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A REVIEW OF EPA’S REGULATORY ACTIVITY 

DURING THE OBAMA ADMINISTRATION: ENERGY AND INDUSTRIAL SECTORS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON ENERGY AND POWER 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

JULY 6, 2016 

Serial No. 114–156 

( 

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 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

GREG WALDEN, Oregon 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

Vice Chairman 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Ohio 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

LARRY BUCSHON, Indiana 

BILL FLORES, Texas 

SUSAN W. BROOKS, Indiana 

MARKWAYNE MULLIN, Oklahoma 

RICHARD HUDSON, North Carolina 

CHRIS COLLINS, New York 

KEVIN CRAMER, North Dakota 

FRANK PALLONE, JR., New Jersey 

Ranking Member 

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 

G.K. BUTTERFIELD, North Carolina 

DORIS O. MATSUI, California 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

PETER WELCH, Vermont 

BEN RAY LUJA ́ N, New Mexico 

PAUL TONKO, New York 

JOHN A. YARMUTH, Kentucky 

YVETTE D. CLARKE, New York 

DAVID LOEBSACK, Iowa 

KURT SCHRADER, Oregon 

JOSEPH P. KENNEDY, III, Massachusetts 

TONY CA ́ RDENAS, California 

SUBCOMMITTEE ON ENERGY AND POWER

ED WHITFIELD, Kentucky 

Chairman 

PETE OLSON, Texas 

Vice Chairman 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

ROBERT E. LATTA, Ohio 

GREGG HARPER, Mississippi 

DAVID B. MCKINLEY, West Virginia 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

BILL JOHNSON, Ohio 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

BILL FLORES, Texas 

MARKWAYNE MULLIN, Oklahoma 

RICHARD HUDSON, North Carolina 

JOE BARTON, Texas 

FRED UPTON, Michigan (ex officio) 

BOBBY L. RUSH, Illinois 

Ranking Member 

JERRY MCNERNEY, California 

PAUL TONKO, New York 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

PETER WELCH, Vermont 

JOHN A. YARMUTH, Kentucky 

DAVID LOEBSACK, Iowa 

FRANK PALLONE, JR., New Jersey (ex 

officio) 

(II) 

(III) 

C O N T E N T S 

Page 

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

of Kentucky, opening statement ......................................................................... 2 

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

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

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

Hon. John Shimkus, a Representative in Congress from the State of Illinois, 

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

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

prepared statement .............................................................................................. 156 

WITNESSES

Janet McCabe, Acting Assistant Administrator, Office of Air and Radiation, 

Environmental Protection Agency ...................................................................... 7 

Prepared statement .......................................................................................... 9 

Answers to submitted questions ...................................................................... 184 

Travis Kavulla, President, National Association of Regulatory Utility Commissioners, on Behalf of the National Association of Regulatory Commissioners ................................................................................................................... 45 

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

David Porter, Chairman, Railroad Commission of Texas .................................... 63 

Prepared statement .......................................................................................... 65 

Lynn D. Helms, Director, North Dakota Industrial Commission, Department 

of Mineral Resources ............................................................................................ 81 

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

Robert Weissman, President, Public Citizen ......................................................... 101 

Prepared statement .......................................................................................... 103 

Charles D. McConnell, Executive Director, Energy and Environment Initiative, Rice University ............................................................................................ 126 

Prepared statement .......................................................................................... 128 

SUBMITTED MATERIAL

Letter of December 14, 2011, from Mr. Upton, et al., to Lisa Jackson, Administrator, Environmental Protection Agency, submitted by Mr. Griffith .......... 158 

Letter of February 3, 2012, from Gina McCarthty, Assistant Administrator, 

Environmental Protection Agency, to Mr. Upton, submitted by Mr. Griffith . 162 

Letter of May 4, 2012, from Arvin Ganesan, Associate Administrator, Environmental Protection Agency, to Mr. Upton, submitted by Mr. Griffith ......... 178 

Slide, ‘‘Coal-fired Power Plants Planned and Under Construction,’’ Platts 

Database, energyxxi.org, September 2015, submitted by Mr. Griffith ............ 182 

Analysis, ‘‘Estimated Costs and Benefits of Proposed Cement NESHAP,’’ Environmental Protection Agency, submitted by Mr. Griffith .............................. 183 

(1) 

A REVIEW OF EPA’S REGULATORY ACTIVITY 

DURING THE OBAMA ADMINISTRATION: ENERGY AND INDUSTRIAL SECTORS 

WEDNESDAY, JULY 6, 2016 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON ENERGY AND POWER, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The subcommittee met, pursuant to call, at 10:02 a.m., in room 

2322, Rayburn House Office Building, Hon. Ed Whitfield (chairman 

of the subcommittee) presiding. 

Members present: Representatives Whitfield, Olson, Barton, 

Shimkus, Latta, Harper, McKinley, Kinzinger, Griffith, Johnson, 

Long, Flores, Mullin, Rush, McNerney, Tonko, Engel, Green, Castor, Welch, and Loebsack. 

Staff present: Will Batson, Legislative Clerk, Energy and Power; 

Mike Bloomquist, Deputy Staff Director; Allison Busbee, Policy Coordinator, Energy and Power; Tom Hassenboehler, Chief Counsel, 

Energy and Power; A.T. Johnston, Senior Policy Advisor; Ben Lieberman, Counsel, Energy and Power; Brandon Mooney, Professional Staff Member, Energy and Power; Mary Neumayr, Senior 

Energy Counsel; Annelise Rickert, Legislative Associate; Dan 

Schneider, Press Secretary; Peter Spencer, Professional Staff Member, Oversight; Jean Fruci, Democratic Energy and Environment 

Policy Advisor; Caitlin Haberman, Democratic Professional Staff 

Member; Rick Kessler, Democratic Senior Advisor and Staff Director, Energy and Environment; John Marshall, Democratic Policy 

Coordinator; and Alexander Ratner, Democratic Policy Analyst. 

Mr. WHITFIELD. I’d like to call the hearing to order this morning, 

and today’s hearing is a review of EPA’s regulatory activity during 

the Obama administration in the energy/industrial sector. 

We’ll have two panels of witnesses this morning. The first one, 

of course, is Ms. McCabe, who is a frequent visitor to the committee, and we welcome you again this morning, Ms. McCabe. 

And then on our second panel I’ll introduce each of those witnesses when it comes time for them to give their opening statement. 

At this time, I would like to recognize myself for 5 minutes for 

an opening statement. 

2 

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

During the almost 6 years that I have been chairman of this subcommittee, we’ve had 40 hearings that have looked at various EPA 

rules and proposals that affect or will affect the Nation’s energy 

and industrial sectors. 

These are the critical sectors for ensuring our Nation’s economic 

productivity and prosperity. The costs and burdens of EPA’s unrelenting rulemaking upon these sectors have been a constant concern. 

We’ve seen the impact of these rules in scores of shuttered coalfired plants, the delayed and canceled projects, and the destruction 

of thousands of jobs in communities dependent upon this abundant 

energy resource. 

But the impact of compliance costs is only part of the story. Our 

hearing record, which reflects testimony from Federal officials, 

State energy and environmental regulatory, legal experts and 

economists, shows EPA’s controversial and extreme interpretations 

of its statutory authorities to transform its role from that of environmental regulator to that of the Nation’s ultimate energy regulator. 

In fact, on the climate change issues, the philosophy seems to be 

that the end justifies the means, whether or not laws are violated 

or not. 

We see this first hand in the EPA’s implementation of the administration’s climate change agenda, which is reflected in what is 

already more than 100 greenhouse gas-related rules. 

EPA’s pursuit of greenhouse gas standards for the power sector 

is a case in point. The Agency’s new interpretation of its authorities have led to a new source standard that effectively prohibits the 

construction of power plants in the United States that use the most 

advanced commercially proven clean coal technologies, the kind 

being built today in Japan and around the world. 

In fact, Mr. Shimkus, Mr. Olson and I were in a plant in Japan 

last week. Zero NOx emission, zero SOx emission, operating, burning 3 million tons a year, cannot be built in America. 

The prospect of this kind of regulation combined with utility 

MACT and related rules has undermined the diversification of our 

Nation’s future energy supply. The Agency’s assertion of new authorities to set energy policy is even more troubling with EPA’s existing source rule. 

