manufacturer of solar 

panels. Their aggressive policies are in its economic self-interest 

and we may not agree with other things they do and we are certainly not interested in their economic self-interest. We should be 

interested in our own but they are acting in their economic self-interest. Mr. Reicher, if we do nothing other than roll back EPA’s 

modest steps to reduce carbon emissions are we at risk at losing 

the clean energy jobs race with China? 

Mr. REICHER. Absolutely, we need to put in place a whole host 

of mechanisms to really regain the lead that we once had. We developed most of this industry so for example I do think the clean 

energy standard makes a lot of sense to put in place. I also think 

we should support the DOE Loan Guaranty Program which has 

been so critical to building the next generation of nuclear power 

plants, building breakthrough renewable energy facilities and we 

should transition that to the Clean Energy Deployment Administration that was adopted by the full house and in the Senate Energy Committee on a bipartisan basis last year. 

Mr. WAXMAN. Thank you. 

Mr. WHITFIELD. Mr. Barton, you are recognized for 5 minutes. 

Mr. BARTON. Thank you and it is a joy to watch the coordination 

between the ranking member and the ranking minority’s witness. 

Is there any question that he didn’t ask exactly the way you wanted it asked, Mr. Reicher? I am sure we will give him some more 

time if we need to do that? 

Mr. WAXMAN. Does the gentleman find fault with any of my 

questions? 

Mr. BARTON. No, I thought I don’t find fault. I just think it is 

a joy to watch the coordination. I think you all handled that very 

well. 

Mr. WAXMAN. Done with the other panelists. 

Mr. BARTON. I was giving you a compliment. 

Mr. WAXMAN. I will accept it. 

Mr. BARTON. Very good. 

Mr. REICHER. Mr. Barton, I have been asked questions like this 

a lot so this is fairly straightforward. 

Mr. BARTON. Thank you. 

My question to anybody on the panel, unscripted, is there a control technology to control CO2 that is in existence today and is cost 

effective? 

Mr. MCCONNELL. My understanding is there is not one. 

98 

Mr. BARTON. There is not one and what about Mr. Cicio, are you 

aware of any control technology that exists to control CO2? 

Mr. CICIO. No, there is no end of pipe technology that is cost effective. 

Mr. BARTON. Mr. Reicher, do you share that? 

Mr. REICHER. Well, the good news, Mr. Barton, is that yesterday 

and this will be relevant to Mr. Shimkus and Mr. Rush, a major 

project was announced in Illinois that would build a carbon capture 

and sequestration facility under the FutureGen Program. 

Mr. BARTON. I am very well aware of that. 

Mr. REICHER. A billion dollar investment in the project and a 

thousand construction jobs and a thousand service sector jobs so we 

are making some progress. 

Mr. BARTON. In and of itself that technology is not cost effective. 

It cost at least 30 percent of the cost of the power generation just 

to sequester the carbon. 

Mr. REICHER. We have got a long way to go no doubt. I guess 

the most cost effective we got one we have is probably trees. 

Mr. BARTON. OK so the answer is by if not unanimous consent 

by consensus, is that there is no existing technology to control CO2. 

Mr. JOYCE. Well, yes it is nuclear power. 

Mr. REICHER. You are talking about capturing CO2. Mr. BARTON. You can burn hydrogen. Hydrogen doesn’t create, 

you know, if you burn hydrogen you get H2O, you get water vapor. 

Nuclear power does not combust, it fissions. So there are technologies out there but if you are going to use natural gas, if you 

are going to use oil, if you are going to use coal, if you are going 

to use even our famous biomass here, you are going to create CO2

and there is no cost-effective way currently to mitigate it. 

Mr. MCCONNELL. But one way to reduce CO2 emissions in our industry, the automobile industry is to have one national standard, 

CAFE that Congress put into place that takes into consideration 

cost. You know, we have to sell these things. It may cost a billion 

dollars somewhere but ultimately what I am the expert on is selling fuel-efficient cars since I was 16 and right now we have three 

agencies, California, EPA trying to tell us all what to do. We need 

one because they are the only one that take into consideration customer acceptability and choice and it doesn’t do the economy any 

good or jobs. Auto dealers employ a million people in this country. 

If you have a product that sits on the lot that doesn’t sell because 

it is not priced right there are many businesses that have been 

shuttered down and gone broke because they are not giving the 

customer what they want and so that is the reason our organization would like to see CAFE implemented. 

Mr. BARTON. Mr. Chairman, I am not sure what my time. I never 

saw the clock start or stop. 

Mr. WHITFIELD. Well, I am going to ask the official timekeeper 

here. 

Mr. BARTON. Do I have time for one more question? 

Mr. WAXMAN. Unanimous consent the gentleman be given 2 additional minutes. 

Mr. WHITFIELD. Without objection. 

Mr. BARTON. Be careful, my side may object to that. The unanimous consent things are shaky sometimes. I have one final quesVerDate Nov 24 2008 12:08 Aug 10, 2011 Jkt 037690 PO 00000 Frm 00104 Fmt 6633 Sfmt 6633 P:\MY DOCS\HEARINGS 112\112-12 030111\112-12 CHRIS
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tion and I appreciate my friend from California and the chairman 

giving me some time. 

Administrator Jackson has testified that greenhouse gas best 

available technology most likely means that you just have to use 

energy efficiency measures. Mr. Cicio, you represent the largest energy users in America. Don’t the companies that you represent already do everything they can to be energy efficient? 

Mr. CICIO. Most certainly the industrial sector spends more 

money and has had more success in improving energy efficiency 

than any of the sectors of the economy. In this case the EPA really 

has it backward. When a manufacturer decided—by the way, if you 

are not aware manufacturing has probably hundreds of thousands 

of combustion processes that are used to produce widgets. When we 

make decisions in what process is used to make a widget we take 

several things into consideration like how many widgets can we 

produce in a time period? What is the cost of a widget? What is 

the raw material flexibility to produce the widget? What is the 

quality of the product with that process? What is the flexibility of 

the manufacturing operating processes, all that criteria in deciding 

what process plus energy efficiency? How energy efficient is the 

process? EPA, unfortunately with the new regulation starts with 

the premise of what is the most energy efficient process and that 

is not going to create a low-cost manufacturing widget process. 

That is too limiting and it is going to lead to higher cost. 

Mr. BARTON. I thank the discretion of the chairman and ranking 

member. 

Mr. WHITFIELD. Mr. Green, you are recognized for 5 minutes. 

Mr. GREEN. Thank you, Mr. Chairman. 

First, I believe that controlling carbon shouldn’t be EPA. The Supreme Court said that. I want Congress to be able to make those 

decisions because we can balance that economics and we tried last 

Congress. It couldn’t get through with the cap and trade. I would 

hope our committee would look at it and that is why I am a cosponsor of the 2-year delay so we can force Congress to deal with it. Although the solution may be just to encourage trees but we would 

probably have to go to the Natural Resources Committee to do that. 

Mr. Cicio, in May of 2010, the EPA finalized the tailoring rule 

and until June 30 of this year only sources subject to the prevention of significant determination for other pollutants will be required to consider greenhouse gases in the permit. From July 1 of 

2011 to June 30 of 2013, new sources the emit at least 100,000 tons 

of greenhouse gases per year or existing sources seeking to increase 

pollution by 75,000 tons per year will be required to obtain the PST 

permits. The EPA will determine on July 1 of 2012, whether it will 

lower the threshold further but it has committed that it will not 

consider any level below 50,000 tons a year. Can you please cite 

how many industrial manufacturers in our country are affected by 

regulations at each of these three levels, 100,000 tons of GHGS a 

year, 75,000 or 50,000? Do you have any idea from your association? I mean I represent refineries so. 

Mr. CICIO. Oh yes, you have a lot of it in your backyard. Unfortunately, I don’t have those statistics and I would be happy to try to 

craft something for you and provide that to you. 

100 

Mr. GREEN. I would appreciate it because our testimony from Administrator Jackson a few weeks ago was that they tailored it so 

it would only cover the largest facilities and just see how many and 

granted they are trying to start with the largest so to see how 

many there are and appreciate you getting it back. 

What sort of federal carbon controlling program if developed by 

Congress and not the EPA could the industrial manufacturers support? 

Mr. CICIO. Well, thank you, that is a wonderful question. We 

have actually addressed that in what we call our Sustainable Manufacturing Growth Initiative because as manufacturers we put together policies that we felt would incentivize and remove regulatory barriers to even greater energy efficiency. And as you heard 

in my testimony, implementation of that program would result in 

10 percent reduction of all greenhouse gas emissions in 10 years 

and even more importantly it would create 3.2 million man-years 

of jobs and almost $500 billion of capital investment in 10 years. 

That is capital investment that is not happening today. So the best 

thing is that it utilizes existing but more energy efficient technology and simply taking it off the shelf and getting it in the 

ground today creating jobs and investment. 

Mr. GREEN. Well and I don’t know who answered our former 

chair of the committee, the ranking member that said nuclear 

would be the solution for some of our carbon controls and we are 

trying to do that because that is one of those solutions because so 

much of our carbon comes from our electricity producing plants. 

Again, I have those plants, I have coal plants but I also have refineries and chemical plants that have another issue. So but I think 

Congress ought to make those decisions. 

Mr. McConnell, California’s fuel economy program exempts until 

2016 automakers who sell less than 60,000 vehicles per year in 

California and manufacturers exempt in California are also exempt 

from every CARB State regardless of how many vehicles are sold 

outside California. After 2016, CARB has intended to regulate 

these vehicles at a lower standard. If the brands you sell are not 

exempt how will that impact on your brand line because I know 

you have both Honda and Acura and I think you have a U.S. model 

too although Honda is also a U.S. model too. 

Mr. MCCONNELL. Well, first of all we believe the State of California should not be setting national energy policy. 

Mr. GREEN. Coming from Texas, I agree. 

Mr. MCCONNELL. So I appreciate your question. I will tell you, 

you are absolutely right and I don’t think some people realize it. 

Selling Honda we are under the California which is just a hodgepodge. There are three different people regulating. What we want 

is one, CAFE which Congress laid out, a single national standard. 

For example, you are right, Honda, Toyota, Nissan, Ford, Chrysler, 

GM are covered. BMW is covered. Mercedes is not covered. 

Hyundai is not covered. Kia is not covered. Porsche is not covered. 

Volkswagon is not covered. Jaguar is not covered. Suzuki, 

Mitsubishi, I could go on and on, and potential that new Chinese 

and Indian automakers would not be covered. That is why under 

CAFE they don’t have all of these crazy exemptions. So we want 

the one national standard. It takes the most important thing to me, 

101 

it take an accountability, they are required that, the EPA is not, 

California is not. Customer acceptability and choice because ultimately the customer is the one that spends its own, the family decides what do I want, what can I afford and if that is in the case 

you will sell more new cars, create more jobs and you will also get 

more fuel-efficient cars on the road which is obviously a big goal. 

Mr. GREEN. Thank you, Mr. Chairman, and the gavel is for us 

not to ask any more questions, not for you all. 

Mr. WHITFIELD. Mr. Shimkus, you are recognized for 5 minutes. 

Mr. SHIMKUS. Thank you, Mr. Chairman. 

This kind of follows-up in a hearing we had 2 weeks ago on the 

environment and the economy. It is my subcommittee but we have 

to accept the fact that the decisions we make or the decision a regulator makes that there is a job aspect that people ought to debate 

and discuss and I come to this with great passion because and 

many of you have seen this before. Mr. Carey, you have. Mr. Cicio, 

you have seen it. This is why we killed Waxman-Markey because 

we made the argument that in ’92 on the Clean Air Act which was 

a legitimate debate on cleaning the air these miners lost their jobs. 

This is just one group of miners at a mine in my congressional district which is closed now, 1,000 miners lost their jobs and by using 

this and the reality is there are a lot of fossil fuel Democrats no 

longer in Congress and do you know why, because they didn’t protect their jobs because of the greenhouse gas movement, the Waxman-Markey threatened to destroy any remaining jobs. 

Mr. Carey, you have testified before. How many coalminer jobs 

are lost in the advent of the Clean Air Act? 

Mr. CAREY. Mr. Chairman and Congressman Shimkus, the idea 

in Ohio and I think when I testified before we looked at the 

amount of tonnage of coal we lessened it by half, take away half 

that miners, those were roughly 3,000 miners, multiply a fact of 

close to 10,000 or 10 for every one coal mining job so 3,000. 

Mr. SHIMKUS. So your staff 35,000 jobs were lost and that was 

in the Clean Air Act which a lot of us would say knock socks particulate matter, some bad stuff that we really needed to get out of, 

you know, out of the air. There is now a debate about greenhouse 

gases and is it a pollutant, is it not and that is why we need to 

move on this legislation to let us to take into the aspect of what 

is the cost, what is the impact on the economy. Why are we so fired 

up about this? Well, here is just one rule from the EPA and they 

are quoted, ‘‘The RIA for this proposed rule does not include either 

qualitative or quantitative estimation of the potential effects of the 

proposed rule on economic productivity, economic growth, employment, job creation or international economic competitiveness.’’ Now, 

Mr. Carey, don’t you think we ought to consider that when we are 

promulgating a rule or a regulation? 

Mr. CAREY. Mr. Chairman, Congressman, yes. 

Mr. SHIMKUS. Mr. Cicio? 

Mr. CICIO. Absolutely. 

Mr. SHIMKUS. Mr. Joyce? 

Mr. JOYCE. Yes. 

Mr. SHIMKUS. Mr. McConnell? 

Mr. MCCONNELL. Without question. 

Mr. SHIMKUS. Mr. Montgomery? 

102 

Mr. MONTGOMERY. Yes. 

Mr. SHIMKUS. Mr. Reicher, do you think the EPA is wrong in not 

considering the economic impact of a proposed rule? 

Mr. REICHER. EPA is required to consider the economic impact 

of a proposed rule. 

Mr. SHIMKUS. This is from the EPA and I just read the quote. 