The so-called Clean Power Plan would effectively place EPA in 

the driver’s seat over the States and the Federal Energy Regulatory Commission in transforming how electricity is generated, 

transmitted and consumed in the United States, an influence over 

State electricity systems never contemplated by Congress when it 

adopted the Clean Air Act. 

And given EPA’s preferred reading of its authorities, there is 

only increased influence over energy policy to come. EPA is already 

setting greenhouse gas standards for new and existing oil and natural gas production. 

3 

We have to ask what will be the next EPA interpretation of its 

authority. The administration and EPA’s Administrator admit the 

goal is to reduce massively the use of fossil fuels. That’s the goal. 

But that is not the purpose of the Clean Air Act. Congress did 

not write the Clean Air Act to be the vehicle for taking command 

of State energy planning, the efficient and economical dispatch of 

electricity or the production of oil and gas. 

Congress did not write the Clean Air Act to provide EPA with 

the ability to create new regulatory powers and authorities so it 

can transform the Nation’s energy system. 

Yet, this is exactly what the Agency is doing. And I might add 

that Congress also rejected the idea of cap-and-trade once, yet EPA 

is pushing a back door cap-and-trade policy without congressional 

approval. 

Under the Clean Power Plan, EPA has interpreted the Clean Air 

Act to give itself the power to plan the resource mix of the U.S. 

power sector. 

EPA has created a de facto fuel and renewable energy standard 

for America. EPA and the administration are emerged and engaged 

in blatant favoritism. 

For example, nuclear power plants receive no credit for their continued contribution to carbon emission abatement and wind energy 

by the Interior Department has been given a blanket exemption 

from the Federal Migratory Bird Act and the Eagle Protection Act. And remember, BP was fined $100 million under the Migratory 

Bird Act for the birds that were killed during the Gulf oil spill. So 

this administration is engaged in favoritism as it pursues its carbon future for America. 

I look forward to the testimony of our witnesses today. I would 

remind everyone that 27 States filed a lawsuit against the Clean 

Power Plan, and the Supreme Court issued a stay. 

And don’t forget Larry Tribe, when he testified before this committee, the constitutional lawyer from Harvard, said the Clean 

Power Plan was like picking up the Constitution and tearing it up. 

[The prepared statement of Mr. Whitfield follows:] 

PREPARED STATEMENT OF HON. ED WHITFIELD

When the Obama administration took office in early 2009, Americans were struggling with the worst economic recession in a generation. 

There is no question that today many Americans continue to struggle to make 

ends meet. And there’s no question that during this time period, EPA has continued 

to promulgate thousands of pages of new regulatory requirements each year, with 

a number of major rules imposing annual compliance costs measured in the billions 

of dollars. 

Current estimates put the total EPA’s regulatory compliance burdens, based on 

the Agency’s own numbers, at more than $380 billion per year, or 2.1 percent of 

U.S. GDP. Heritage Foundation researchers added up EPA’s own estimates and determined that annual costs to comply with EPA rules have grown by more than $50 

billion since 2009. 

During my chairmanship, we have held 40 hearings that have looked at various 

EPA rules and proposals that affect—or will affect—the Nation’s energy and industrial sectors. These are the critical sectors for ensuring our Nation’s economic productivity and prosperity. The costs and burdens of EPA’s unrelenting rulemaking 

upon these sectors have been a constant concern. We have seen the impacts of these 

rules in scores of shuttered coal power plants, the delayed and cancelled projects, 

and the destruction of thousands of jobs in communities dependent upon this abundant energy resource. 

But the impact of compliance costs is only part of the story. 

4 

Our hearing record—which reflects testimony from Federal officials, State energy 

and environmental regulators, legal experts, and economists—shows EPA’s highly 

controversial and continuously evolving interpretations of its statutory authorities 

to transform its role from that of a traditional environmental regulator to that of 

the Nation’s ultimate energy regulator. 

We see this firsthand in the EPA’s implementation of the administration’s climate 

change agenda, which is reflected in what is already more than 100 greenhouse gas 

related rules. EPA’s pursuit of greenhouse gas standards for the power sector is a 

case in point. 

The Agency’s new interpretation of its authorities have led to new source standards that effectively prohibit the construction of power plants in the United States 

that use the most advanced, commercially proven clean coal technologies—the kind 

being built today in Japan and around the world. The prospect of this regulation, 

combined with Utility MACT and related rules, has undermined the diversification 

of our Nation’s future energy supply. 

The Agency’s assertion of new authorities to set energy policy is even more troubling with EPA’s existing source rules. The so-called Clean Power Plan would effectively place the EPA in the driver seat over the States and the Federal Energy Regulatory Commission in transforming how electricity is generated, transmitted, and 

consumed in the United States—an influence over State electricity systems never 

contemplated by Congress in the Clean Air Act. 

And given EPA’s preferred reading of its authorities, there is only increased influence over energy policy to come. EPA is already setting greenhouse gas standards 

for new and existing oil and natural gas production. We have to ask, what will be 

next under EPA’s interpretation of its authorities? 

The administration and EPA’s Administrator admit the goal is to reduce massively the use of fossil fuels—but that is not the purpose of the Clean Air Act. Congress did not write the Clean Air Act to be the vehicle for taking command of State 

energy planning, the efficient and economical dispatch of electricity, or the production of oil and gas. 

Congress did not write the Clean Air Act to provide EPA with the ability to create 

new regulatory powers and authorities so it can ‘‘transform’’ the Nation’s energy 

system. Yet, this Agency is pursuing these actions. 

And I might add that Congress rejected the idea of cap-and-trade once, yet this 

EPA is pursuing a back door cap-and-trade policy without Congressional approval. 

Fortunately, the Courts have checked EPA’s overreach in several recent decisions. 

The numerous legal infirmities of the Clean Power Plan have led to an unprecedented stay of those power sector rules by the Supreme Court, pending completion 

of judicial review. 

This morning, we have two panels to discuss the regulatory issues and their practical impacts on States and the energy and industrial sectors. I’m pleased to welcome back Acting Assistant Administrator Janet McCabe, who will testify on EPA’s 

regulatory activity during this administration. 

And I particularly look forward to our second panel, which will provide us the real 

world experience with the Agency’s rules on State energy and environmental regulation. 

Ultimately, it will be up to Congress to ensure EPA stays in its statutory lane 

for environmental standard setting. It will also be up to Congress to take a holistic 

look at the statutes that govern our energy and electricity markets, and energy policy—to ensure our laws enable a growing, productive economy. 

The hearing today will help further develop the record necessary to do this. 

Mr. WHITFIELD. With that, at this time I’d like to recognize the 

gentleman from Chicago, Mr. Rush, 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. 

Mr. Chairman, as the EPA under the Obama administration prepares the legally mandated regulations to protect the air, protect 

the land, and protect the water for all Americans, the majority 

party has insisted on digging its heels and fighting these rules at 

every turn. 

Unfortunately, Mr. Chairman, it is impossible to address the 

most pressing issues associated with climate change if we simply 

5 

follow the example of the Republican Party of putting our collective 

heads deep, deep, deep in the sand and kicking this serious problem down the proverbial road for the next generation to tackle. 

Mr. Chairman, all one has to do is to look at any number of articles that are written daily over the past 5 years alone to read about 

a thousand-year flood, read about the floods that wiping out parts 

of South Carolina and West Virginia even as we speak. 

Mr. Chairman, pick up a daily newspaper, any daily newspaper 

from anywhere around the country at any time over the last year 

or 2, and you can read about the 100-year-old-drought-driven areas 

in the West. 

Mr. Chairman, in fact it seems almost annually that we are witnessing drought-fueled wildfires incinerate millions of acres of forest at a record pace from Alaska to California, claiming the lives 

of firefighters, innocent people, destroying lives and devastating 

livelihoods. 

Mr. Chairman, we understand that the Republican Party has 

never met a regulation that it did not want to kill. We get it. We 

get it, Mr. Chairman. 

However, at some point, the majority party needs to stop simply 

trying to obstruct and follow the lead of President Obama, follow 

the lead of my allies around the world and indeed pretty much 

every other nation on this planet and heed the warning put forth 

by all of the world’s scientists and Mother Earth, Mother Nature 

herself. 

Mr. Chairman, it is not simply enough to rail against the EPA 

for establishing regulations protecting our most sacred natural resources of air, water, just because these rules are perceived to hurt 

the profit margin of certain industries. 