Let me just quote another one, economic analysis on another proposed EPA rule, let me read in subparagraph 9.2, .3, .3, impacts 

on employment the chapters on benefits, chapter seven and cost, 

chapter eight, point out that, ‘‘The regulatory induced employment 

impacts are not in general relevant for a cost benefit analysis.’’ 

Mr. REICHER. So, Mr. Shimkus, I would just urge you to take a 

look at the Clean Air Act sections, the three sections that relate to. 

Mr. SHIMKUS. And I am going to reclaim my time. I am going to 

reclaim my time, sir. Sir, I am going to reclaim my time. 

My point is we are not disputing knock sock particulate matter. 

We do dispute carbon dioxide. Now, I have got a 1,600 megawatt. 

Does everyone agree that if you raise the price of a commodity 

product that the cost of good sold goes up? 

Mr. CAREY. Yes. 

Mr. SHIMKUS. That is a yes. Mr. Cicio? 

Mr. CICIO. Absolutely. 

Mr. SHIMKUS. Mr. McConnell? 

Mr. MCCONNELL. Yes. 

Mr. SHIMKUS. Mr. Joyce? 

Mr. JOYCE. Yes. 

Mr. SHIMKUS. Mr. Montgomery? 

Mr. MONTGOMERY. Yes. 

Mr. SHIMKUS. Mr. Reicher? 

Mr. REICHER. Ask the question again? 

Mr. SHIMKUS. I asked Administrator Jackson if she really believe 

in the basic economic 101 supply and demand. If the supply is constrained or the cost of the good goes up does that mean that the 

price of the cost of the good goes up? 

Mr. REICHER. Well, if you have to use the same amount of that 

good of the product that has been improved. 

Mr. SHIMKUS. That was a better answer than the administrator 

gave and I appreciate that. 

Mr. REICHER. To improve the efficiency of the manufacturing 

process. 

Mr. SHIMKUS. And which they do, that is the whole debate that 

Mr. Cicio will say. It is not worth the manufacturers’ time, effort 

and energy to run inefficient plants. Now and let me add, I am 

going to run out of time. Mr. Cicio, you said you don’t know of a 

single manufacturer that would not be harmed by greenhouse gas 

and would lose jobs, is that true of both? 

Mr. CICIO. What I said specifically is that I talked to lots, many, 

many manufacturers that have facilities all over the country. I do 

not know and have not heard of one that support the EPA greenhouse gas regulations, yes, sir. 

Mr. SHIMKUS. Thank you. I yield back. 

Mr. WHITFIELD. Mr. Walden, you are recognized for 5 minutes. 

Mr. WALDEN. Thank you very much. 

103 

I just want to ask I think it is Mr. Carey and anybody else that 

wants to respond. Walk us through what you think the cost of 

these regulations are on jobs and the economy in your part of this 

debate because this is something I think people at home care a lot 

about. I mean none of us wants dirty air. Most of us in my part 

of the world in Oregon like renewable energy as long as we kind 

of know what the costs and tradeoffs are although some people are 

getting a little tired of the windmills. 

Mr. CAREY. Well, Congressman, what I think we are debating is 

carbon dioxide and the role of the EPA in regulating carbon dioxide 

under the Clean Air Act so if we take that off the table, if you look 

at Ohio, West Virginia, Kentucky, Pennsylvania. In Ohio, 90 percent, 89 percent of all the electricity off of the grid comes from coal 

base so when you relate that to heavy manufacturing anybody who 

is making a widget understands that one of the large costs of making that widget is energy so ultimately the price of that product 

would go up and if it goes up possibly that product’s production 

would be moved overseas and ultimately then we would lose the job 

there. 

Mr. WALDEN. We are seeing in the northwest is some of the renewable energy begins to feed into the system rate increases of 10– 

15 percent as sort of the cost, additional cost. Now, these are benefit tradeoffs we are talking about here because you have got the 

renewable energy but there is this cost piece. 

Mr. CAREY. No doubt about it, Congressman. What was put in 

place in Ohio was Advanced Energy Portfolio Standard. 

Mr. WALDEN. Right. 

Mr. CAREY. And ultimately what you are seeing now is those 

utilities can’t meet the cost cap that was put in place by the State 

legislature. So the idea that the price is going to go up with those 

renewables is a fact and it is happening. 

Mr. WALDEN. Mr. Cicio. 

Mr. CICIO. Yes, on the subject of cost of regulation, number one 

for those who have not, who want to invest in the United States 

in a manufacturing facility to create jobs, a rule like this is preventing investment. So these are jobs that could have been and 

won’t. Manufacturing is globally mobile. We must produce in countries where we can have low costs and thrive or we die as a company. So but for manufacturing facilities that stay and have these 

higher costs then their competitiveness is threatened and the potential for job loss and plant shutdown. 

Mr. WALDEN. Mr. Joyce. 

Mr. JOYCE. In the permitting process, you know, just adding another layer of permits, you have got, you know, local and State permits. When we, you know, as the tailoring bleeds off and more and 

more buildings come under the control of EPA. 

Mr. WALDEN. Right. 

Mr. JOYCE. And more and more permits, I mean a federal permit, 

any federal work is daunting for a smaller project so we have just 

great concern over the additional permitting in the construction 

side of the house and what we think is a lot of good projects is 

probably the straw that breaks the camel’s back. They just don’t 

get done. So those are huge costs. They are huge costs to jobs and 

job creation in the construction sector. 

104 

Mr. WALDEN. And are those ever quantified? I mean the project 

that never gets built probably never gets the big press so you don’t 

know the loss, right? 

Mr. JOYCE. There is soft cost and, you know, any type of a labor 

paperwork intensive permitting process on a construction job is bad 

right now at any time. 

Mr. WALDEN. Yes, Mr. McConnell, do you want to comment on 

this? 

Mr. MCCONNELL. One of the biggest problems that we have because California has a waiver is they don’t even have to consider 

affordability outside of California. 

Mr. WALDEN. Explain what you mean by that. 

Mr. MCCONNELL. Well, California has ability if they control 14 

other States that signed up with them on so if they decide that 

they don’t want to participate in the national program, go along 

and they take their ball and they go play with somebody else, then 

what happens is they do not have to consider how much it costs 

outside of the State. They only have to consider, they are only looking at the State of California, not even these other 14 States and 

the problem with that is it results in a rationing of vehicles but the 

cost, you have got three different people. You have got to know 

some certainty in the automobile business to design cars in the future. 

Mr. WALDEN. Right. 

Mr. MCCONNELL. How much cost is and they don’t even have to 

consider, the EPA does not even have to consider customer acceptability. 

Mr. WALDEN. Right. 

Mr. MCCONNELL. So they can stack on the cost but quite frankly 

that is the problem and that is the reason, you know, and you go 

back and forth with one national standard that this body has for 

fuel economy. 

Mr. WALDEN. Got it, I want to try and get to the other two. Mr. 

Montgomery, I am running out of time. 

Mr. MONTGOMERY. I think the answer really comes down to there 

is no such thing as a free lunch that in our economy we have every 

incentive is for energy efficiency, using energy wisely and minimizing the cost of production. That is not true in China and that 

is why China can catch up so easily and since there is no free lunch 

if we are expending more of our resources on expensive energy like 

renewables, they are not available for producing the other things 

that people desire to live on and have quality of life. 

Mr. WHITFIELD. Thank you. 

Mr. TERRY. I appreciate that, yes, whatever. 

Mr. WHITFIELD. Your first name is Lee, right? 

Mr. TERRY. Yes, yes. 

Mr. WHITFIELD. Thank you. 

Mr. TERRY. Mr. McConnell. 

Mr. MCCONNELL. Yes, sir. 

Mr. TERRY. I appreciate you being here even though you referenced the CAFE. 

Mr. MCCONNELL. But I was aware of the name. 

Mr. TERRY. But that was a great process because A, it did involve the already existing agency that has the expertise in deterVerDate Nov 24 2008 12:08 Aug 10, 2011 Jkt 037690 PO 00000 Frm 00110 Fmt 6633 Sfmt 6633 P:\MY DOCS\HEARINGS 112\112-12 030111\112-12 CHRIS
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mining fuel efficiency in a very scientific way. Not a political way 

and it was a byproduct of Congress, signed into law by the President. That was very carefully crafted, pushing the automobile industry as far as we could take it. Keeping in mind safety, keeping 

in mind the desire to keep jobs in America and the car industry 

and so that is probably part of my discussion I will have with the 

EPA representative of why the Administration and the EPA now 

wants to duplicate, replace, undo what Congress did. 

Mr. MCCONNELL. Well, we certainly appreciate that. I will say 

that the EPA is wasting millions of taxpayers’ dollars on duplicating NHTSA’s research in fuel economy for tailpipe emissions. 

Mr. TERRY. Probably creating a job. 

Mr. MCCONNELL. It is going to cost a lot of jobs. 

Mr. TERRY. Well, and you had mentioned that California that 

you and Mr. Walden discussed but there was a statement by one 

of the members that there is one national standard but yet that is 

not what I hear and that doesn’t seem to be what EPA is striving 

for. Would you explain? 

Mr. MCCONNELL. Yes, there are, they are regulated by, there are 

three agencies, three laws and three rules, and they have termed 

this, I guess it is a pretty nifty thing they did was they call three 

different standards one national program. I mean it is a fiction. 

You have the correct one national program and that is CAFE and 

it is implemented by NHTSA. 

Mr. TERRY. How does that affect the car dealers and auto manufacturing in the United States? 

Mr. MCCONNELL. Well, first of all to me one of the biggest things 

is you can’t have one State setting the national standard but it affects us because I buy the cars from the manufacturer. They don’t 

consign them to me. I have these cars on my lot. If they are not, 

if you don’t take into consideration what your plan does, CAFE 

does, customer acceptability and choice because the customer is the 

one that makes the decision. They have a choice. They can just 

keep riding in that car they have got and work on them and we 

are super busy in our shop because that is what people have done 

after the recession but it costs a lot of money and it is a lot of duplication. You know, when you are in business and you are planning, what you need is clear, concise guidance and I believe that 

one national standard under CAFE with NHTSA implementing 

with all of the safeguards, I think you will get the CO2 reductions. 

You will get to the goal but you will get to a goal that is realistic 

for the marketplace also. 

Mr. TERRY. That is part of our goal here. All right, I appreciate 

that. 

One last question to Dr. Montgomery because I felt like I was in 

an alternative universe when we were having a discussion about 

green jobs and how great a job that China is doing in manufacturing all this equipment but the reality is it is being manufactured over there because it is inefficient to manufacture it in the 

United States where it was designed and engineered. You answered that or brought that up in your report. Would you expand 

on that? Do you think it is true that China is just doing this altruistically? 

106 

Mr. MONTGOMERY. No and I think there are probably two or 

three points about China. The first one being, it is ironic because 

2 weeks ago I was testifying in the Senate hearing on green jobs 

where one of the witnesses was from the steel workers union which 

had filed the 301(b) trade complaint against China’s internal subsidy practices which were enabling it to produce the wind and solar 

and other equipment that is now being used around the world and 

in the United States, and preventing U.S. firms from getting in 

there. So what we are looking at is not environmental policy for 

China. It is strategic trade policy as it has always been and do we 

want to imitate that? Well, if China is in violation of the WTO for 

subsidizing its industries, we would be as well but the real point 

about all of that has nothing to do with environmental regulation. 

China is not creating those industries by making its own country 

clean. It is creating them by subsidizing their exports as it has always done to create industries. And I think the other point about 

China is that China has a state of institution and I have been writing about this for years that lead China in the past five times the 

energy use for dollar of output as the United States. That is coming 

down but it is coming down because it is so hideously inefficient 

it is in their economic interest to do it. We have a well-functioning 

state of markets here and we don’t have that free lunch. 

Mr. WHITFIELD. Thank you, Mr. Terry. 

Unfortunately, we have votes on the floor. We have three more 

and then that is it for the date but before we go, Dr. Burgess, I 

am going to recognize you for 5 minutes. 

Mr. BURGESS. Thank you, Mr. Chairman. 

Mr. Montgomery, just to stay with you for a moment, we are 

going to hear on the next panel testimony about the health hazards 

of carbon dioxide and do higher energy prices carry with them any 

inherent health risk vis a vis keeping open medical offices, health 

centers and this type of thing. Does that affect the availability of 

medical care or health care? 

Mr. MONTGOMERY. Yes, it does and it is really a problem the 

EPA refuses to do long risk analysis in this area. If we are going 

to look at risks from greenhouse gas emissions, those are highly 

speculative, highly uncertain and anything we do in the United 

States will have only a miniscule effect on them. Carbon dioxide is 

not like ozone. I mentioned ozone in Pasadena. Ozone in Pasadena 

was created in Beverly Hills, blew across and ended up in Pasadena and it produced tremendous health effects. Greenhouse gas 

emissions are mixed in the entire atmosphere and we are not going 

to change them through these regulations in a way that is even 

worth bothering to try to calculate unless we assume all of the rest 

of the world does what we are doing and that is what EPA tends 

to do. And so there is a small health benefit from actions that we 

actually take in the United States but on the other side of it, you 

are absolutely right, higher energy costs make air conditioning 

harder for people to afford. We know that the lack of air conditioning has been the primary reason for deaths during heat episodes in Chicago and other places and it takes a risk, long risk 

analysis which EPA did not do in determining that on balance the 

health risk justified the standards. 

107 

Mr. BURGESS. Of course, I suffer from asthma myself and I know 

what triggers there are. I try to avoid them as best I can but I have 

never associated carbon dioxide with an asthma trigger. It just 

doesn’t work out medically so I appreciate your comments in that 

regard. On the, you know, you talked a little bit about some of the 

multiplier effects. Is there a way to apply the multiplier effect in 

reverse to this type of situation? 