Mr. Chairman, this is the United States of America and not the 

United States of Avarice. Mr. Chairman, there are other worthwhile benefits to society besides how much money a corporation 

earns in a single quarter. 

In fact, Mr. Chairman, the Clean Air Act and the rules associated with it has been one of the most socially, environmentally and 

economically beneficial laws ever enacted by this Congress by anybody’s standard, rather, period. 

Time and time again, we’ve heard from our colleagues on the 

other side of the aisle that the EPA has overstepped its authority 

and is promulgating regulations that would hurt industry, kill jobs 

and bring about the downfall of the American way of life as we 

know it. 

We’ve heard it time and time again. It’s an old record. It’s tired. 

That dog simply does not hunt anymore, Mr. Chairman. And yet, 

the benefits of the Clean Air Act programs have consistently outweighed the costs that we have been warned against at each and 

every time. 

Mr. Chairman, you know as well as I, in a recent report to the 

Congress, the Office of Management and Budget found that in the 

average the 32 major rules promulgated by the EPA between 2004 

and 2014 had benefits between $160 billion and $788 billion compared to costs of just $38 billion to $45 billion. By 2020, Mr. Chairman, the economic benefit of reducing air pollution is estimated at 

almost $2 trillion, exceeding in cost by a 30 to 1 ratio. 

6 

So Mr. Chairman, my friend, instead of always crying wolf over 

the EPA rules, I would urge the majority party to work with those 

of us who want to address one of the world’s most pressing challenges and help find new strategies to address the issue of climate 

change that impacts every man, woman and child in this country 

and around the world—those who are born and those who are yet 

to be born. With that, Mr. Chairman, I yield back the balance of 

my time. 

Mr. WHITFIELD. The gentleman had no time left but you’ll get a 

statement. But Mr. Upton is not going to be with us this morning. 

He’s chairing another conference. And is there anyone on our side 

of the aisle that would like to make some comments? Mr. Shimkus, 

recognized for 5 minutes. 

OPENING STATEMENT OF HON. JOHN SHIMKUS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

Mr. SHIMKUS. And Mr. Chairman, just to welcome our guests. 

Also kind of raise the point that you raised that we did visit a 

supercritical clean power plant in Japan, the Isogo Thermal Power 

Station, and I think the takeaway from many of us was that when 

we talked to other countries that are involved in this debate they 

really create and incentivize and give emissions credits for more efficiencies and lowering CO2. I think our problem is is that we don’t if there was a net benefit 

because of new technology and incentives. Our pathway still is 

using technology that’s not available. There is technology that will 

make power plants more efficient. 

This is a 1,200-megawatt two unit system and they broadly boast 

about the reduction in carbon emissions and they use that in their 

calculations and we don’t see that coming from the administration. 

And to my colleague and friend, Mr. Rush, all our question is 

where does the executive branch get its authority and we don’t 

think the legislative branch should excuse the executive branch for 

any reason for illegally breaking the law by promulgating rules and 

regulations that are not founded in statutory authority. 

That’s part of our debate here today too. So we do welcome you. 

It will be an interesting hearing and I thank you and I yield. 

Mr. WHITFIELD. Will the gentleman yield? 

Mr. SHIMKUS. I will yield. 

Mr. WHITFIELD. I might just point out I read this in one of the 

opening statements of one of our witnesses: Former Energy Secretary Steven Chu even criticized the Clean Power Plan this past 

month, arguing we should make a Clean Power Plan that’s based 

on clean energy, not renewable energy. So even our former Secretary of Energy made that comment about the Clean Power Plan. 

Mr. SHIMKUS. I yield back my time. 

Mr. WHITFIELD. Gentleman yields back. At this time, is there 

anyone on—I see Mr. Pallone is not here. Do any of you all want 

to make any opening statements at this time? 

OK. OK, that concludes the opening statements and we’ve already introduced Janet McCabe, who’s the Acting Assistant Administrator of the Office of Air and Radiation, U.S. Environmental Protection Agency, a native of Indiana, and Ms. McCabe, we appreciate your being with us today and you’re recognized for 5 minutes 

7 

for your opening statement, and then I’m sure there will be a few 

questions for you. 

So thanks for being with us. You know the drill. The microphone, 

red light, and all that. So thank you. 

STATEMENT OF JANET McCABE, ACTING ASSISTANT ADMINISTRATOR, OFFICE OF AIR AND RADIATION, ENVIRONMENTAL 

PROTECTION AGENCY 

Ms. MCCABE. Thank you, Chairman Whitfield and Ranking 

Member Rush, who had to step away and all the members of the 

subcommittee. Thank you so much for inviting me here to testify 

today on EPA’s regulatory efforts under the Clean Air Act. 

The mission of EPA is to protect public health and the environment and the Agency’s regulatory efforts further those goals. We 

are guided in meeting those goals by science and by the law, which 

serve as the backbone for each of the Agency’s actions. 

For over four decades we have cut air pollution in this country 

by 70 percent and the economy has more than tripled. I will focus 

my opening statement on providing more detail for three rules, 

which will provide tremendous benefits to public health and the environment and they’ve mostly been mentioned already this morning—the Clean Power Plan, the methane standards for the oil and 

gas industry and the ozone national ambient air quality standards. 

Climate change is a tremendous environmental and public health 

challenge. The most vulnerable among us including children, older 

adults, people with heart or lung disease and people living in poverty may be most at risk from the impacts of climate change. 

Fossil fuel-fired power plants are by far the largest stationary 

source of U.S. CO2 emissions. Using authority under the Clean Air 

Act to address these emissions, the EPA finalized the Clean Power 

Plan last August. 

Although the Clean Power Plan has been stayed by the Supreme 

Court, we are confident that it will be upheld because it rests on 

strong scientific and legal foundations. 

Since the stay was issued, many States have been moving forward voluntarily to cut carbon pollution from power plants. They 

have also asked EPA to continue our outreach and development of 

supporting information and tools that will help guide States when 

the Clean Power Plan becomes effective which we’re doing while 

ensuring that we fully comply with the stay. For example, we recently proposed design details for the optional Clean Energy Incentive Program to address State requests for additional clarification 

as States consider their options to reduce carbon pollution. 

In May, EPA announced steps to further reduce methane and 

other harmful air pollutants from new and modified sources in the 

oil and gas industry along with the critical first step in tackling 

methane emissions from existing sources. 

These steps will help combat climate change and reduce emissions of other harmful air pollutants. These standards build on the 

Agency’s 2012 rules by adding requirements that the industry reduce emissions of greenhouse gases using readily available and cost 

effective technology and by covering hydraulically fractured oil 

wells along with additional equipment and activities that were not 

covered in the 2012 rules. 

8 

They also required owners and operators to find and repair leaks, 

which can be a significant source of emissions. These final standards reflect significant stakeholder input and in particular provide 

companies a pathway to demonstrate that requirements under a 

State rule are comparable to requirements in the final rule. 

This would allow sources to comply with a specific final rule requirement by complying with a State regulation. We know that existing sources in the oil and gas sector also emit substantial 

amounts of methane and as a first step in the regulation of these 

sources we’ve issued a proposed information collection request, or 

ICR. 

When finalized, it will require companies with existing operations to provide information on technologies and costs that are 

critical to the development of reasonable regulations. In addition, 

EPA plans to seek voluntary information on innovative strategies 

that can accurately and cost effectively locate, measure and mitigate methane emissions. 

The draft ICR was published early in June and the first of two 

public comment periods will last for 60 days. Finally, in October of 

last year, the Agency completed the periodic review of the national 

ambient air quality standards, or NAAQS, for ground level ozone. 

We have a primary standard directed at protecting public health 

and a secondary standard directed at protecting public welfare, for 

example, trees, plants and ecosystems. 

Exposure to ground level ozone can harm the respiratory system, 

aggravate asthma and lung diseases and is linked to premature 

death. These health impacts impose significant costs on Americans 

and can adversely affect their daily lives through missed school and 

work. 

The Clean Air Act requires EPA to review the NAAQS every 5 

years to make sure the standards continue to protect public health 

with an adequate margin of safety. 

Based on the law, a thorough review of the science, the recommendations of the Agency’s independent science advisors, assessment of EPA experts and after extensive public engagement 

and opportunity to review and comment at many steps along the 

way, the Administrator determined that the appropriate level to 

protect the public health with an adequate margin of safety was 70 

parts per billion. 