Mr. MONTGOMERY. It is interesting. There is a valid way to do 

it and I think the work with Jorgenson and Wilcoxen and have 

been doing and asking how do health effects of criteria pollutants 

that cause asthma affect worker productivity and they put that 

into their large kind of assessment of not greenhouse gas regulations but the past Clean Air Act regulations like the socks and 

ozone regulation clearly had health benefits. There is a way to 

bring it and in terms of dealing with greenhouse gas emissions, it 

really isn’t applicable because what we are talking about are 

health effects that are dominated by temperature changes in tropical latitudes that lead to increased kind of vector populations that 

cause malaria and such diseases. So it is a global public health 

problem but the solution for it is global public health methods. For 

example, going back to DBP we could wipe out the malaria vector, 

no matter what the temperature was. 

Mr. BURGESS. I see. 

Mr. MONTGOMERY. So there is an ironic point about multiplier 

analysis because if you do the kind of multiplier analysis that 

PERI is doing, they argue quite explicitly over and over again that 

the reason they are getting increased jobs is because greenhouse 

gas policies favor labor intensive industries and they put more people to work that way. Well, if we have a lot of illness in the country 

then businesses would have to hire more workers to hire to replace 

their workers who were sick in order to get the same level of output and so if you applied their multiplier you would get the ridiculous conclusion that who or health actually increases jobs. It is not 

a reasonable conclusion for what you get out of that kind of a multiplier analysis. 

Mr. BURGESS. Dr. Reicher, let me ask you a question if I could. 

You were at Google previously? Is that correct? 

Mr. REICHER. Yes. 

Mr. BURGESS. And when you were there, did your company ask 

the Chinese government to institute the type of greenhouse gas reductions like the cap and trade proposals that we had before this 

committee 2 years ago? 

Mr. REICHER. Could you repeat the question? I am sorry. 

Mr. BURGESS. When you were at Google did you or did Google 

ask the Chinese, did your company, Google, ask the Chinese government to institute any type of mandatory greenhouse gas reductions such as would have been required under the Waxman-Markey 

legislation that we debated in this committee 2 years ago? 

Mr. REICHER. I don’t think the company is in the position to. 

Mr. BURGESS. Well, you support or at least I got the impression 

you support a cap and trade type proposal in this country. Did you 

ever ask the Chinese government to institute a cap and trade proposal? 

108 

Mr. REICHER. I did not ask the Chinese government to institute 

a cap and trade proposal. I am in favor of comprehensive energy 

and climate legislation. There are a whole host of means to get 

there and I think we should get started for economic reasons, and 

for security reasons, and for environmental reasons. 

Mr. BURGESS. But you and Google at no time insisted that the 

Chinese government follow the same type of protocol that has been 

advocated? 

Mr. REICHER. Again, I was not in conversations with the Chinese 

government about greenhouse gas regulations. 

Mr. BURGESS. Thank you, Mr. Chairman. I yield back. 

Mr. WHITFIELD. Well, once again I apologize to you all. I hope 

that you maybe will be able to stay another 10 minutes or so. We 

have three votes on the floor. I don’t think it will take long. We 

will be right back. Hopefully, I think most of our members will be 

back that haven’t asked questions so we look forward to seeing you 

in a few minutes. 

[Recess] 

Mr. WHITFIELD. I call the hearing back to order. 

At this time, I will recognize Mr. Gardner of Colorado for 5 minutes. 

Mr. GARDNER. Thank you, Mr. Chairman, and thank you to everyone for putting up with the schedule today. I appreciate your 

time and certainly your expertise. 

A couple of weeks ago we had Administrator Lisa Jackson of the 

EPA testify before the subcommittee and I want to read a quote 

that she had in our dialog. She said and I quote, ‘‘There are tremendous opportunities in rural America for the economy to continue to grow as it has thrived over the past several years.’’ This 

is just a couple of years ago as the economy had in her belief, her 

opinion has thrived over the past couple of years. So when I asked 

her to clarify and whether she really meant the economy has 

thrived over the past several years her response again and I quote 

was, ‘‘Rural America’s economy has done fairly well as the rest of 

the country has seen the housing market and economy really do 

poorly.’’ Well, in 17 out of the 64 counties in Colorado, they had a 

population decline, all of them rural, most of them rural. And many 

of the counties in my district, they have lost population and I am 

quite disturbed actually that the nature of the assertion made by 

Administrator Jackson really shows how out of touch the administrator is when it comes to the economic well-being of our, my State, 

my district and this country. 

I wanted to get your thoughts quickly on what is happening to 

our economy and economic policies in this Nation when it comes 

specifically to some of the testimony that was given today and some 

of the statements that were made. I wanted to, excuse me, find it 

here. Some of the questions have been offered a little bit about the 

nature of regulations, the impact of those regulations and what it 

means for our rural economies in particular. Do you think the 

greenhouse gas regulations will impact our rural economy, Mr. 

Carey? 

Mr. CAREY. Congressman, yes, I do. There is no doubt about it. 

The greenhouse gas will directly affect jobs. 

Mr. GARDNER. Mr. Cicio. 

109 

Mr. CICIO. Some of my companies are fertilizer producers. About 

75 percent of the cost of making fertilizer is the cost of natural gas 

and these regulations would indeed increase energy costs. 

Mr. GARDNER. Mr. Joyce. 

Mr. JOYCE. Yes, we would see it across the board, particularly 

with the farmers and the livestock sector. 

Mr. GARDNER. Mr. McConnell. 

Mr. MCCONNELL. I don’t think I have anything to add to that. 

Mr. GARDNER. Mr. Montgomery. 

Mr. MONTGOMERY. Yes, I would agree with both that the costs 

of agriculture inputs are going to go up and that cattle is probably 

going to be suffering both because it uses other grains, and I think 

the other part of this is that the EPA regulations are not really, 

I don’t see a way that they are going to include activities like sequestration and other farm-based activities that could potentially 

be profitable as a way of providing offsets for greenhouse gas emissions under a broader and more comprehensive policy. 

Mr. GARDNER. Mr. Reicher. 

Mr. REICHER. Some of those impacts will be positive and some 

of them will be negative. If you are in the wind business it could 

be quite positive. If you are in the natural gas business it could be 

quite positive. 

Mr. GARDNER. What if you are in farming and you grow crops? 

Mr. REICHER. It all depends on what you are farming. The opportunities around biomass for power for fuels are very significant and 

so again like so many answers to so many of these questions today, 

Mr. Gardner, depends on the specifics. 

Mr. GARDNER. Mr. Cicio, a statement by the EPA was made earlier that said when it was talking about he pays authorities to control carbon emissions that that bill would deprive American industry of investment certainty and new incentives for upgrading to advanced to clean energy technologies. Do your members feel deprived and that they are not willing to make investment because 

of this regulation, the lack of this regulation? 

Mr. CICIO. No, I have not heard anyone say that. 

Mr. GARDNER. Thank you. 

Mr. Reicher, interested in your comments on the nuclear power 

and I believe you talked about the need to actually improve energy 

permitting projects and also nuclear power permitting. What specifically do you think we could do to increase the presence of nuclear power development and to improve energy project permitting 

and site? 

Mr. REICHER. Well, Mr. Gardner, I think one of the challenges 

that advanced nuclear faces, advance renewables face, a whole host 

of these technologies face is how you get the first large-scale commercial plant financed and built in this country. It is fairly 

straightforward to get the little prototype built, venture capital. 

Mr. GARDNER. Well, finance is more than permitting. You specifically said permitting. 

Mr. REICHER. Oh you said well, it is two things. One is we have 

got to get those first-of-a-kind commercial plants built. That is 

where I think the clean air and the deployment administration and 

its ability to finance. 

Mr. GARDNER. On nuclear power, what can we do for permitting? 

110 

Mr. REICHER. Permitting, there is to issue them. The Nuclear 

Regulatory Commission has taken quite a look at ways to streamline permitting. I am not, I don’t know the details of the changes 

they propose but there are a whole host of things but you are not 

going to get them built if you can’t get them financed and that is 

the real issue at this point. 

Mr. GARDNER. Do you think we should include hydropower as 

part of the clean energy standard? 

Mr. REICHER. I think a clean energy standard should be very 

broad and should include all the renewables and it should include 

energy. 

Mr. GARDNER. Including hydropower? 

Mr. REICHER. Yes, including hydropower. 

Mr. WHITFIELD. Mr. Inslee, you are recognized for 5 minutes. 

Mr. INSLEE. Thank you. 

I want to ask Mr. Reicher about the public’s belief about this 

issue of whether or not we should stop the federal government from 

doing its job. There is basically an effort here which is pretty incredible to me to tell the Environmental Protection Agency they 

can’t enforce the provisions of the Clean Air Act which is like telling the FBI they can’t arrest terrorists or cops that they can’t arrest bank robbers. We are intentionally—folks around here want to 

intentionally disable the ability of the government to do its statutorily mandated job. To me that is pretty amazing so I wondered 

what the American people thought of that and we did a little looking and the people I talked to where I live in the State of Washington certainly don’t think by huge majorities the people I talk to 

don’t think that is a very good idea to tell the federal government 

it can’t do its job, to intentionally shackle it and put its handcuffs 

on and let polluters pollute. So to check out whether I am just talking to the wrong people, I did a little research and to what the polling would disclose Americans think. It was pretty timely because 

the poll came out by the public policy polling, NRDC, just the other 

day. It showed that 68 percent of Americans were opposed to delaying EPA reducing carbon pollution by enormous majority, 68 to 32 

percent. You can’t—it is hard to get 68 percent of Americans to 

agree that baseball is the American sport but we got 68 percent of 

Americans. Then you look at if you do it on a more grandular level 

I saw another poll done by I believe the sustainable business or I 

read about it at sustainablebusiness.com of 16, excuse me, 19 congressional districts asking a very similar question after asking both 

sort of arguments on both sides of this very fair poll showed that 

in 19 congressional districts represented by Republicans, in those 

Republican districts 66 percent of people including 45 percent of 

Republicans and 62 percent of Independents found that they didn’t 

want the EPA to be disabled. There is a third poll, I don’t have the 

results right in front of me but very similar results by almost twoto-one margins Americans didn’t want to disable the federal government from doing its job to reduce pollution. Now, I have some 

theories as to why Americans believe that. I think it is because 

Americans are optimistic and know that we can do innovations and 

create new jobs associated with these new ways of reducing pollution but, Mr. Reicher, I just wondered if you wanted to express 

thoughts about why you think Americans feel so strongly that peoVerDate Nov 24 2008 12:08 Aug 10, 2011 Jkt 037690 PO 00000 Frm 00116 Fmt 6633 Sfmt 6633 P:\MY DOCS\HEARINGS 112\112-12 030111\112-12 CHRIS
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ple are out to lunch who want to disable the federal government 

here. 

Mr. REICHER. Well, Mr. Inslee, I think it starts with the fact that 

there is a basic understanding that climate is going to have serious, serious impacts on human health and the environment and 

you start with that presumption as we did with all the other sort 

of pollutants we have been dealing with and that motivates people 

to end of saying, you know, we want our government to take action. 

I go from there to say the Supreme Court said figure out whether 

carbon is a pollutant. The EPA took that and figured out that it 

was and said what are we supposed to do when it is determined 

to be pollutant? We are supposed to go out and begin to put some 

controls on it so I think the public recognizes that we are dealing 

with a serious risk. The Supreme Court has weighed in. The relevant agency has weighed in. Plus, and this is important, our investment community Wall Street and Silicon Valley has said figure 

this out. If you want money to stay in this country for clean energy 

investments, figure out whether or not you are going to be regulating this. Figure out whether you are going to put energy standards in place, pollution standards in place to deal with this carbon. 

As long as we are not going to make that decision, we are going 

to see massive amounts of capital flow to other countries where 

they have made that decision. 

Mr. INSLEE. So let me suggest one more reason huge majorities 

of Americans think it is a bad idea to disable the EPA, business 

people believe this. In the last 2 weeks I have had two business 

groups in the State of Washington come to me and tell me what 

climate change is doing to their business. The people grow oysters 

and clams, their industry, their industrial model is at risk today 

because of the ocean associated with carbon dioxide pollution. They 

want a solution to this problem. They are losing their industry in 

the west coast of the United States. This is a long time industry 

that is important in Puget Sound where I come from. This morning 

I had the berry growers from the northwest come to tell me and 

tell me that 50 percent of the actually it was grapes were essentially lost because of it is either a fungus or a bacteria associated 

with changes in climate they believe and they were asking me for 

help to solve this problem. If we don’t deal with this problem we 

are going to lose jobs. This is a job creation engine like China gets 

and we don’t and I hope we will wake up in the next 4 seconds and 

thank you, Mr. Reicher, thank you. 

Mr. REICHER. Thank you, Mr. Inslee. 

Mr. WHITFIELD. Thank you, Mr. Inslee. 

At this time, I will recognize Mr. Bilbray for 5 minutes. 

Mr. BILBRAY. Thank you. 

Mr. McConnell, you made a reference to CARB and in fact I 

served 6 years on CARB. You made reference to the air resources 

board in California and I served 6 years there and 10 years on 

ARB district, two stints as chairman and I would like to remind 

you that it was California that told Washington in 1992 that the 

mandate that methanol was put in our fuel stream was not an environmental option. It was environmentally damaging. So Washington sometimes gets it wrong and we pointed out that people who 

claimed to be environmentalists in Washington aren’t necessarily 

112 

going to depend on in the long run and I think that experiment history is going to show is a major, major mistake and I wish the people that were so self-righteous then will now look around and say 

maybe we ought to try to get our science down first before we start 

making claims. And I think MTD and the methanol in the fuel line, 

you know, has been proven again and again that the so-called experts then in Washington, D.C. were behind this at CARB. 

But if I could propose to you, if the federal government could 

pass a law today that would improve your fuel mileage and reduce 

your emissions by 22.6 percent, what would be your industry’s response to that? 

Mr. MCCONNELL. Well, I don’t represent the manufacturers. 

Mr. BILBRAY. But as someone selling the product. 

Mr. MCCONNELL. Well, I believe that California should have a 

voice just as but no more than any other State, provide data, political clout that they have but we feel like that we don’t have a problem with reducing CO2 emissions. We do not. 

Mr. BILBRAY. OK, let me interrupt you. Look, Mr. McConnell, if 

I could tell you again that I have a study that shows 22.6 percent 

reduction in emissions and fuel mileage and it will not cost one 

cent to produce a car or no one more cent to produce a car. If I 

could show you that study, would you be willing to say maybe we 

ought to consider implementing these mandates if it doesn’t cost 

one more cent to produce an automobile in this country? 

Mr. MCCONNELL. I would be happy to do look at the study. What 

needs to happen though is CAFE is laid out. 

Mr. BILBRAY. Let me go to CAFE. Let us go to CAFE, are you 

talking 100 percent of fossil fuel? Are you talking CAFE standards 

with 10 percent ethanol? Are you talking 10 percent algae fuel? 

What fuel mixture here because we have a lot of fuel mixtures here 

and that is one thing when we talk about CAFE that the renewable 

fuel mandate has actually reduced the ability for automobiles to get 

mileage, something that nobody wants to talk about in this town. 

But let me go over to you, Mr. Reicher. Mr. Reicher, if we could 

mandate 22.6 percent more fuel efficiency and emissions, wouldn’t 

you say that is something that we should be looking at especially 

if we claim we are in a crisis? 

Mr. REICHER. Sounds like a smart way to proceed. 

Mr. BILBRAY. The problem is what it does it is not a mandate on 

the private sector. It is a mandate on government. Traffic management, inappropriate traffic management, every time you stop at a 

four-way stop, you remember you are polluting five-times more 

than if you were allowed to roll through with a yield sign. This 

town is quick at pointing fingers at you and your industry but 

those of us in government will walk away from something that 

studies have shown could be major breakthroughs but because it 

is easier to be against the business community and not the other 

way. And as somebody who has worked on these issues for decades, 

I am frustrated with the people that come out of Washington claiming that they are going to save the world by turning corn into fuel 

or, you know, taking methanol and converting it over, and not looking at the longer impact. And I am sorry, I hear you attack CARB, 

the CARB that I see today coming out is a political extension. We 

have been, our science has been pretty darn good. 

113 

One of the things our scientists want to talk about is, Mr. 

Reicher, the last I checked with the UN our—the Chinese economy 

is about one-tenth of our economy, right? 

Mr. REICHER. I don’t know the specific statistics. 

Mr. BILBRAY. OK, well let us just say this China is implementing 

20 nuclear power plants. We are implementing two. Does that well, 

let me just say on that, I can give you that number and the executive secretary of the UN National Framework and Convention on 

Climate Change says he has not seen a credible scenario that does 

not have nuclear as a major part of their mixture. In fact, even the 

report by the Intergovernmental Panel on Climate Change states 

that a robust mix of energy sources including nuclear must be included. Now, do you believe that two out of an industry that is ten 

times as big as China is a robust commitment to implementing 

clean air strategies with nuclear power? 

Mr. REICHER. Mr. Bilbray, I came in and testified in my opening 

statement that we should adopt a clean energy standard that includes most of these technologies. 

Mr. BILBRAY. Mr. Chairman, may I ask for 1 more minute on this 

item please just to follow-up? 

Mr. WHITFIELD. Without objection. 

Mr. BILBRAY. Mr. Reicher, the State of California does not allow 

nuclear power today and my colleagues at the ARB are not allowed 

to implement a robust nuclear program while we are talking about 

the climate being in crisis. My concern is my colleagues in California claim they care about the environment and are willing to attack the private sector but are not willing to do things like force 

government to change the way it operates so we clean up our act. 

Your comment on that? 

Mr. REICHER. Mr. Bilbray, in that regard I would urge you to 

take a careful look at a national clean energy standard because it 

could deal with some of these inconsistencies that we have State 

to State over a whole range of technologies. That is one way to proceed if you are bothered by the inconsistencies State to State, take 

a look at what Mr. Barton supported in his amendments last year. 

Mr. BILBRAY. Wouldn’t you agree that it is one thing to give a 

loan guaranty? It is another thing not to allow it to be permitted, 

for government to outlaw it. In fact, let me say this as somebody 

who has worked on environmental regs, we talk about a Manhattan project for energy independence in this country. Ladies and 

gentlemen, the Manhattan Project would not be legal under existing law. You couldn’t even site the test site because of Endangered 

Species Act. That is the kind of barrier that those of us in Washington who want to address this crisis have to be willing to stand 

up and address. Thank you, Mr. Chairman. 

Mr. WHITFIELD. I recognize the gentleman, Mr. Olson from Texas 

for 5 minutes. 

Mr. OLSON. I thank the chair. 

Mr. Joyce, my first question is for you. First I want to thank you 

for being part of the economic engine that drives America, small 

business. 

Mr. JOYCE. It is my pleasure. 

Mr. OLSON. In your testimony you said that the environmental 

regulations have cost your family business upwards of $150,000. 

114 

How many more people could you hire if you didn’t have that excessive cost and more importantly, how many of your current jobs 

are at risk right now if greenhouse gas regulations become law? 

Mr. JOYCE. We can hire two additional people if we weren’t doing 

those as required of us to do but our bigger concern is the uncertainty and the misinformation surrounding what is going on with 

the EPA regulations currently. We are so concerned because right 

now they are starting big but we know that will back up and we 

understand the difficulty of permitting projects even at the State 

level so every time something makes a project difficult, it makes 

it harder to get it financed. It is very difficult to finance them now 

so we think more and more projects theoretically could be taken off 

the table. We have great concern about that but what our bigger 

concern is and my concern as a citizen is we are in an energy crisis 

and we need to look at every single option out there to create more 

energy. And, you know, again I said I hung my hat on green energy 

and we do a lot in that arena but it doesn’t work without new coal 

plants, without new nuclear plants, without creating additional energy because we are still birthing babies, we are still graduating 

people from college, we are still building houses and we want to be 

a manufacturing factor. So I sit here and I think to myself where 

is the outrage? Where is the outrage and the Chinese are going to 

corner the energy market sooner or later and we are not taking 

steps to create power now and electricity is a key piece of it. And 

I want to see our Nation look at ways to get every option on the 

table now and that is our concern. 

Mr. OLSON. Yes, sir, what we call up here the all-vote plan. 

Thank you for that answer, sir. 

Mr. Montgomery, a question for you, sir. EPA Administrator 

Jackson often touts the creation of jobs by implementing new green 

control technologies. You have been in this field for about 40 years. 

Will the mandate to comply with greenhouse gas regulations 

produce a net job growth here in the United States as Administrator Jackson claimed, yes or no? 

Mr. MONTGOMERY. No. 

Mr. OLSON. Do you want to elaborate on that? 

Mr. MONTGOMERY. OK, it will certainly produce a shift. It will 

produce a shift or resources in industrial activity toward producing 

that pollution control equipment but it will be taking those resources away from producing other things that people demand and 

contribute to our standard of living. It is not to say it might not 

be worth it if you judge that the benefits are large enough but it 

is clearly going to be a cost. At best, it is going to involve moving 

people from one kind of job to another and not creating net new 

jobs but on top of that it is going to be a drag on productivity 

growth and investment which is going to slow the rate of growth 

in the economy overall. And this is something that has been seen 

by economists who have studied this going all the way back to 

work that Jorgenson and Wilcoxen did 20 years ago looking at the 

effect of the Clean Air Act amendments themselves. They found 

that yes, there were some industries that were doing quite well 

producing that pollution control equipment but the regulations 

were essentially a tax on capital investment so it slowed down capital investment. It reduced the growth in worker productivity beVerDate Nov 24 2008 12:08 Aug 10, 2011 Jkt 037690 PO 00000 Frm 00120 Fmt 6633 Sfmt 6633 P:\MY DOCS\HEARINGS 112\112-12 030111\112-12 CHRIS
115 

cause unlike the Luddites who do green job studies, they actually 

know from looking at history that the primary driver of productivity growth is increasing capital investments to make workers 

more productive. So all of those processes are slowed down by the 

higher costs that are imposed on the economy by the regulations 

so that overall there is a depressing effect on our rate of growth 

and internally there is some shuffling around of jobs from doing 

one thing to doing another. 

Mr. OLSON. So no new green technologies, thank you for that answer and my final question is going to be for Mr. Carey. Mr. Carey, 

coal provides about 45 percent of our electric power. If the EPA 

regulations were to go forward as planned from what your testimony earlier today that is about 75 gigawatts that are at risk? 

Mr. CAREY. Within that range, Congressman. 

Mr. OLSON. How would we replace the capacity of the coal industry? 

Mr. CAREY. That is the 64,000 not gigawatt question but $64,000 

question, Congressman. There is no way. 

Mr. OLSON. Any idea how many jobs it is going to cost us? 

Mr. CAREY. Well, if we are looking at a 70 percent reduction in 

the amount of coal, it is a 70 percent reduction in the amount of 

coal jobs with a multiplier of 10. So we are in the hundreds of thousands. 

Mr. OLSON. Thank you for that answer. 

Mr. WHITFIELD. Mr. McKinley of West Virginia, you are recognized for 5 minutes. 

Mr. MCKINLEY. Thank you, Mr. Chairman. It has been a long 

day and we have broken twice. It sounds a little bit like Groundhog 

Day. We are back here again for the third time to try to get 

through all of this. After being towards the end of this questioning 

it appears a lot of the questions have been asked but so I just want 

to kind of summarize where I am so when I go home tonight. It 

appears that there seems to be a consensus that energy costs are 

going to rise if we have the greenhouse gas regulated under the 

Clean Air Act. There is also a consensus that that will have a negative impact on industry, manufacturers. If they are negatively impacted, we are going to lose jobs. I got a letter and there were comments made that this is just a Republican thing but here’s a letter 

from the American Iron and Steel Institute and it is a long letter 

so I am not going to go through it. I am going to ask that it be 

put into the record. 

Mr. WHITFIELD. Without objection. 

[The information appears at the conclusion of the hearing.] 

Mr. MCKINLEY. Thank you. And he goes on in his letter about 

the, just talks about the new regulations will create permitting obstacles in investing in new and renovated facilities, impose significant additional cost on domestic steel producers. The development 

of new environmental regulatory proposals across the country it is 

obvious will have a deleterious effect on them. But he goes on to 

say the unprecedented speed of the EPA’s effort to regulate the 

greenhouse gases under the Clean Air Act threatens serious economic disruption. The greenhouse gas emissions under the Clean 

Air Act will create disincentives to invest, potential for new project 

construction delay and increased litigation risks. He goes on to say 

116 

for the Institute that it is not partisan. This is business. This is 

what it is all about here. We have 15 million Americans out of 

work today and we are letting the EPA continue to cause this kind 

of challenge. And he goes on to say it will raise operating costs 

which will place our American steel manufacturers at a competitive 

disadvantage while allowing overseas competitors to continue to increase their missions. The result would be limited environmental 

gain but significant economic challenges including further elimination of valuable American manufacturing jobs especially for energy-intensive, trade-sensitive industries. 

I don’t understand. I have only been here in Congress for not 

even 60 days and I don’t understand why they don’t get it. To me 

it is axiomatic. This is fundamental economics 101. Why is it that 

they don’t get it around here? Am I the one out of step, Mr. Cicio? 

Mr. CICIO. I have very diverse energy-intensive manufacturers 

including some integrated steel companies plus recycle steel companies and I can, there are lots and lots of stories of truthful events 

where these steel companies have had to shut facilities down because of a tenth of a cent increase in the price of electricity. There 

are chemical companies that compete on a global scale with companies halfway around the world where they compete for a tenth of 

a cent per pound of a product. We are gripped and this is what I 

said in my testimony, our country and the manufacturing sector 

are gripped in competition and many times our competition are 

governments wrapped around companies but they are governments 

and they are subsidized. 

Mr. MCKINLEY. But my question, why don’t they get it? Why 

doesn’t when we have so many people out of work, we are threatening possibly one more time another round of employment losses 

at a time when we need our energy, coal, nuclear, all and we are 

threatening ourselves. Yes, sir? 

Mr. MONTGOMERY. This is my personal opinion and but it is this 

I think is a very good example of how Congress is not working well 

and it is a very good example of how hard it is to take on a big 

issue. I would say that the first lesson in environmental economics 

is you have to compare the cost of a regulation to the benefits that 

you get. Well, when the costs of a regulation are large and the benefits are in the future, it is very hard to convince your constituents 

that that is a good thing to work for so the analysis instead of 

being an objective description of what is likely to happen turns into 

a claim this isn’t a hard decision after all. There aren’t any costs 

because they go away and I am afraid that that is how I see the 

debate being destroyed here. 

Mr. MCKINLEY. Thank you. 

Mr. WHITFIELD. Mr. Scalise, you are recognized for 5 minutes. 

Mr. SCALISE. Thank you, Mr. Chairman. 

The theme of today’s hearing is the greenhouse gas emissions 

and specifically the impact of these regulations on American jobs 

and I think when we talk about American jobs we had a hearing 

a few weeks ago. It has been referenced a few times with EPA Administrator Jackson and then we had a panel right after Administrator Jackson spoke and it was a panel of business people, employers in this country and it was like there was parallel universe. You 

had the head of EPA talking about how the regulations that she 

117 

is implementing are creating jobs and then you literally had employer after employer after employer talking about those very EPA 

regulations and the uncertainty associated with it are costing 

American jobs. And so maybe what the EPA Administrator Jackson 

is referring to were the jobs she is creating in China, in India, in 

other countries because when you talk to employer, they are actually looking at real job losses. There was a company, a major steel 

manufacturer that talked specifically about the burdensome permitting requirements and rising energy costs, increasingly industrial projects are no longer even being considered for development 

in the United States. It doesn’t mean they are not being considered. They are just not being considered in the United States. They 

further went on to talk specifically about one of their projects, ‘‘Due 

to the uncertainty created by these regulations, we made the difficult decision to delay the $2 billion investment also delaying the 

creation of 2,000 construction jobs and 500 permanent ones.’’ This 

was one company and we have heard this story over and over and 

over again, jobs that are leaving our country. 