The two-step process of a science-based NAAQS review followed 

by implementation is a system that works. EPA and State, local 

and tribal co-regulators share a long history of successfully managing and improving air quality. 

For ozone, existing and proposed Federal measures like vehicle 

standards and power plant rules are reducing and will continue to 

further reduce ozone pollution nationwide. 

We expect that the vast majority of counties outside of California 

will meet the 2015 ozone NAAQS by 2025 without having to take 

any additional action beyond those Federal measures. 

Again, I thank the subcommittee for inviting me here today and 

I look forward to your questions and the discussion on these and 

other EPA actions. 

[The prepared statement of Ms. McCabe follows:] 

9 

10 

11 

12 

Mr. WHITFIELD. Ms. McCabe, thank you very much for your 

opening statement and I’ll recognize myself for 5 minutes of questions. 

When the Clean Power Plan was being discussed, one of the comments that was frequently made by any representative of EPA was 

that we were providing maximum flexibility to the States. 

And yet, the reality is that in your so-called building blocks 

where States can go to natural gas or they can go to renewable energy they simply don’t have that option. It’s simply not there to the 

extent necessary. 

So many critics say that that flexibility argument—we’re giving 

maximum flexibility to the State—is really a red herring, that 

there is no flexibility for those States that have that unique problem facing them. 

I mean, do you agree with that or do you just feel like oh, if you 

work hard enough you can—I mean, you all arbitrarily set the CO2

standard for every State. So this flexibility argument you honestly 

believe that these States have the flexibility to meet this requirement? 

Ms. MCCABE. I do, Mr. Chairman, and I can explain why. 

First of all, I think it’s important for me to say that the goal for 

each State was in fact not arbitrarily set. It was set after very careful evaluation of—— 

Mr. WHITFIELD. Who set it? 

Ms. MCCABE. The EPA rulemaking sector. 

Mr. WHITFIELD. Yes, EPA set it. 

Ms. MCCABE. But not arbitrarily. It was based on information 

and data collected from the industry from States. 

Mr. WHITFIELD. Well, some States would disagree with that. I’ve 

talked to many of them, and they view—even though you went 

through a process, that you set the standard. 

Ms. MCCABE. Well, there’s a difference between who set the 

standard and whether it was set arbitrarily. I was taking issue 

with the use of the word arbitrary, and the record lays out—people 

can disagree and certainly do disagree that we made the right 

choice or that we evaluated the data appropriately. 

Mr. WHITFIELD. Why do you think the Supreme Court issued a 

stay of the Clean Power Plan? 

Ms. MCCABE. Because this is a very important issue, and they 

felt that as courts have done before—— 

Mr. WHITFIELD. So you don’t feel like that they had any questions on the legality of it, that they simply stated because it was 

such an important issue? 

Ms. MCCABE. They gave no indication of their reasoning. No 

court has spoken to the substance—— 

Mr. WHITFIELD. But your interpretation is it was so important 

that they stayed it? 

Ms. MCCABE. That’s how I understand it. This is—— 

Mr. WHITFIELD. That’s your understanding. 

Ms. MCCABE [continuing]. Courts sometimes do stay regulations 

while they’re going through review. 

Mr. WHITFIELD. Uh-huh. Now, let me ask you this question. Despite the stay of the Clean Power Plan, last week EPA published 

13 

a 44-page proposed rule setting forth the details for Clean Energy 

Incentive Program and requesting comments by August 29th, 2016. 

The purpose of the program is to incentivize early action by 

States to comply with the Clean Power Plan. Now, if a State or affected stakeholder does not comment on this proposed rule during 

the public comment period, will they have foregone their right to 

comment on the rule? 

Ms. MCCABE. This is a completely voluntary program, and people 

are welcome to comment on it during the comment period. 

Mr. WHITFIELD. Well, the rule is not final yet, is it? Or is the 

rule final yet? OK. 

Ms. MCCABE. No, it isn’t. It’s proposed. 

Mr. WHITFIELD. But you’re saying that it’s not going to be mandatory? It’s going to be voluntary? 

Ms. MCCABE. Absolutely not mandatory. It’s an early action opportunity that’s provided in the Clean Power Plan. It’s not—— 

Mr. WHITFIELD. Will there be a final rule? 

Ms. MCCABE. If the Agency finalizes it, it will—— 

Mr. WHITFIELD. And does the EPA plan to finalize the rule before 

the end of this administration? 

Ms. MCCABE. I can’t speak to the schedule. But I expect that the 

Agency will move to finalize the rule. 

Mr. WHITFIELD. Now, if the EPA does finalize this rule, how 

would this comport with the stay? 

Ms. MCCABE. We believe that this is not—taking this action is 

not inconsistent with the stay, and this may come up again this 

morning. We consult regularly with our lawyers at the Department 

of Justice. 

The stay precludes EPA from implementing the Clean Power 

Plan. EPA is doing nothing to implement the Clean Power Plan. 

Mr. WHITFIELD. Now, do you think there is universal agreement 

to what you just said, or do you think there are opposing views to 

what you just said? 

Ms. MCCABE. I wouldn’t want to speak for other people. There 

are usually a variety of views on everything that EPA does. 

Mr. WHITFIELD. So that’s EPA’s view, right? 

Ms. MCCABE. It’s the EPA’s view. It’s the Department of Justice’s 

view, and we are being very, very careful about this, Mr. Chairman. 

Mr. WHITFIELD. OK. Because I remember you all making very 

strong comments that you had every faith and confidence that a 

stay would not be issued by the Supreme Court. 

Ms. MCCABE. We did believe that to be true. I think many people 

believed that to be true. 

Mr. WHITFIELD. Well, a lot of us did not believe that to be true. 

Anyway, thank you very much, and my time is expired. I recognized the gentleman from Illinois, Mr. Rush, for 5 minutes. 

Mr. RUSH. Ms. McCabe, I really appreciate you coming before the 

subcommittee for the umpteenth time to deal with this issue, and 

if one didn’t know any better they might think that the majority 

party really, really, really has it out for your agency. 

And you’re aware the premise of today’s hearing is that EPA has 

repeatedly overstepped its authority and is really nearly issuing 

14 

burdensome new rules that will kill jobs and send the American 

economy down the tank. 

You’ve heard these claims many times before the Republican 

Party cried wolf when it comes to actual cost and benefits attributed to Clean Air Act rules and other regulations issued by your 

agency. 

We all understand that facts are not always the driving force behind many of these claims, and as a matter of fact it seems as 

though facts are standing in the way of a lot of these claims. But 

they keep coming anyway. I would like for you at some point in 

time during my questions to really focus on separating the, for this 

subcommittee, some of the truth of the ever present fiction that’s 

in the room. 

In my opening statement, I stated there were societal benefits associated with EPA rules. They go far beyond the quarterly earnings 

of certain industries. 

Can you state some of the additional benefits to the EPA’s regulatory framework that impacts all Americans? 

Ms. MCCABE. Yes, sir. Thank you for the question. 

It’s clear that air pollution has significant impacts on public 

health across this country. That includes increased risk of asthma 

attacks, other respiratory illnesses, premature death, other sorts of 

health impacts that mean missed work days, missed school days for 

children and parents need to stay home. 

These are real everyday issues that families across the country 

have to deal with. When it comes to climate we know that climate 

is changing, we know that that is having impacts that is being reflected in increased wildfires, increased droughts, increased flooding, increased violent storms, some of the things that you mentioned yourself, Congressman Rush. 

These are having real impacts on people, on their health, on 

their economic well-being and their ability to live their lives in this 

country. 

Mr. RUSH. Well, besides the health status of Americans and I’ve 

noticed for the last 25 years I’ve seen—I know more and more people, more and more families who are victimized by asthma over the 

last 25 or so years. 

So the health issues are really, really troubling and a critical 

stage for our Nation. But what are some of the economic benefits 

associated with the EPA rules, particularly in areas of spurring 

new technology and innovations in transportation and electricity 

and in manufacturing sectors? 

Ms. MCCABE. Yes. That’s absolutely been the case. The rules 

over the years have spurred the creation and invention of pollution 

control technology which not only employs people here in the 

United States installing and designing that but is an exported 

product that the United States exports around the world, which 

brings, again, value back to the United States. 