And I want to ask Mr. Reicher, you know, we have heard testimony in the past over this issue about carbon leakage and the fact 

that let us say you are not building a steel mill here in the United 

States. You are going to build it in Brazil which is a viable option 

when people are looking at where they are going to build it. So if 

they build it in Brazil you actually have maybe four times the 

amount of carbon and greenhouse gases emitted than if you would 

have built that plant today under current environmental regulations in the United States, not to mention the job loss. So first, do 

you recognize one, there is real job loss going on out there in America? And number two, that because of these regulations by EPA 

you are actually emitting more carbon because they are building 

these plants in other countries that actually have lower standards 

than us? 

Mr. REICHER. Well, Mr. Scalise, responding to you and Mr. 

McKinley, I think this issue of why ‘‘they don’t get it’’ is first, I 

think there are serious issues here with human health and the environment and it can flow from these greenhouse gas emissions. 

Secondly, there are in fact serious economic issues. We are losing 

vast investment in this country. 

Mr. SCALISE. Because of these regulations and the uncertainty. 

Mr. REICHER. To countries where they have in fact decided to 

control the emissions of greenhouse gases and other pollutants, to 

the EU, increasingly to China, to places where they are taking 

these issues seriously. 

Mr. SCALISE. Well, what you are saying they are taking them seriously. They actually emit more greenhouse gases to do some of 

these manufacturing jobs in those countries like China. Do you recognize that? 

Mr. REICHER. Fair question so all the more reason why we have 

got to step up to it and the rest of the world does as well. That 

is why we have international green age. That is why we go and negotiate these. 

Mr. SCALISE. But do you recognize that the uncertainty though 

of what is going on in this country is costing American jobs? Will 

you at least acknowledge all of these, business after business? 

118 

Mr. REICHER. Certainly, the uncertainty on Wall Street are moving their money away from this country to countries where in fact 

they are putting controls on greenhouse gas emissions. 

Mr. SCALISE. Well, Wall Street has done enough damage to our 

economy already. 

Let me ask Mr. Montgomery something because I am on limited 

time and I apologize but, Mr. Montgomery, I am not sure if you 

read there was a study about Spain’s experiment with this scheme 

of cap and trade, greenhouse gas emission regulation where they 

said they are going to create all these green jobs. What they found 

out later is for every green job they created they lost 2.2 jobs but 

then when they dug deeper into that 90 percent of those jobs they 

created were part-time jobs. So in essence for every green job they 

created they lost 22 full-time jobs in their economy. I am not sure 

if you are familiar with that Spain study or if you want to comment 

on that? 

Mr. MONTGOMERY. Yes, there have been some criticisms of the 

study but I think it has made some very good points. One of them 

is just how phony the accounting for green jobs can be depending 

on what you are counting. The second one is that yes, the cost of 

the mandate or a subsidy is borne by the country that does it and 

Spain decided to put on huge subsidies and that both decreased 

their own competitiveness across the board and it attracted a lot 

of equipment to be built elsewhere. 

Mr. SCALISE. Like we are seeing here. 

And I only have got a few seconds left and I want to ask Mr. 

Joyce something because you talked about in your opening testimony and then I don’t know if this was on behalf of NFIB or just 

your small business but you referred to a recent study by the U.S. 

Small Business Administration that found that the total cost of 

regulation on the American economy is $1.75 trillion per year and 

then further that the study reaffirmed that small businesses actually bear a much larger percentage. I think what, over 30 percent 

more of the cost than large businesses so the uncertainty in these 

regulations are killing small businesses primarily which is the real 

heart of our job creation in this country. I want to ask you to comment further on that. 

Mr. JOYCE. Yes, absolutely because they are smaller, you know, 

smaller network of sales to diversify the cost of implementing 

whatever the regulation is so little businesses are widely more impacted with these regulations than big ones who have got, you 

know, staffs that run it and they just blend it in there and it goes 

away. This hits the little businesses very, very significantly. 

Mr. SCALISE. Thank you, Mr. Chairman, I yield back. 

Mr. WHITFIELD. I thank you and I want to thank the witnesses 

very much. We appreciate your testimony and I know you didn’t 

plan to spend this much time with us but we hope maybe you will 

come back someday and this panel is dismissed. 

Mr. BILBRAY. Mr. Chairman. 

Mr. WHITFIELD. Yes. 

Mr. BILBRAY. I want to thank you for having this hearing and 

let me just point out. 

Mr. WHITFIELD. We are not through. 

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Mr. BILBRAY. I know I just before they leave though I think it 

is great to point out for 4 years there was an effort to green the 

Capitol and try to reduce our footprint here but in 4 years Congress is still burning coal to fire up the lamps over our head and 

I think that if that is any indication of the progress we have made 

it is just good luck. 

Mr. WHITFIELD. Well, of course I like coal myself but we will call 

at this time on the second panel. we have Ms. Gina McCarthy who 

is the assistant administrator for the Office of Air and Radiation 

at the U.S. Environmental Protection Agency and, Ms. McCarthy, 

we appreciate you being us today. I trust that you have enjoyed 

yourself as much we have already and I will tell you we have 

adopted a new policy and we are supposed to start hearings at nine 

o’clock or 9:30 and we have no votes so that we can go straight 

through before anyone has to leave. So unfortunately it didn’t work 

out that way today but we do appreciate your patience and your 

being with us very much. 

Ms. MCCARTHY. Thank you, Mr. Chairman, it is nice to be here. 

Mr. WHITFIELD. And with that, we will go on and recognize you 

for your 5 minute opening statement, Ms. McCarthy. 

STATEMENT OF GINA A. MCCARTHY, ASSISTANT ADMINISTRATOR, OFFICE OF AIR AND RADIATION, UNITED STATES 

ENVIRONMENTAL PROTECTION AGENCY 

Ms. MCCARTHY. Thank you very much and again I want to thank 

the chairman and the ranking member, Rush, for inviting me here 

and the members of the committee to testify on this important subject. 

Let me get started. I know you have listened to a lot of testimony 

so I will be as crisp as I can and then we can get to questions and 

answers. 

But EPA is just starting to update existing Clean Air Act programs in order to address greenhouse gas emissions. The Clean Air 

Act tools that we have been using are exactly the same Clean Air 

Act tools that have been responsible for achieving dramatically 

cleaner air and important public health benefits at reasonable cost. 

With its 40 year history of success the Clean Air Act continues to 

be one of this country’s greatest bipartisan achievements. Today 

EPA is releasing a peer review study of the cost and benefits of the 

Clean Air Act since 1990. It demonstrates both the Clean Air Act’s 

tremendous public health benefits and well how cleaner air 

strengthens the economy. In the last year alone, programs implemented pursuant to the Clean Air Act amendments of 1990, are estimated to have reduced premature mortality risks equivalent to 

saving over 160,000 lives, to have spared Americans more than 

100,000 hospital visits, prevented millions of cases of respiratory 

problems like asthma, to have enhanced productivity by preventing 

13 million lost workdays, and have kids healthy and in school 

avoiding 3.2 million lost school days due to respiratory illnesses 

and other diseases that are either caused or exacerbated by air pollution. 

EPA can’t monetize all the benefits from recent Clean Air Act 

regulations but to the extent that we can this study tells us that 

the Clean Air Act provides $2 trillion in benefits in 2020 alone. 

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That is over $30 in benefits for every single dollar that we spend. 

This is a tremendous value for the American people. Most of the 

rules that gave us these huge gains in public health were adopted 

amidst claims similar to what we are hearing today, claims that 

they would be bad for the economy and bad for employment. Some 

claim that the Clean Air Act amendments of 1990 themselves 

would cost at least 200,000 or up to even 2 million jobs. In contrast 

to all of those dire predictions, history has shown again and again 

that we can clean up pollution. We can create jobs and we can grow 

our economy all at the same time. 

Since 1970, air pollution has actually declined 63 percent while 

at the same time the economy has grown 204 percent. Discussions 

of job impacts often overlook the jobs that come from building and 

installing pollution control equipment. The Institute for Clean Air 

Companies estimated that over the past 7 years the implementation of just one rule, the Clean Air Act interstate rule resulted in 

200,000 jobs in the air pollution control industry. In a recent Wall 

Street Journal op-ed, eight major utilities that will be affected by 

our greenhouse gas regulation said that, ‘‘Contrary to claims that 

EPA’s agenda will have negative economic consequences, our companies experience complying with air quality regulations demonstrates that they can yield important economic benefits including 

job creation while maintaining the liability.’’ 

The Clean Air Act has also helped spark world-class innovations 

in the United States. For example, EPA vehicle emissions standards led to the development and application of a huge range of 

technologies like catalytic converters, onboard computers, fuel-injection systems, even unleaded gasoline. These innovations are now 

found throughout the global automotive market. In the vehicle 

emission control industry now employs approximately 65,000 

Americans with domestic annual sales of $26 million. 

The environmental technology and services industry employed 

1.7 million workers in 2008, and that taps into the global market 

that is worth over $700 billion, and that is a market the size of the 

aerospace or the pharmaceutical industry. Globally, America can 

compete and lead in, I am sorry, can compete and lead in the environmental and clean energy sectors but only if we take steps at 

home to continue to innovate. As we drive towards cleaner air and 

clean energy we need to challenge innovation and challenge technology excellence. 

We are now starting to achieve greenhouse gas, address greenhouse gases by applying Clean Air Act regulatory tools that have 

been used successfully now for 4 decades. EPA is compelled to do 

so by the Clean Air Act, the Supreme Court’s decision, as well as 

sound science. These greenhouse gas tools that we are going to use 

require the agency always to take cost into consideration and they 

will allow the agency to move forward using commonsense, reasonable, measured requirements. 

The first greenhouse gas rule EPA issued is already demonstrating how practical regulations can make sense for the economy. Last April, EPA and the Department of Transportation completed harmonized national standards to reduce greenhouse gas 

pollution from new cars and trucks. The vehicles sold in model 

years 2012 to 2016 will save 1.85 billion barrels of oil while reducVerDate Nov 24 2008 12:08 Aug 10, 2011 Jkt 037690 PO 00000 Frm 00126 Fmt 6633 Sfmt 6633 P:\MY DOCS\HEARINGS 112\112-12 030111\112-12 CHRIS
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ing greenhouse gas emissions by 962 million tons. The rules were 

supported by both the auto workers as well as the auto manufacturers who recognize that these standards help them stay competitive in a global marketplace where fuel efficiency increasingly matters. We will also save consumers money. A 2016 model year vehicle will save you $3,000 over the life of that vehicle. 

The regulatory focus on improved efficiency isn’t unique just to 

motor vehicles. EPA is also focusing on energy efficiency as the preferred method of meeting greenhouse gas permit requirements for 

power plants and large industrial facilities. And let us all be clear, 

these new greenhouse gas permit requirements apply only when a 

facility is being a new facility is being built or when a company is 

making major modifications at an existing facility. The universe for 

these greenhouse gas permits are large greenhouse gas emitters 

but the universe is very small and it is manageable to achieve. 

Leadership in new technologies combined with healthier workers 

and fewer air-related health effects have laid the foundation for robust, long-term economic growth and the employment that comes 

along with it. We shouldn’t pass up the opportunity to use the 

Clean Air Act to promote efficiency, energy security, to protect public health because of the same inaccurate claims about job losses 

that have been leveled against major actions under the Clean Air 

Act for 4 decades now. Thank you very much. 

[The prepared statement of Ms. McCarthy follows:] 

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Mr. WHITFIELD. Thank you, Ms. McCarthy. I was reading an article recently of Duke University, the Nicholas Institute of Environmental Policy Solutions and in there they quoted you and you had 

said that if you apply the 100 09250 tons per year limit for greenhouse gases that it would require six million sources to obtain Title 

5 permits and lead to 82,000 permitting actions under PSD resulting in an estimated combined cost of $22.5 billion to the permitting 

authorities alone. Now, I know you have the tailoring rule but 

without referring to the administrative necessity doctrine or the 

absurd results doctrine, doesn’t your tailoring act explicitly violate 

the terms of the Clean Air Act as to the limits? 

Ms. MCCARTHY. Mr. Chairman, I would tell you that your quote 

is correct. That is the reason why the administration puts together 

the tailoring rule and we believe that it is not only a legally sound 

approach to making sure that we. 

Mr. WHITFIELD. But without reference to the administrative necessity or absurd result it does violate the precise wording of the 

Clean Air Act? 

Ms. MCCARTHY. I am trying to explain to you that we believe 

that that is the best interpretation of Congress’ intent when it is 

a new pollutant. 

Mr. WHITFIELD. But you do recognize it does violate the explicit 

terms of the Clean Air Act? 

Ms. MCCARTHY. I do not believe that it violates the Clean Air 

Act. 

Mr. WHITFIELD. Well, your limits are above the 100 to 250 tons 

per year. 

Ms. MCCARTHY. They certainly are and we approach it in a very 

measured way to make sure that we don’t. 

Mr. WHITFIELD. Thank you. Now, let me make ask you did your 

agency conduct a comprehensive economic or job analysis of the impact of the greenhouse gas regulations? 

Ms. MCCARTHY. I am sorry. Could you say that again, Mr. Chairman? 

Mr. WHITFIELD. Did your agency conduct an analysis of the impact of the greenhouse gas rules on jobs and the economy? 

Ms. MCCARTHY. Yes, the greenhouse gas rules certainly we did 

with the light duty vehicle rule we have talked about that a little 

bit. 

Mr. WHITFIELD. But on stationary sources. 

Ms. MCCARTHY. On stationary sources the way in which the 

Clean Air Act works is that we are not setting a standard for permitting. Those permitting decisions are rightly. 

Mr. WHITFIELD. So is your answer no? 

Ms. MCCARTHY. My answer is that States do that in the course 

of doing the best available control technology permitting process. 