Mr. RUSH. So from a perspective of the health benefits to the Nation and the economic benefits to the Nation, you made an overall 

assessment of the work that the EPA has done in the past. Let’s 

just take from the past to the present. 

Ms. MCCABE. Well, each time EPA does a rule of economic significance we follow OMB requirements and do a cost benefit analVerDate Mar 15 2010 13:52 Dec 13, 2016 Jkt 037690 PO 00000 Frm 00018 Fmt 6633 Sfmt 6633 F:\114THCONGRESS\114X156EPAREGSENERGYASKOK121316\114X156EPAREGSENE
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ysis, and as you alluded to in your opening remarks the net benefits of the EPA rules have numbered in the billions of dollars over 

time, far outweighing the costs of each one of those rules. 

Mr. RUSH. Mr. Chairman, I want to thank you for your kindness 

and I yield back. 

Mr. WHITFIELD. Gentleman yields back. Thank you. 

At this time. I’d like to recognize the gentleman from Texas, Mr. 

Olson, for 5 minutes. 

Mr. OLSON. I thank the Chair. 

I thank you, Ms. McCabe, for joining us again today. Hope you 

had a happy 4th of July. 

We sometimes disagree, sometimes strongly. But the folks back 

in Texas 22 appreciate your willingness to come before this committee. 

My first question concerns your budget documents. You stressed 

that the Clean Power Plan goes far beyond traditional end of the 

pipe regulation. 

In your fiscal year 2016 submittal to Congress you stated, and 

I quote, ‘‘the breadth and uniqueness of the Clean Power Plan 

rulemakings will require that the Agency devotes significant resources to its implementation. 

Traditionally, the EPA’s regulatory analysis would focus on only 

emitting sources and end of pipe controls. The existing power plant 

rule requires that the EPA look at the emission control strategies 

that are either shifting generation away from higher emitting 

plants or reducing the need for generation in the first place,’’ end 

quote. 

That sounds to me like you all wrote the law. As you know, only 

Congress writes the law. Article one, section one is very clear. All 

legislative powers herein granted shall be invested in a Congress 

of the United States which shall consist of a Senate and a House 

of Representatives. 

Where in the Constitution or statute has Congress authorized 

EPA to go from end of pipe controls to generation shifting? Where 

is this in this document? Please tell me? 

Ms. MCCABE. It’s actually—Congressman, it’s in Section 111(d) of 

the Clean Air Act, which is where our authority comes from. The— 

that section directs us to look at the approaches and controls that 

industry uses in order to develop our regulations that set reasonable standard for sources under 111(d). 

It is not misdirected to end of pipe controls and we made—have 

studied the ways that the utility industry has found ways to reduce 

not just carbon but other air pollutants over the years. And so our 

rule was grounded very much in the types of approaches that that 

very industry has been using. 

Mr. OLSON. But that’s a big change. End of pipe to all these 

other things, that’s Congress’ job. That’s our job. That’s lawmaking. 

One further question about the rule of law. Do you believe the EPA 

has the authority to compel the future generation shifting from 

natural gas to renewables—not coal but natural gas to renewables? 

Do you have that authority? The same authority you’re using now? 

Ms. MCCABE. Our job is to develop rules that reduce air pollution. That’s our job under the Clean Air Act, setting technologyVerDate Mar 15 2010 13:52 Dec 13, 2016 Jkt 037690 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 F:\114THCONGRESS\114X156EPAREGSENERGYASKOK121316\114X156EPAREGSENE
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based standards following the direction that Congress gave us in 

Section 111(d). 

We are not requiring any particular fuel to be used. We are providing broad opportunities for the industry to use the kinds of approaches that they use and would choose to use. 

Mr. OLSON. Well, you’re banning one source of power from being 

used—coal—for sure. I mean, you say you’re not choosing that, but 

you are, ma’am. The real world says you are choosing power 

sources. You are picking winners and losers. 

My second question is about the technological advancements that 

have allowed our country to emerge as the number-one producer in 

the world of oil. In fact, a study came out from Norway this past 

week. 

A 3-year analysis confirmed that by 2020 America will have 264 

billion barrels of recoverable oil compared to 256 billion barrels 

with Russia and 212 billion barrels with Saudi Arabia. We are 

number one, man. 

America is number one again. My own State of Texas has been 

at the front of this revolution even with today’s energy prices and 

that’s why I am stunned to see concerns coming from the largest 

and most efficient oil and gas regulators in America, the people in 

Texas, the railroad commission when it comes before your agency. 

Is it correct that EPA’s new regulations will cause natural gas 

and crude oil production levels to decline? Yes or no? 

Ms. MCCABE. I don’t believe it will, sir. 

Mr. OLSON. Well, ma’am, according to your economic impacts discussed in your final rule on Page 35,886, it says it does just that. 

A follow-up question—is it correct that EPA’s new methane regulations will make the U.S. more reliant on foreign energy imports? 

Yes or no. 

Ms. MCCABE. I don’t believe that that’s correct, sir. 

Mr. OLSON. Same thing. Page 35,886. Your final rule says it will. 

I yield back. 

Mr. WHITFIELD. Gentleman yields back. At this time I recognize 

the gentleman from California, Mr. McNerney, for 5 minutes. 

Mr. MCNERNEY. I thank the chairman and I also submit with 

due respect that this is really a political hearing. Ms. McCabe, I’m 

going to ask some questions about exceptional events. 

How often have public entities filed for exceptional events at the 

EPA? 

Ms. MCCABE. I don’t have an exact number, Congressman, but 

I would be happy to get you one. It’s been a number of times. 

Mr. MCNERNEY. OK. And how often are those approved, those 

exceptional event requests? 

Ms. MCCABE. We’ve approved a number of them, and some of 

them we have not. 

Mr. MCNERNEY. OK. Moving on—there’s been talk in this committee about exceptional events. My office has talked to yours 

about exceptional events. Is the EPA working on anything that 

would modify exceptional events to take place during prolonged 

droughts and how much can be done on the regulatory side. 

So, basically, I’m asking are exceptional droughts going to be 

considered for exceptional events in the future? 

17 

Ms. MCCABE. Yes, this is a very challenging situation, Congressman, especially as we see more and more drought coming. So 

drought in itself is not considered an exceptional event. 

We are working with the States and with all stakeholders to try 

to find ways to make sure that we make this process as reasonable 

as possible and reflect that there can be situations in which there 

are high dust events that may be able to be considered exceptional 

events. 

Mr. MCNERNEY. Well, that’s good because as you know we’re 

having a prolonged drought in the valley in California and it’s 

making a very challenging situation for our districts. 

Technological advancements on the electrical grid from transmission through end use have helped improve efficiency and reduced emissions. Many utilities have embraced the Clean Power 

Plan, including those in my own home State of California. 

Can you talk about the Clean Energy Incentive Program and 

how it will help further promote innovative technologies? 

Ms. MCCABE. Sure. One of the—one of the strengths that we feel 

of the Clean Power Plan is the openness that States have to bring 

in a use energy efficiency as a way to reduce their carbon emissions 

and there’s many, many programs across the country many of 

which have been spawned and encouraged at the State and local 

level that are being very effective in bringing not only emissions 

down but also bringing value to the communities in which those 

technologies are installed. 

Some of these are industrial applications, commercial applications and residential applications and we think that both through 

the Clean Energy Incentive Program, which is our voluntary early 

action program, but also throughout the life of the Clean Power 

Plan there—because those types of approaches are often very cost 

effective to implement that States will want to choose to invest in 

those. 

Mr. MCNERNEY. So we’re talking about creating jobs through developing new technologies? 

Ms. MCCABE. Absolutely, and then implementing those technologies in our communities. 

Mr. MCNERNEY. Now, I personally believe that implementing the 

Clean Power Plan will not result in a much higher—any electricity 

prices and I see a parallel between this and the sulfur dioxide 

emissions through the cap-and-trade program. Is that your thinking as well? 

Ms. MCCABE. Well, we looked at that in our regular impact analysis and we predicted that in part because of the increased use of 

energy efficiency approaches that electric bills will actually go 

down in 2030 when the program is fully implemented. 

Mr. MCNERNEY. So some of the statements we’re hearing might 

actually scare consumers but in reality we expect lower or even 

electricity prices? 

Ms. MCCABE. That’s what our analysis showed. 

Mr. MCNERNEY. You mentioned a proposed innovative collection 

request—information collection request for oil and gas industry related to methane emissions. How difficult is it to locate, measure 

and mitigate methane emissions? 

18 

Ms. MCCABE. This is an area of very rapid development the industry is working very hard on it and there are many others in the 

research fields as well as at EPA that are working on these issues 

and across the Federal Government. So that’s why we’re going to 

put out a call for innovative ideas. 

There are great advances in how people can detect emissions and 

it’s important to remember that any leak of this material is leak 

of a product that can be sold. It’s not just a loss of a natural resource. It’s actually a valuable product. 

So the industry itself has great incentive to find these leaks and 

fix them. And so detecting leaks and then also on the mitigation 

side. 

Mr. MCNERNEY. Does the EPA currently have any data on that, 

on collection emissions or detecting emissions? 

Ms. MCCABE. We do. We do that through our greenhouse gas 

emissions inventory program. Every year we collect information. 

Every year people are finding ways to be more accurate and more 

complete in that information. 

Mr. MCNERNEY. Are emissions, or capturing fugitive emissions, 

is that improving? 

Ms. MCCABE. Yes, it is and will continue to, for sure. 

Mr. MCNERNEY. All right. Thank you, Mr. Chairman. 

Mr. WHITFIELD. The gentleman’s time has expired. At this time 

I’ll recognize the gentleman from Texas, Mr. Barton, for 5 minutes. 

Mr. BARTON. Thank you, Mr. Chairman. 

Would you define just as concisely as you can what you think the 

mission statement of the EPA is? 

Ms. MCCABE. To protect the health and the environment, implementing the laws that Congress has passed. 

Mr. BARTON. Say that again. 

Ms. MCCABE. To protect public health and the environment, implementing the laws that Congress has passed. 

Mr. BARTON. OK. I’ll accept that. 

Do you know how many pages of rules the EPA has issued since 

2009 to try to be generous to do what you just said? 

Ms. MCCABE. I don’t know the number of pages, Congressman. 

Mr. BARTON. If I were to tell you that according to the majority 

staff it was 33,841 would you accept that? 

Ms. MCCABE. I would not disagree with you. I don’t have any 

reason to know what the number is. 

Mr. BARTON. OK. Well, that’s what the majority staff memo says: 

3,924 rules encompassing 33,841 pages. 

Now, some of the major rules, and again, this is according to the 

majority staff so you can dispute this, the Clean Power Plan, the 

carbon pollution standard for power plants, mercury and air toxic 

standards for power plants, cross-State air pollution rules for 

power plants, coal ash rule for power plants, effluent guidelines for 

power plants, which would be—which would be water, wouldn’t be 

air—316(b) rule for power plants, which again would be a water 

rule, not an air rule. 

Air rules for the oil and gas industry, actions to reduce methane 

emissions from the oil and gas industry, the Boiler MACT, the Cement MACT, the Brick MACT, the Ozone NAAQS, the SO2 

19 

NAAQS, the PM 2.5 MACTS and the RMP rule—those are the 

major—the 16 major rules. 

Now, using 2008 as the baseline, can you tell me how all of these 

rules have improved air quality in the United States? 

Ms. MCCABE. Well, that’s a large variety of rules addressing a 

number of things. They all come from requirements—— 

Mr. BARTON. OK. I’m not asking you where they come from. I’m 

taking you at your word which you say the mission statement of 

the EPA is. I have outlined to you how many rules you—not you 

personally but your agency—has issued. I’ve outlined the major 

rules according to the majority staff and I’ve asked you a basic 

question. 

How much have all of those rules improved air quality in the 

united States? Ten percent? Five percent? Zero? You know, you can 

measure it by ozone reduction, particulate matter, however. 

Surely, your agency has a metric to track how all of these rules 

are meeting your mission statement. I’m asking you what it is. 

Ms. MCCABE. We do have metrics and I would be happy to provide specific numbers. SO2 emissions have gone done considerably 

in this country. Ozone levels have gone down. Ninety-five percent 

of the areas that did not meet the 1997 ozone standard now meet 

it. 

Mr. BARTON. So can you give me or give the committee a specific—you can do it by rule, you can do it generically. My seat-ofthe-pants nonscientific estimate is it hasn’t had an impact. Has not 

changed the basic air quality 1 percent. 

Ms. MCCABE. We would—— 

Mr. BARTON. Now, you can prove me wrong and I’m happy to see 

it but I want it statistically. I want it engineering scientifically 

proven. 

What I can tell you is that you have impacted—not you personally but EPA has impacted the economy by billions of dollars. You 

have killed the coal industry, basically. Killed it. Which, to his 

credit, President Obama said he wanted to do. 

But I want to give you a specific example. This is a power plant 

that’s not in my district. It’s in Congressman Flores’ district. 

It’s a Big Brown plant right outside of Fairfield, Texas, in Freestone County. That is a coal-fired power plant that’s been there approximately 50 years. It employs about 500 people directly and is 

the single biggest economic generator in Freestone County. 

It’s probably going to close in the next year or so because of some 

of these rules. It’s just—they can’t meet the compliance costs and 

they’re just going to probably have to close the plant. 

If that happens and if you’re still at the EPA I want you to go 

to Fairfield, Texas with Congressman Bill Flores and explain to 

those people who’ve lost their jobs how you’ve improved their environment. 

I want you to do that, because I don’t think it’s possible. And, 

you know, I voted for the Clean Air Act amendments in 1991. I 

want clean air. 

I want clean water. But I don’t want an organized attack on the 

energy-producing sector of America because of, to use Mr. 

McNerney’s term, a political decision to go after hydrocarbons. And 

with that, Mr. Chairman, I yield back. 

20 

Mr. WHITFIELD. Gentleman’s time is expired. At this time I’ll recognize the gentleman from Texas, Mr. Green, for 5 minutes. 

Mr. GREEN. Thank you, Mr. Chairman and Ranking Member, for 

holding the hearing. I want to thank Acting Administrator McCabe 

for being here and the EPA’s regulatory activity is the subject of 

much debate and we’re happy to have you before our committee 

once again to discuss the issues. 

The EPA’s Clean Power Plan changed significantly from the proposed rule and the final product. My understanding was that the 

EPA wanted to be responsive to stakeholder feedback including 

many concerns brought up by industry. The EPA proposed Federal 

implementation plans on October 23rd of 2015. 

The final rule indicated a 90-day comment period that ended in 

January of 2016. Did the Agency extend that comment period? 

Ms. MCCABE. I don’t believe we did, Congressman, but it’s closed 

now. So we’re considering all the comments that we got. 

Mr. GREEN. OK. How many comments had the Agency received? 

Ms. MCCABE. Oh, gosh, on the Federal plan I’m not sure. But we 

received many hundreds of thousands of comments on the Clean 

Power Plan and its various pieces over the years. 

Mr. GREEN. What type of—— 

Ms. MCCABE. Millions, in fact. 

Mr. GREEN. OK. What type of feedback has the Agency received? 

Ms. MCCABE. Well, if you’re speaking about the Federal plan and 

the model rules we’ve got a lot of feedback on the how those rules 

can help States as they design their plans, very constructive feedback on how to make the rules workable for States while preserving the flexibility that the States have under the plan. 

Mr. GREEN. What did EPA do to respond to those millions of 

comments? 

Ms. MCCABE. Well, in the—— 

Mr. GREEN. Just a general—did you modify the plan or did 

you—— 

Ms. MCCABE. In the Clean Power Plan itself, yes, we made a 

number of changes in response to the comments both on process 

issues, on our evaluation of the underlying data in response to additional data that we got, which is a routine occurrence when we 

get good input from people in a rule making. 

Mr. GREEN. OK. Well, in Texas, obviously, we are an oil and gas 

State, and my Pennsylvania and Ohio friends tell me we burnt dirt 

and call it coal in central and east Texas. But we invest significant 

amounts in wind power—in fact, the largest wind power production 

of any State. 

I’d like to see the same thing done for solar. How does EPA envision the Clean Energy Incentive Program encouraging new solar 

construction? 

Ms. MCCABE. The way the Clean Energy Incentive Program 

works, which as I’ve said already this morning is voluntary if the 

State chooses to proceed with it, would incentivize renewable energy and also energy efficiency by providing additional allowances 

into the trading system that we expect States will set up. 

So it just provides a little extra bump for those technologies to 

get going early in the system and provide the energy that is carbon 

free. 