Mr. WHITFIELD. But the EPA, you do not do that then? 

Ms. MCCARTHY. Well, we do not know businesses’ intent. 

Mr. WHITFIELD. Do you all do any sort of analysis on how you 

are going to replace lost electricity generating capacity from any of 

the regulations?’’ 

Ms. MCCARTHY. I do not anticipate the greenhouse gases will result the greenhouse gas regulations will result in any lost electricity generation? 

128 

Mr. WHITFIELD. So you don’t think the regulations will cause the 

loss of any capacity? 

Ms. MCCARTHY. In terms of electric generating, no, I do not. 

Mr. WHITFIELD. OK, that bell wasn’t my time but I am going to 

at this point recognize Mr. Rush for 5 minutes. 

Mr. RUSH. Thank you, Mr. Chairman. 

Ms. McCarthy, I really want to apologize first of all that you had 

to wait this long and most of the members have gone and we have 

suspended the activities on our floor and the media for the most 

part has left during your testimony so I apologize for that but necessarily we have to do what we have to do here. 

Let me just ask you while today’s hearing focused on the jobs impacted by greenhouse gas regulations under the Clean Air Act and 

there is no question that this Congress must focus on job creation. 

Unemployment rates are exceptionally high and joblessness is taking its terrible toll on our Nation and in your professional opinion 

what would be some of the consequences particularly economically 

but also environmentally and in the area of public health if Congress did enact such a bill as the Upton-Inhofe bill where the EPA 

ability to regulate greenhouse gases would be repealed without any 

type of legislative alternative that has been presented to us, can 

you? 

Ms. MCCARTHY. Yes, I can speak to that and I appreciate the 

question. We are very concerned with the bill in terms of what it 

might do for our ability to make sure that businesses that want to 

actually be constructed or businesses that want to modify being 

able to make sure that those Clean Air Act permits are available 

to them. So we are very concerned that we protect the interests of 

the Clean Air Act, that we protect our ability to issue permits when 

permits should be required and deserved and that we move forward 

with the Clean Air Act as it was intended. Carbon pollution is a 

pollutant. It is a pollutant under the Act. It is a danger to public 

health and welfare. We believe we can take measured approaches 

to controlling that pollutant into making sure that as new facilities 

are constructed and major modifications are done that we minimize 

the kind of greenhouse gas emissions that are additionally emitted 

into the atmosphere. 

Mr. RUSH. The idea that the Clean Air Act requirements can control carbon pollution have anything to do with unemployment problems to me is a sheer fantasy. We are suffering a worldwide global 

recession. Normally, the regulations don’t cause anything. On the 

contrary they actually will benefit regulations caused the financial 

meltdown. All right, you testified that EPA recently prepared a 

white paper highlighting information which are the Clean Air Act 

and jobs and the economic in the United States. Are the findings 

highlighted in that paper based on peer review literature? 

Ms. MCCARTHY. Yes, they are. 

Mr. RUSH. And what did these peer review studies findings actually take on Clean Air Act regulations on jobs and the economy? 

Ms. MCCARTHY. Well, what it found and it is rather remarkable 

is that when the economists looked at some of the most heavily regulated industry they did not find evidence that regulation leads to 

larger job losses. For example, there was an article by Morgan 

Stern that looked at four of the most heavily regulated industries 

129 

and it found that increased environmental spending does not cause 

a significant change in employment in those regulated industries. 

On average there was a gain of 1.5 jobs for every $1 million in additional environmental spending. Now, that doesn’t mean that the 

Clean Air Act is a jobs act. It is clearly a public health act but the 

most remarkable thing is that for every dollar that you spend in 

order to clean up the air under the Clean Air Act, you get $30 in 

health benefits so it is a significantly effective public health measure. But the great thing is that it does have ancillary benefits of 

job growth and there is no evidence that it is a factor in significant 

job losses in the economy, in fact just the opposite. 

Mr. RUSH. Can you give us some examples of the types of jobs 

created when we clean up the environment? 

Ms. MCCARTHY. Sure, someone when they have to design and 

build and run and maintain pollution control equipment, those 

some ones are jobs. For example, installing a scrubber on a power 

plant can create up to a thousand construction jobs and a hundred 

permanent jobs. In addition, scrubbers require steel. That creates 

jobs as well. There was a study by the U.S. boilermakers that 

looked at jobs between ’99 and 2001 and it found that their jobs 

grew by 35 percent that is 6,700 jobs. So what we find now is there 

is a thriving environmental protection industry. In 2008, that was 

$300 billion in revenues were generated from that industry sector, 

1.7 million jobs, American jobs in that sector and they were exporting $44 billion worth of equipment and technology. We think that 

is rather a good success story. 

Mr. BARTON. [Presiding] The gentleman’s time has expired. 

The chair now recognizes himself for 5 minutes. 

Welcome, Assistant Administrator. Just for the record, are you a 

presidential appointee or a civil servant? 

Ms. MCCARTHY. I am a presidential appointee. 

Mr. BARTON. OK and how long have you held the position? 

Ms. MCCARTHY. Since June of 2009. 

Mr. BARTON. Thank you and what was your prior position within 

the Administration, if any? 

Ms. MCCARTHY. It was not. I did not work for the Administration. I worked for the Connecticut Department of Environmental 

Protection. I was the commissioner of that agency. 

Mr. BARTON. OK, thank you very much. Your opening in your 

statement in your testimony, prepared testimony talks about all 

the things that are the benefit of the Clean Air Act. It may surprise you but I was a supporter and voted for the Clean Air Act 

back in 1990. I mean it was bipartisan. I would say that the attempt to tie greenhouse gas regulation to the Clean Air Act is a 

stretch because in my opinion I don’t believe that CO2 is a pollutant under the definition of the Clean Air Act nor do I believe that 

it is a health hazard. Do you have any statistics that indicate CO2

has caused any kind of a poisoning that requires emergency room 

assistance or anything like that? 

Ms. MCCARTHY. CO2 is not a toxic pollutant. 

Mr. BARTON. So in terms of when you are talking in your testimony about the benefits of the Clean Air Act you talked about premature mortality savings and things like that, those types of criteria would not apply to CO2. 

130 

Ms. MCCARTHY. No, Mr. Barton, that is where I would differ. I 

would tell you that CO2 is very much a pollutant that impacts public health and welfare. I would tell you that CO2 actually does contribute to ozone pollution which is a significant health hazard and 

I would tell you that the Supreme Court that really interprets Congress’ intent for the rest of us told us that we had to consider 

greenhouse gas as a pollutant. 

Mr. BARTON. Well, actually the Supreme Court said that the 

EPA had to make a decision whether it should be regulated. 

Ms. MCCARTHY. That is correct, consider it. 

Mr. BARTON. OK, do you know what the level of CO2 right now 

generally speaking is in the atmosphere? 

Ms. MCCARTHY. Actually, I don’t have that figure. 

Mr. BARTON. If I was to say it was around 380 parts per million 

would you accept that in the ballpark? 

Ms. MCCARTHY. That is probably right. 

Mr. BARTON. OK, do you know what a greenhouse that grows 

plants and food within a greenhouse, do you know what the average CO2 parts per million is in a greenhouse? 

Ms. MCCARTHY. I am sure you will tell me. 

Mr. BARTON. You don’t have any idea? 

Ms. MCCARTHY. No. 

Mr. BARTON. So if I say it is around a thousand which is what 

it is you won’t dispute that? 

Ms. MCCARTHY. No. 

Mr. BARTON. Do you know what you create in CO2 when you answer my questions? Do you know what the amount of CO2 coming 

out when you answer a question is? We have about 380 parts per 

million in the atmosphere. Commercial greenhouse gases exist in 

about a thousand parts per million and when you answer a question or when I ask you a question, I expel CO2 at the rate of about 

40,000 parts per billion. So how in the world can that be a pollutant? If it is, my good friend Bobby Rush would be gasping for 

breath right now and turning red in the face and my good friend, 

Mr. Waxman, I mean the fact is under any definition greenhouse 

gas if CO2 is one are necessary for life. 

Ms. MCCARTHY. No one is disputing that. 

Mr. BARTON. So I know you are here to be the good soldier and 

I know there is a massive world debate about the greenhouse gases 

but when we try to apply the Clean Air Act which I voted for and 

which a majority of the Republicans on this committee, in fact I 

think all but one or two voted for that were on the committee, it 

just doesn’t work. It just the definitional terms are different so we 

have a difference of opinion on our side in terms of whether this 

is a necessary thing. Why do you need the tailoring rule to implement greenhouse gas regulations? 

Ms. MCCARTHY. Greenhouse gas is as you know a new pollutant 

under the Clean Air Act. We took a look to ensure that the application of the Clean Air Act to the greenhouse gas pollutants was done 

in a reasoned, commonsense way. We wanted to make sure that we 

phased in the greenhouse gas regulations in a way that made 

sense, in a way that was manageable, in a way that would meet 

the intent of Congress. When we looked at that we decided and the 

Administrator clearly made a determination that their were many 

131 

small sources that could potentially be regulated like greenhouse 

gases, she made a determination that that didn’t make sense under 

the law and so we issued the tailoring rule so that we got at the 

vast majority of greenhouse gases by regulating a minimum of the 

largest sources first. 

Mr. BARTON. My time has expired. Before I recognize the next 

witness or I mean the next questioner, would you submit for the 

record the EPA’s official position on the control technology if any 

that is best able right now to actually regulate greenhouse gases, 

if there is such a technology? 

Ms. MCCARTHY. There are many technologies for greenhouse 

gases. 

Mr. BARTON. Would you submit for the record those technologies 

and their cost effectiveness if you have that information? 

Ms. MCCARTHY. I could certainly provide you a range of technology choices that we have put out in white papers to help guide 

a decision that are efficient technologies that help advance reductions in greenhouse gases. 

Mr. BARTON. Thank you. 

The chair inquires of the Minority Mr. Markey was the one here 

closest but Mr. Waxman is the ranking member. Who should? OK, 

the chair would recognize Mr. Waxman for 5 minutes. 

Mr. WAXMAN. Thank you very much. 

Ms. McCarthy, we have heard a lot today about the greenhouse 

gas regulations that went into effect in January and we have heard 

from witnesses today that these regulations will be ‘‘nearly impossible to meet.’’ Yet this committee has also received testimony from 

industry that EPA’s approach has been ‘‘reasonable and does not 

impose undo hardship.’’ I would like to ask you some questions to 

help me understand exactly what is required under these new regulations for stationary sources. First, can you confirm that only 

new sources or existing sources that expand and significantly increase emissions are currently subject to any requirements? 

Ms. MCCARTHY. That is correct. 

Mr. WAXMAN. Thank you. So for example, if I own a power plant 

that is already up and running and I don’t make any changes I 

don’t have to do anything differently, do I? 

Ms. MCCARTHY. No. 

Ms. WAXMAN. But new facilities will have to go through a technology review process to determine best available control technology or BACT to limit carbon pollution at the facility. In most of 

the country this review is carried out by State or local permitting 

agencies not by EPA itself. Are you aware that the National Association of Clean Air Agencies has surveyed its members and most 

States reported that they only expect to do zero, one or two permits 

this year? 

Ms. MCCARTHY. Yes. 

Mr. WAXMAN. Members of the National Association of Clean Air 

Agencies recently briefed House staff on some of the permit reviews 

they have already begun. In the examples they share they concluded that energy efficiency would likely be all that was needed. 

I would like to use an example that New York State shared in 

order to ask if this is consistent with EPA’s guidance. In New York, 

a Lafarge cement plant volunteered to go through the process. The 

132 

State began by identifying all available technologies that might 

limit carbon pollution. This initial list included carbon capture and 

sequestration but did not include switching to a different type of 

fuel. Is this consistent with EPA’s guidance? 

Ms. MCCARTHY. Entirely, yes. 

Mr. WAXMAN. The State then quickly eliminated CCS as technically infeasible. The State indicated that because no geologic formation existed close to the cement plant, CCS would not be feasible. Is this consistent with the guidance? 

Ms. MCCARTHY. Yes. 

Mr. WAXMAN. The State then ranked the various options for limiting emissions and eliminated options that were too expensive. Finally, the State selected the technologies that it thought would be 

required. The State determined that the cement plant could reduce 

its carbon pollution by 12 percent by installing several types of energy efficiency equipment including high-efficiency motors, fans 

and burners. These efficiency features would constitute BACT. Is 

this the type of determination appropriate under EPA’s guidance? 

Ms. MCCARTHY. Yes. 

Mr. WAXMAN. It sounds to me like this was a logical, reasonable 

process and I understand that Lefarge Cement expects that these 

efficiency improvements will reduce their operating costs and save 

them money. Is it fair to assume that many other facilities may actually save money too? 

Ms. MCCARTHY. Yes. 

Mr. WAXMAN. I hope the other States will follow this commonsense example and find ways to reduce pollution and improve efficiency. I have some time remaining if any of my colleagues wish 

me to yield to them, otherwise I will yield back my time. Mr. 

Green. 

Mr. GREEN. I thank my friend. 

Ms. McCarthy, yesterday my good friend in the Senate who 

served on this committee, Sherrod Brown from Ohio called on 

President Obama to direct EPA to implement a plan to provide financial and technical transition assistance protecting U.S. manufacturing as we move forward with the greenhouse gas regulations. 

Last Congress when this chamber considered cap and trade I was 

equally concerned about the issue and working hard. Can you comment on what the Administration is doing to address these concerns moving forward with these regulations? 