21 

Mr. GREEN. OK. The EPA wants to establish credit reserve and 

we’re running the verification authenticity issues within the renewable fuel standard. I’d prefer not to see that again. How does the 

EPA plan to verify and authenticate credits under the CEIP, the 

Clean Energy Incentive Program? 

Ms. MCCABE. Very good question. So there are—because there is 

a lot of work already underway that doesn’t have to do with EPA 

for people to generate credits for energy efficiency under State programs, there are already systems in place that allow people to appropriately verify that the reductions are real and we are relying 

a lot on those systems not creating something wholly new. 

Mr. GREEN. And finally, the EPA had begun collecting information on existing oil and gas production wells. Given that there are 

approximately 40,000 oil and gas wells in the U.S., what challenge 

does the EPA foresee in regulating existing sources in a correlator 

that so many of these wells are small producing wells that make 

up maybe 10 percent of the total production? 

Is there any discussion in EPA to exempt out those smaller 

wells? Because if they are only 10 percent of the production you 

would think that that would be, you know, not as big a problem 

as the other 90 percent. 

Ms. MCCABE. This is exactly why we need to collect this information. We are very far from making any decisions or even recommendations about what our rule would look like. 

But until we have this kind of information that can help us understand where the real significant emissions are, how much it will 

cost and what technologies are available to address them, we can’t 

really move forward with those rules which is why we’ve got to collect the information. 

Mr. GREEN. OK. Mr. Chairman, thank you. I yield back. 

Mr. WHITFIELD. Gentleman yields back. 

At this time I recognize the gentleman from Illinois, Mr. Shimkus, for 5 minutes. 

Mr. SHIMKUS. Thank you, Mr. Chairman. 

So many questions, so little time. So I’m just going to jump into 

some of the points. I love the hearings because I love to pick up 

where other people have talked about to other than what’s been 

prepared for us to ask. 

To my colleague Mr. Barton, he cited one power plant. I can cite 

three in Illinois—Wood River, Baldwin, Newton—all are at major 

risk of closing. That’s why—that’s why I want to talk about this 

new power plant in Japan. 

If there is a way we could transition and incentivize 

transitioning older generation to new generation then we’d give 

these workers some hope. We’d give coal miners some hope. 

But under the 111(b) standards we can’t build this power plant 

and this is the cleanest most perfect plant we can build with technology right now. Well, we can’t—the Japanese built it. OK. 

And so a major coal mining company just announced two days 

ago they’re laying off 4,400 workers—4,400. So when we talk about 

the benefits which you laid out, I’m sure maybe we can sell some 

new technology. 

You have to consider the loss. You have to really appreciate the 

job dislocation that’s occurring in major coal-producing areas in our 

22 

country, and if there’s emotions and if there’s politics behind that’s 

because we’re the ones that have to talk to the coal-mining families. 

We’ve got to talk to the mayor and the county board chairman 

who are losing their major source of revenue because of power 

plants going to close. 

So we don’t see that in your—we never see that in the analysis. 

When Congressman Barton read the numerous rules and regs—I 

have done that before too—in your analysis you always take, like, 

the Clean Power Plan and say this is the cost, this is the benefit, 

boom. 

You never do the cost of the cumulative aspects of regulation. 

They pile on. In fact, I would say the costs are exponential versus 

additive. 

And so that’s the crushing effect that’s really occurring in coalfired power plant communities and in coal mining communities 

across this country, and I think the Supreme Court—this is the 

first EPA rule and reg that they stayed. 

This is not like—this was a major deal for them to do that, and 

so the question should be asked is why. The answer is because we 

have successfully made the argument that if a rule is being litigated the pencil should go down. 

You can’t force compliance when the final decision has been 

made on the legality of the rule or reg because if you force them 

to keep moving they’ll shut down. They’ll close. And then as we 

saw in other regs, oh no, we were wrong—we illegally promulgated 

this rule. 

So the Supreme Court said no, stay. So that kind of brings me 

to the—one of the questions that I wanted to ask. In the wake of 

the stay, EPA officials have stated that certain compliance deadlines in the Clean Power Plan may not be penalized should the 

stay be lifted, the suggestion being here that States and other 

stakeholders should be prudent to being voluntarily preparing now 

for rule implementation in case its legality is upheld. 

OK. First of all, pens should go down. You ought to be telling 

people, prepare for a rule that we don’t know if it’s going to be 

legal or not. So here’s the question: 

Should parties granted the stay by the Supreme Court in any 

way be penalized if they take no action on the Clean Power Plan 

or EPA’s derivative programs and guidance during pendency of the 

litigation? 

Ms. MCCABE. We are absolutely not implementing—there are no 

expectations that any State, down State or not, has any obligations 

currently under the Clean Power Plan. 

Mr. SHIMKUS. Yes, the question is should they be penalized. You 

still have closing of the windows. You still have comments going. 

What if they say we’re not going to make comments until we have 

a final ruling from the Supreme Court? 

Ms. MCCABE. But I don’t see that as a penalty, Congressman. It’s 

their choice whether they want to comment or not. But that particular rule—— 

Mr. SHIMKUS. But will you shorten the time frame? I mean, are 

you going to now say you’re not prepared to meet it? I’m assuming 

it’s not going to be ruled favorably. I’m going to assume that it’s 

23 

because you’ve morphed the Clean Air Act and you’ve provided 

powers to the Agency that weren’t granted under the original legislation. So I think the Supreme Court is going to say it’s illegal. 

But assuming it is, the question is if States say we’ve got to stay, 

we’re not doing anything, many people are concerned that you are 

moving forward regardless of the stay offered by the Supreme 

Court. 

Ms. MCCABE. Well, I’ll just say again, Congressman, that with— 

in close consultation with the Department of Justice there is nothing that we are doing now that implements the Clean Power Plan 

in any way. 

That was what was stayed. The Supreme Court did not stay all 

action on climate. It didn’t stay action by States, that they may 

choose to take on climate. 

It didn’t stay efforts by EPA to provide assistance to States when 

they ask us for that assistance, which they have done, including 

that we move forward and provide more details on the Clean Energy Incentive Program. 

Mr. SHIMKUS. Thank you very much. 

Mr. WHITFIELD. The gentleman’s time has expired. 

At this time, I will recognize the gentleman from New York, Mr. 

Tonko, for 5 minutes. 

Mr. TONKO. Thank you, Mr. Chair, and thank you, Administrator 

McCabe, for your hard work and for your appearance here today. 

This is just the latest in a series of hearings to push a message 

that strengthening standards to protect our public health and the 

environment are too costly, unachievable or a drag or a drag on our 

economy. 

Couple of observations—I would think that the greatest—one of 

the greatest impacts on the coal-fired industry happens to be falling natural gas prices. And then further evidence is clear that the 

public health and environmental benefits of Clean Air Act regulations have far outweighed the costs of pollution reduction and we 

owe it to the next generations—generations unborn to clean our 

air. 

Because of the Clean Air Act, we have grown our economy, created jobs and innovated new solutions to pollution controls. In the 

United States, leaks from oil and gas wells are the largest source 

of methane gas in the atmosphere. 

In April, the EPA released a report that concluded methane from 

oil and gas leaks makes up about a third of total methane emissions. 

In May, EPA announced steps to reduce those methane emissions. We often hear about carbon emissions but Administrator 

McCabe, can you explain how curbing methane emissions will indeed help combat climate change? 

Ms. MCCABE. Yes, Congressman. As some of you may know that 

methane is about 25 times more potent as a climate pollutant than 

carbon dioxide. So even though CO2 is emitted in far greater 

amounts, methane is a very serious contributor to climate change. 

You correctly noted that the extent of the emissions of methane 

from the oil and gas industry many of those emission are unintentional. They are leaks. They are not necessary, and there is technology that is available. Several States are well on their way to— 

24 

have already put in place like the ones that EPA just finalized to 

regulate these emissions. 

So that’s making a huge contribution to, as you say, our health 

today and future generations. 

Mr. TONKO. Thank you. And when EPA is going through a rule 

making process, are there significant opportunities for stakeholders 

to provide input in the pending regulation? 

Ms. MCCABE. There absolutely are. There are, of course, the formal opportunities for public comment when we do a proposal. 

But EPA operates routinely in the Office of Air and Radiation 

where I work, by doing extensive outreach to the stakeholders 

which includes the industry, first and foremost. We can’t develop 

these rules if we don’t have good relationships with the industry 

where we get good information from them. 