Ms. MCCARTHY. Yes, I would be happy to. We have taken great 

pains as we begin to regulate greenhouse gases to work with the 

States and work with the permitting entities. We have provided a 

wealth of technical assistance. We have produced guidance documents that help walk them through this process. We have put 

white papers out that explain the cost effective technologies available in all of the major industry sectors that could be potentially 

regulated. We are also having listening sessions before we move 

forward with additional regulation to make sure that we understand the needs of the company and that we can effectively reduce 

greenhouse gases in ways that are cost effective. Every rule that 

we have available to us under the Clean Air Act that is suitable 

for greenhouse gas regulations requires us to look at cost so we will 

go out of our way to make sure that we use not just a commonVerDate Nov 24 2008 12:08 Aug 10, 2011 Jkt 037690 PO 00000 Frm 00138 Fmt 6633 Sfmt 6633 P:\MY DOCS\HEARINGS 112\112-12 030111\112-12 CHRIS
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sense approach but one that reduces cost to the fullest extent we 

can and still achieve the required reductions under the Clean Air 

Act. 

Mr. GREEN. I know that time has expired and I have a question 

I would like to submit about how good natural gas is to replace the 

problem we have with carbon, Mr. Chairman. 

Mr. BARTON. Well, certainly without objection I will support that. 

Mr. GREEN. OK, thank you, thank you. 

Mr. BARTON. The gentleman’s time has expired. 

The gentleman from Texas, Dr. Burgess is recognized for 5 minutes. 

Mr. BURGESS. Thank you, Mr. Chairman. 

Ms. McCarthy, thank you for being here. In Phoenix in fact just 

about a month ago at the Fourteenth Annual Energy Utility and 

Environmental Conference in Phoenix, it says that you were involved or advocating a not just a tweaking of current energy use 

but a fundamental overhaul of the Nation’s production use of energy. EPA is ready, willing and able to drive this overhaul, you emphasized in a quote here, ‘‘We must transform the power sector in 

a way that meets the needs of the 21st century.’’ You repeatedly 

use the word transform to describe EPA’s goal for the Nation’s energy use so I guess a question that would come up where in the 

statute does the EPA get the authority to transform the power sector? 

Ms. MCCARTHY. That was, if I may, just to give you the background for the conference. That was a conference of technology developers. What we were referring to was the range of Clean Air Act 

actions that are impacting the utility sector and we were talking 

about the fleet that is out there in the utility sector and the extreme inefficiency of many of the units that out there. In the Clean 

Air Act implications of having those facilities install current technology, technology that is available currently and has been available for 30 years that can actually clean them up and move towards a cleaner fleet. 

Mr. BURGESS. But fundamentally it is the job of the legislative 

branch to come to those conclusions in conjunction with the development of a national energy policy so transformation of the power 

sector of America really should be a legislative initiative, not an 

Administrative initiative or an Executive Branch initiative. 

Ms. MCCARTHY. I am not sure if that was a direct quote but 

what I was there to talk about was our opportunity, our opportunity to achieve significant public health protection for American 

families by looking at how we could provide certainty in the regulated community so investments would flow to utilities. Those that 

are inefficient would be able to upgrade. Those that are inefficient 

would know what their regulatory obligation was. 

Mr. BURGESS. Let me just ask a question before the time expires. 

In a transformed power sector, how much coal would we be able 

to use in a transformed power sector? Do you have a figure in mind 

for that? Is it along the same lines that Gene Green just asked the 

question about natural gas? How much coal? How much natural 

gas? How much nuclear? 

Ms. MCCARTHY. No, we EPA is rightly not in the business of 

choosing fuels. We are in the business of regulating pollutants and 

134 

what we have done with the greenhouse gas rules is we have made 

sure that if you are building a coal facility, you should be as clean 

as a coal facility can get. We have not suggested that a different 

fuel needs to be used. Again, we are trying to provide certainty for 

businesses as they need to be permitted that are coming in new 

and making major modifications. 

Mr. BURGESS. Well, speaking in terms of certainty, you were here 

a year ago or just right after the deep water horizon started causing problems and the subject that day was a briefing. It wasn’t a 

hearing so there is no record of it unfortunately but the subject was 

on the Environmental Protection Agency going to a new standard 

of 15 percent ethanol in motor fuels and gasoline. 

Ms. MCCARTHY. Yes. 

Mr. BURGESS. And I don’t know if you recall or not but I asked 

you and the Department of Energy who was there with you that 

day about where were the studies that we could look at that shows 

that this indeed was a reasonable thing to do and that in fact people who had snow blowers and two-cycle engines would not have 

damage to their equipment by a 15 percent ethanol mixture. Do 

you recall that briefing that we had? 

Ms. MCCARTHY. I do. 

Mr. BURGESS. And you know, I never got any information from 

either EPA or the Department of Energy about the testing that 

was done or supposedly done. In fact, it almost seemed to be finger 

pointing one agency pointing at the other saying well the other guy 

is responsible for this but as we come up with this mandate that 

was described in Congress in December, 2007, the amount of ethanol that has to be offloaded into the Nation’s fuel supply is I believe what was driving the, no pun intended, what was driving the 

concerns to bump the amount up to 15 percent. Is that correct? 

Ms. MCCARTHY. Not on the part of EPA. EPA was responding to 

waiver requests. 

Mr. BURGESS. But where are we? 

Mr. BARTON. The gentleman’s time just expired. 

Mr. BURGESS. Do we have those studies available? 

Ms. MCCARTHY. We do and I apologize if we weren’t as responsive as we should be. We will send you the waiver decisions that 

were made and incorporate all of the scientific information in them. 

Mr. BURGESS. Thank you, Mr. Chairman. 

Mr. BARTON. OK, the gentleman from Massachusetts, Mr. Markey for 5 minutes. 

Mr. MARKEY. Thank you, Mr. Chairman, very much. 

Gasoline prices went up almost 20 cents in the last week, the 

biggest weekly jump in prices since Hurricane Katrina. In 1975, we 

imported six million barrels of oil per day. Today that number is 

nearly 12 million barrels per day. Prices have risen by a factor of 

13 since 1975. Foreign oil purchases account for roughly one-half 

of the United States’ trade deficit, just to input that oil largely 

from OPEC. Oil money supports Iran’s nuclear program, roadside 

bombs in Iraq, rockets for Hezbollah and Hamas, and hate filled 

Wahhabi teachings in Saudi Arabia. Now, the Republicans are 

busy raising the specter of the Clean Air Act’s devastating economic impacts despite reports showing that the Clean Air Act has 

historically led to increases in jobs and will provide $2 trillion in 

135 

benefits in 2020. But what the Republicans are planning in order 

to address this fabricated threat is likely to create a real danger 

for the United States. This committee may soon take up a bill that 

would tie EPA’s hands and prevent it from taking any steps to reduce dangerous global warming pollution under the Clean Air Act. 

What the legislation would also do is prevent EPA from taking any 

steps to reduce our dangerous dependence on foreign oil. 

Ms. McCarthy, the legislation this committee may soon act on 

could open up the existing car and light truck oil saving standards 

to legal challenge and will prevent further standards from being 

set. It will prevent further implementation of the renewable fuels 

standard and it will prevent EPA from doing anything to reduce oil 

use from planes, trains, boats and other industrial sources. In fact, 

this bill could result in an increase in our oil dependence of more 

than five million barrels of oil a day by the year 2030, more than 

we currently import from OPEC. Do you agree that this legislation 

could dangerously increase our dependence on foreign oil by preventing EPA from being able to take any steps to reduce demands? 

Ms. MCCARTHY. I would agree. 

Mr. MARKEY. Two weeks ago, the House passed a continuing resolution for spending for the rest of 2011 and that legislation was 

containing a rider that would block the EPA from using any funds 

to move forward in any way on curbing global warming pollution. 

For the landmark car and light truck efficiency standards to be 

fully implemented, EPA still has to sign off on California’s plan to 

allow companies that are complying with the national standard to 

be deemed compliant with California standards. If EPA is not allowed to sign off on California’s compliance plan could that put the 

entire fuel economy agreement that is supported by all stakeholders in jeopardy? 

Ms. MCCARTHY. It could. 

Mr. MARKEY. The President recently issued an executive order 

that requires federal agencies to propose regulations only after 

seeking the views of those who might be impacted by them. Can 

you give me an example of how EPA is complying with this directive in its efforts to regulate global warming pollution? 

Ms. MCCARTHY. Very quickly, we have the Administrator has 

charged us and we have gone out and done listening sessions even 

before we begin the regulatory process to look at new source performance standards for greenhouse gases. 

Mr. MARKEY. The President’s executive order also requires agencies to take the special needs of small businesses into account while 

developing regulations. Can you give me an example of how EPA 

has complied with this directive as it contemplates regulations to 

reduce global warming pollution? 

Ms. MCCARTHY. The greenhouse gas tailoring rule eliminated the 

need to permit six million small facilities. 

Mr. MARKEY. The threat to our economy is the threat that is 

coming from a dramatic spike in oil. That usually signals the return of a recession. That is where we lose the jobs. If we tie the 

hands of EPA from taking the kind of bold action which they 

should take in order to reduce our dependence on imported oil, in 

the long run we are going to repeat this cycle of job destruction 

that has been our relationship with imported oil going all the way 

136 

back to 1973. How many times do we have to re-learn this lesson? 

1973, 1979–80, 1991–92, on and on right up to the $4 a gallon gasoline in 2008 that foreshadowed this economic catastrophe. It is imperative that we defeat this Republican effort to tie the hands of 

the EPA from ensuring that the renewable fuel standard that the 

fuel economy standards are in place that increase using technology 

our ability to tell OPEC we don’t need their oil anymore than we 

need their sand. 

Thank you, Mr. Chairman. 

Mr. BARTON. We thank the gentleman. 

It shows Mr. Olson is next, is that your understanding? OK, we 

are going to go with Mr. Olson and then Mr. Bilbray and then Mr. 

McKinley. What is your timeframe, Madam Administrator? Are you 

OK for another 15 minutes or so? 

Ms. MCCARTHY. I am here for you, Mr. Chairman. 

Mr. BARTON. OK, thank you, ma’am. 

Mr. OLSON. I thank the chair. 

Ms. McCarthy, as you know jobs are the biggest concerns of the 

American people right now, that 10 percent unemployment for 

about 2 years, and EPA Administration Jackson touts the job creation of the new green control technologies. When I asked one of 

our previous witnesses if she was right or wrong about creating 

these great jobs, he said wrong. Are you aware of any analysis done 

by EPA to determine the economic impact specifically with regard 

to jobs of the EPA’s greenhouse gas regulations? 

Ms. MCCARTHY. No. 

Mr. OLSON. Don’t you think EPA should look at jobs in proposing 

some greenhouse gas regulations? 

Ms. MCCARTHY. Let me just expand on that. The greenhouse gas 

tools that we are using, the tools we are using to regulate greenhouse gases are the same tools that we have used in the Clean Air 

Program for 40 years and what we have found is that those tools 

actually provide cost-effective, public health measures that actually 

grow the economy and in many ways provide one of the most significant public health benefits that are available to us. So for every 

dollar we spend on clean air, we get $40 in public health benefits 

and so we believe that our job is to deliver public health to the people in this country but we are not insensitive to the cost impacts 

and the job impacts. And what I would say is the other point I 

would really like to make is that the Clean Air Act because of the 

public health benefits it creates in terms of making sure that people can get to work means that people can be productive and keep 

their jobs. What it means in terms of kids staying healthy, staying 

in school is incredibly important if you are a single parent or if you 

are parents where both need to work. We are providing opportunities for clean air. We are providing opportunities to keep people 

healthy, that certainly keeps people productive. 

Mr. OLSON. Yes, ma’am. I ask you to submit further answer for 

the record please, ma’am. 

Ms. MCCARTHY. Yes. 

Mr. OLSON. I have little time here. Would you be opposed to an 

inclusion of a detailed job statement and an impact statement any 

time EPA proposes new regulations? Would you be opposed to that? 

137 

Ms. MCCARTHY. We already do a detailed regulatory impact assessment with the Office of Management and Budget for our rules. 

Mr. OLSON. Something that we could include the private sector 

in to get their opinion as well? 

Ms. MCCARTHY. We actually do peer review of all our methodologies. That includes going to the private sector using economists and 

scientists so everything we do is peer reviewed in terms of the 

methodology, the data is transparent and we believe we do a very 

good job. 

Mr. OLSON. Well, thank you then I will put you down as a big 

yes for having a more determinative jobs’ impact statement from 

EPA when they propose to change regulations. And coming down 

the home stretch here, I want to talk about a problem my home 

State is having with the EPA regarding the permitting process that 

has been done by the Texas Council on Environmental Quality for 

the last 15 years. Basically, EPA is taking over the regulation of 

the power generation and refineries in our State and again, it has 

been going on for the last 15 years. Our State had a SIP approved 

15 years ago, three Administrations, two Democrat, one Republican 

that Texas operated under and again approved by the EPA. Essentially it achieves its clean air goals by giving Texas the flexibility 

to establish caps for all emitting facilities at a plant instead of each 

individual piece of equipment. EPA is hurting Texas economy and 

jobs right now by taking over this permitting process. Just as example what has happened since EPA has done that in late-December, a major refinery has spent $4 million to ‘‘deflex.’’ The problem 

I have with all of this is the flexible permitting process has worked. 

Since 1999, flexible permitting has achieved a 22 percent decrease 

in ozone, a 53 percent decrease it nitrous oxide compared to the national average of 15 percent for ozone and 27 percent for nitrous 

oxide. So Texas 22 percent in ozone, the Nation 15 percent, Texas 

53 percent in ozone and the Nation 29 percent. We are doing all 

of this while adding 3.5 million people and creating half the private 

sector jobs in America since our country went into recession in 

2009. 

Mr. BARTON. The gentleman’s time expires and he needs to—— 

Mr. OLSON. I will wrap up real quickly. The point of the Clean 

Air Act is clean air. Texas has done better than most. Why is EPA 

taking this over? 

Ms. MCCARTHY. I would just have to object to the phrase that we 

are taking anything over, Mr. Olson. I believe we are doing the 

best job that we can to work with TCEQ to make sure that the permits they issue are federally enforceable, that provide a sound platform for your businesses to operate with confidence. We do not believe that the flexible air permits are enforceable under federal 

law. We believe they put those businesses at risk. We believe they 

are not transparent enough for the communities that live around 

those facilities to know that they are on a level playing field with 

the way that every other State issues its permit and does business. 

Mr. BARTON. And why did it take 18 years to come to that conclusion? 

Ms. MCCARTHY. I believe that it was under the Bush Administration that first raised the issue that these flexible air permits need 

to be fixed. 

138 

Mr. BARTON. Then you don’t dispute that for 18 years EPA you 

said it was—well they didn’t positively say it was OK. They didn’t 

choose to say it was not OK and they only decided that it was not 

OK this last year? 

Ms. MCCARTHY. Well, we have made a concerted effort to try to 

work with the State and work with the industries to switch what 

we believe is not an appropriate and federally enforceable. 

Mr. BARTON. Is there any other State that has had the success 

in actually reducing the criteria pollutants like Texas has? 

Ms. MCCARTHY. We have had many areas that have had great 

success and I am not disputing that Texas hasn’t had reductions 

in air pollution. What I will say is they don’t use a process that 

even EPA can figure out what is going on in those facilities and 

ensure that they are complying with federal. 

Mr. BARTON. And that is a subject for another hearing. The gentleman’s time has expired. 

The gentleman from California, Mr. Bilbray, is recognized. 

Mr. BILBRAY. Ms. McCarthy, the CAFE standard. 

Ms. MCCARTHY. Yes. 

Mr. BILBRAY. Is the CAFE standard set with 100 percent fossil 

fuel gasoline, 10 percent or 15 percent ethanol? What is the fuel 

mixture that is used to set the CAFE standard? 

Ms. MCCARTHY. The CAFE standard isn’t based on the fuel mixture, it is based on fuel efficiency. It is based on the efficiency of 

the vehicle. 

Mr. BILBRAY. So I was the guy who had the emissions put on the 

sticker next to the mileage but when the consumer gets the mileage reading. 

Ms. MCCARTHY. Right, it is based on zero. It is based fuel without any ethanol if that is your question. 

Mr. BILBRAY. OK. 

Ms. MCCARTHY. That is our certification code. 

Mr. BILBRAY. So if you are using 100 percent fossil fuel as your 

standard for CAFE. 

Ms. MCCARTHY. That is correct. 

Mr. BILBRAY. And is there a reason why you don’t use ethanol 

in the mixture? 

Ms. MCCARTHY. It just hasn’t been updated of late to recognize 

the fact that there is ethanol in most of the fuel. 

Mr. BILBRAY. And ethanol has an impact on fuel mileage, right? 

Ms. MCCARTHY. It does. 

Mr. BILBRAY. What is your number, 66 percent, 70 percent of diesel, I mean of gasoline? 

Ms. MCCARTHY. I don’t have that on the top of my head. It depends on certainly the amount of ethanol in the mix. 

Mr. BILBRAY. Well no, I am talking about ethanol as compared 

to gasoline. 

Ms. MCCARTHY. Yes. 

Mr. BILBRAY. The carbon chain is 66 percent, 70 percent? 

Ms. MCCARTHY. I don’t know the answer. 

Mr. BILBRAY. OK, I think that is a critical component I would 

like to talk to you about because as somebody who has worked at 

the local level on it when we talk about if you we are going to address that issue, first of all the consumer is not allowed in the 

139 

United States to use 100 percent gasoline in the fuel system because the retailer is not allowed to sell it to the consumer without 

10 percent. 

Ms. MCCARTHY. No, that is incorrect. 

Mr. BILBRAY. OK, I can go buy real straight gasoline? 

Ms. MCCARTHY. It depends on where you live and what time of 

the year. 

Mr. BILBRAY. OK, that is astonishing I will just tell you because 

that we get into it. California fought for years to try to oppose this 

and you remember that battle. A lot of your State agencies supported us on this. Let me get back to and oh by the way, in California we are paying $6 a comparable gallon for ethanol. Now, 

when we talk about something that has only the energy of 70 percent, let us give them 70 percent of gasoline, wouldn’t you agree 

that our content mandate should reflect real useable energy and 

not just volume? Are you following what I am saying? In other 

words, there are certain green fuels that can produce 100 percent 

equity with gasoline. You have right now on the market a green 

fuel that only provides 66 to 70 percent of the energy of traditional 

fossil fuel. Don’t you think that it would be much more real world 

standard if we allowed the BTUs to be the content requirement 

rather than by volume? 

Ms. MCCARTHY. Actually, I would have to say that what we regulate are air emissions. We don’t force particular mixtures of fuels. 

We force those fuels to meet certain. 

Mr. BILBRAY. Ma’am, no wait a second. I have got to call you 

down on that because we have got study on study that the CARB 

fuel was cheaper and cleaner than the oxidated fuel with ethanol. 

We have standards after standard in California. EPA, before you 

showed up, held us off for years. We had a cleaner, cheaper fuel. 

We are mandated in California to put ethanol into our fuel. All I 

am asking you is this, seeing that that mandate requires that only 

70 percent of the or comparable seven percent, not 10 percent but 

7 percent of the energy in that tank is renewable, don’t you think 

that it would be more reasonable to reflect that that we allow the 

standard to be either 10 percent by volume or seven percent by energy because it is the energy? Wouldn’t you agree that energy is 

what matters, not the volume? 

Ms. MCCARTHY. I understand exactly what you are saying and 

all I would suggest is that I am unprepared for this conversation. 

I am here to talk about greenhouse gases. If you would like to 

carry on this conversation I am certainly happy to do that and we 

will bring our technical expert. 

Mr. BILBRAY. My point is the fact that the standard that is touted so much by my colleague from Massachusetts has major problems that need to be corrected and ought to be corrected through 

legislation if the EPA can’t address it. That fact that the consumer 

is actually losing out 30 percent of the energy for, you know, for 

ethanol that you do not get gasoline and this is what my point is 

on this from the emissions point of view, emission standards are 

set per gallon, not per BTU. 

Ms. MCCARTHY. I understand. 

Mr. BILBRAY. So now you have got this stuff hiding as equal to 

gasoline when it doesn’t give you the energy of gasoline but has as 

140 

they are trying to compare apples and oranges and this is a major 

problem we need to address. 

Mr. BARTON. The gentleman’s time is just about to expire. We 

appreciate the gentleman’s questions on ethanol and fuel standards. The gentle lady is right, this is a greenhouse gas hearing on 

CO2 but those were very good questions. 

Mr. BILBRAY. Well, Mr. Chairman, let me just say that the issue 

here though is that mandating the fuel as part of it, the emissions 

issue is hidden. 

Mr. BARTON. That is true. 

Mr. BILBRAY. Because when you talk the fact that the efficiency 

of the fuel is so deficient, you are now hiding this huge pollutant 

that is being brought into it in volume rather than talking about 

the true emissions per mile driven. 

Mr. BARTON. OK, the gentleman’s time has expired. We don’t 

want to let you pull an Ed Markey on us here. 

Mr. BILBRAY. OK. 

Mr. BARTON. So we also appreciate the gentle lady’s refreshing 

candor in answering the questions. This thing with the gentleman 

from West Virginia is going to be the last questions unless Mr. 

Rush has some questions. 

Mr. MCKINLEY. Thank you, Mr. Chairman. 

I read through your remarks your opening statement several 

times and highlighted some features too. I think what I am gathering from your remarks is that the regulation of the greenhouse 

gases through the Clean Air Act is going to create jobs. It is going 

to offset the jobs that it is going to cost and I have gone through 

it and it talks about how by the year 2020, we are going to have 

$2 trillion in benefits. A $30 benefit for every dollar spent, that the 

economy is billions of dollars larger today because of the Clean Air 

Act. In the past 7 years, 200,000 jobs have been created in the air 

pollution industry, air pollution control industry. I can go on. It 

was very interesting but I come from West Virginia and with all 

due respect I don’t want to see us take risk that you are posing 

with that analysis and they appear as fantasy. What I believe and 

what I deal with, I am engineer and what I deal with is in reality 

and the reality is the jobs you describe, they are not going to be 

in West Virginia. When you crush our economy with over 50 percent of the revenue for their operators comes from coal we heard 

testimony earlier from some of your other compatriots that when 

you take away that we are either going to have in West Virginia 

the State government is either going to have to cut services or raise 

taxes and that is going to discourage a lot of investment in West 

Virginia. There is a steel company in Weirton and one in Wheeling 

that combined used to have over 30,000 employees that because of 

your over-regulations and what has happened overseas, they are 

down to only 2,000 employees. They are just a shadow of what they 

were and when you talk to them it is all because of government 

and the regulations and the lack of control of what is going in from 

overseas. So when I go back on the weekends, I meet with the steel 

workers. I meet with the coal miners. They are scared to death of 

what Washington is doing and what the EPA is doing. They don’t 

know how they are going to have a job tomorrow. They don’t know 

how they are going to have a roof over their heads for their chilVerDate Nov 24 2008 12:08 Aug 10, 2011 Jkt 037690 PO 00000 Frm 00146 Fmt 6633 Sfmt 6633 P:\MY DOCS\HEARINGS 112\112-12 030111\112-12 CHRIS
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dren and what their future is. They are scared to death of what 

the EPA, their more over-regulation with it. A good remark they 

said why can’t, you know, our families have the same enjoyment 

that the EPA families are having with what they are doing to us? 

So these realities that I have referred to, they are coming from the 

people in my district. They are scared. They are worried about the 

government and the over-regulation. When I went through your report, it is all based so much of it based on your own funded studies 

rather than independent scientific. It is your reports that you are 

quoting and then you refer to the B-rated Environmental Journal 

that is used. Not even one of the top ones in the country that 

worldwide, globally is respected. You are using a B-rated journal 

to use as to shore-up your argument of why you should do these 

kinds of things. I am just asking, madam, with a straight face how 

can you honestly say that the enforcement of the greenhouse gases 

are going to create jobs and the people in West Virginia are going 

to be OK? 

Ms. MCCARTHY. Well, you have hit many, many different issues. 

Mr. MCKINLEY. You should speak up a little louder please. 

Ms. MCCARTHY. I am sorry. You have addressed a number of 

issues and let me try to get at these. I have been in the environmental business so to speak as a regulator for 30 years. I came 

from a working-class family as well. I do not believe that in this 

day and age we need to make a choice between clean jobs, good 

jobs and breathing clean air. I think we have proven in 40 years. 

Mr. MCKINLEY. Just show me how you are going to create the 

jobs. Tell me what is going happen? 

Ms. MCCARTHY. In 40 years of history of the Clean Air Act—— 

Mr. MCKINLEY. I don’t want the fantasy. I want to know specifically are we going to replace those jobs because those jobs are 

being lost. 

Ms. MCCARTHY. I do not believe that the approach we are taking 

on greenhouse gases because it is done in a commonsense, phased, 

measured way that is doing anything other than trying to identify 

the most cost-effective ways for new businesses to get permits and 

to do their business. 

Mr. MCKINLEY. Did you not hear the testimony from the people 

that were just here the 2 or 3 hours prior to you? 

Ms. MCCARTHY. I did. 

Mr. BARTON. The gentleman’s time has expired but we will let 

the administrator answer the question. 

Ms. MCCARTHY. Let me just make a couple of points and one is 

that the permit requirements only are dealing with the largest 

sources of greenhouse gas emissions. They are only looking at the 

best technology to make them efficient when new ones are coming 

on line or when they are making major modifications. That is what 

we are doing and the data that I have in my testimony is all based 

on peer-reviewed science. It is not just EPA studies. It is all transparent. What I listen to are many people with ideas and concerns. 

I appreciate those but there were some documents that you are listening to that I don’t think are transparent, that I don’t think have 

been peer-reviewed and I think the one thing that I am trying to 

do is to present you with information so that you can make the appropriate decisions and I do believe that there is a wealth of sciVerDate Nov 24 2008 12:08 Aug 10, 2011 Jkt 037690 PO 00000 Frm 00147 Fmt 6633 Sfmt 6633 P:\MY DOCS\HEARINGS 112\112-12 030111\112-12 CHRIS
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entific data that says we need to take action to reduce greenhouse 

gases that is one of our most significant public health challenges 

and that the Clean Air Act for 40 years has been a premier opportunity to actually reduce pollution like carbon pollution in ways 

that is cost-effective. 

Mr. BARTON. Does Mr. Rush wish to ask any wrap-up questions? 

Mr. RUSH. No, Mr. Chairman, I don’t have any additional questions. 

Mr. BARTON. OK, let me—just for clarification before we adjourn 

as I understand the Obama Administration approach on greenhouse gases that you elaborated on, you are not going to set a 

standard based on fuel. You are not trying to set an emission level 

based on coal or an emission level based on natural gas or an emission level based on an alternative. 

Ms. MCCARTHY. No, our greenhouse gas permitting process starts 

with the proposal on the table. If it starts with a coal facility, those 

are the technologies. 

Mr. BARTON. So if I have in Ohio a coal-fired power plant that 

is 50 years old and I want to maintain that plant as is, I am not 

going to have to do anything under your regulatory approach? 

Ms. MCCARTHY. On the greenhouse gases if you are not you don’t 

need a permit unless conducting a major modification. 

Mr. BARTON. But if I freeze my technology and let us say I am 

going to use the same fuel source and I am going to use the same 

plant equipment at the same location and I have a 400-megawatt 

coal-fired power plant, I don’t have to do anything under the regulatory approach that you all are proposing? 

Ms. MCCARTHY. You would not need to get a greenhouse gas permit. We would not be looking at your facility in terms of that. 

Mr. BARTON. You are only going to look at facilities that are 

under renovation or under permitting as new source, new stationary sources? 

Ms. MCCARTHY. That is correct and only when you are a very 

large facility and you are making a large increase in greenhouse 

gases as a result, and even then all you are looking at are building 

efficiencies into the system. 

Mr. BARTON. Seeing no further members present wishing to ask 

questions, we thank the gentlelady for her time and this subcommittee is adjourned. 

[Whereupon, at 6:06 p.m., the subcommittee was adjourned.] 

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