We also work extensively with the States who are our co-regulators and actually are on the ground putting these programs in 

place and making sure that they achieve the benefits that they are 

designed to achieve. 

So far before we put pen to paper on a proposal, we have had 

extensive discussions with the industry and other stakeholders. 

Mr. TONKO. Well, for the recent—and I thank you for that. For 

the recent methane rule, I am informed that EPA received more 

than 900,000 public comments and held a number of public hearings. Is that in fact correct? 

Ms. MCCABE. That is correct. 

Mr. TONKO. And the regulation was finalized after giving consideration to cost benefit analyses and technical justification. Is that 

correct? 

Ms. MCCABE. That is correct and we made adjustments in the 

final rule in response to some of those comments we got. 

Mr. TONKO. OK. Was this methane regulation based on cost effectiveness and availability of technology? 

Ms. MCCABE. That’s correct. 

Mr. TONKO. Well, it sounds like the levels set in this regulation 

are achievable. The total climate benefit for this rule or the benefits for this rule are estimated at I’m told $690 million. Is that correct? 

Ms. MCCABE. That is correct. 

Mr. TONKO. And is this more than the estimated cost? Are the 

benefits—— 

Ms. MCCABE. From the proposal? 

Mr. TONKO. Yes. 

Ms. MCCABE. You know, I don’t remember off the top of my head 

but we can get that information for you. 

Mr. TONKO. OK. That would be helpful. On top of that, EPA did 

not factor in the health benefits from reductions in other pollutants, which can be difficult to quantify but can have serious health 

consequences, particularly for vulnerable populations such as children and the elderly. Can you explain the public health benefits of 

this new regulation? 

Ms. MCCABE. Yes, sir. So in addition to the methane reductions, 

which of course are related to climate change, these facilities emit 

sort of the standard—some of the standard air pollutants that we 

worry about, those that contribute to ozone formation and fine parVerDate Mar 15 2010 13:52 Dec 13, 2016 Jkt 037690 PO 00000 Frm 00028 Fmt 6633 Sfmt 6633 F:\114THCONGRESS\114X156EPAREGSENERGYASKOK121316\114X156EPAREGSENE
25 

ticles. They also emit toxic emissions and, as you know, some of 

those are very difficult to quantify the benefits because the research doesn’t exist. But these are chemicals that are known to 

have adverse impacts on public health. 

Mr. TONKO. And show themselves in what sort of health impact? 

Ms. MCCABE. Some of them could be carcinogenic. Some of them 

could affect the respiratory system, the cardiovascular system, 

those sorts of impacts. 

Mr. TONKO. OK. I’ve exhausted my time. But with that, I thank 

you and yield back, Mr. Chair. 

Mr. WHITFIELD. The gentleman yields back. 

At this time I will recognize the gentleman from Ohio, Mr. Latta, 

for 5 minutes. 

Mr. LATTA. Well, thanks, Mr. Chairman and Acting Assistant 

Administrator. Thanks for being with us again. Really great to 

have you here again and hear the questions being asked, at the 

end of the day. 

Let me ask my first question. Under the current statutory framework is it the State environmental regulators or the States’ energy 

regulators who are supposed to plan the amount of renewables, 

natural gas, coal and other resources for a State’s electricity sector? 

Ms. MCCABE. The choices about energy policy would be made 

by—generally, I imagine by energy agencies, although every State 

is set up somewhat differently. 

Mr. LATTA. OK. When you say that they might be set up differently because wouldn’t the expertise lie with the State energy 

regulators and not the State environmental regulators? Is that correct? 

Ms. MCCABE. I wouldn’t disagree with that. I just—my point is 

that some agents—some States have energy and environment together and some have them separately. 

Mr. LATTA. OK. Let me ask this. How is that the Clean Power 

Plan is not usurping the authority and expertise of State energy 

regulators and transferring decision making to the environment 

regulators? 

Ms. MCCABE. Because the Clean Power Plan is all about carbon 

emissions, which is an air pollutant as identified by the U.S. Supreme Court, and the rule sets standards for emissions of air pollution. It leaves the choices of how to achieve those reduction up to 

the States to plan and achieve. 

Mr. LATTA. Well, where does the EPA derive its knowledge and 

expertise about how electricity is planned, operated and paid for? 

Ms. MCCABE. We consult regularly with the energy agencies and 

the energy expertise across the Federal Government. We also have 

long relationships with the regional transmission organizations, 

with State energy regulators as well as environmental regulators. 

Mr. LATTA. OK. But again, when we’re talking about being paid 

for, who ultimately pays for this? Who pays for this? 

Ms. MCCABE. I’m sorry. Who pays for what? 

Mr. LATTA. Who pays for it? OK. When you are talking about 

when you are—on the expertise and how electricity is planned, operated and paid for. But when electricity is generated who is paying for it? Because when you put more regulations out there and 

increase the cost because, you know, going back to the gentleman 

26 

from Illinois and the gentleman from Texas and their examples— 

let me give you another one. 

In Ohio, the electric co-ops have built a plant on the Ohio River 

and the—you know, the question for them then is what happens 

to their electricity rates and the competitiveness through the plant 

if all of a sudden the costs are being driven up by more regulations 

of which I know that Mr. Barton had pointed out the number of 

pages that are out there. 

Who’s going to pay that? Who’s the ultimate—who is going to be 

the ultimate one that has to pay for this? 

Ms. MCCABE. Well, Congressman, of course, the consumer pays 

the bill. I think it really is important to note what Mr. Tonko said, 

which is that EPA regulations are not at all the only thing that’s 

affecting the energy system in this country and that is a very important point, and it gets lost. 

Mr. LATTA. And I think it also takes in effect—if you look at the 

number of manufacturing jobs members have in their district, and 

I have about 60,000 and I also have the largest farm income producing district in the State. 

So we have a lot of folks out there needing a lot of electricity, 

and when you put the two together and also hearing from my folks 

because if you go back—you know, when you talk about you’re looking at statistics and things like that I’ve been told and it’s been reported that if we had the exact same effect that we had in January 

of 2014, which was one of the coldest winters on record in the State 

of Ohio, we did not go into brownouts or blackouts because we had 

enough existing power out there that if we had the exact same conditions today we would have those conditions of blackouts and 

brownouts because we have plants closing. 

So I think, you know, one of the concerns out there is when 

you’re talking about who’s paying for this it’s going to be the consumer. But it’s also the plants out there because they can’t keep 

up with the regs. 

Let me move on. In the Clean Power Plan, for existing electricgenerating units, EPA contends Section 111(d) of the Clean Air Act 

authorizes the Agency to force generation shifting away from fossil 

fuels to renewable energy and efficiency programs. 

If EPA can force restructuring of the electricity sector, can it also 

force the restructuring of other sectors? 

Ms. MCCABE. Well, I take issue with your use of the word force. 

The Clean Power Plan doesn’t force anything. It follows the—what 

the industry is doing. The utility industry and electricity supply is 

very different in the way it operates from any other industry. 

Mr. LATTA. Well, let me ask this. Are any of these 70 source categories currently regulated under the Section 111 of the Clean Air 

Act exempt from this type of restructuring? 

Ms. MCCABE. I just can’t accept the premise of your question, 

Congressman. 

Mr. LATTA. But you are saying that you can’t accept the premise 

but are—but are any of the 70 source categories currently regulated under this section of the Clean Air Act, which is 111 of the 

Clean Air Act, exempt from this type of restructuring? So you’re 

saying that you can’t accept the question? 

27 

Ms. MCCABE. Well, I don’t agree that we are restructuring the 

energy system through our rule. I also want to draw a distinction 

between the way the energy system works, which is a—based on 

a regional interstate grid, very different from other types of industries. 

So the question doesn’t really make sense. 

Mr. LATTA. Well, you know, if I could, Mr. Chairman, I’d like to 

maybe submit the remainder of my questions to the EPA for—because my time has expired. 

Mr. WHITFIELD. Yes. OK. The gentleman’s time has expired and 

you may submit for the record. 

At this time I’d like to recognize the gentlelady from Florida, Ms. 

Castor, for 5 minutes. 

Ms. CASTOR. Well, thank you very much, Mr. Chairman, for calling this hearing to review the benefits of our Environmental Protection Agency, especially to our health and to our economy and 

with the focus on the Clean Air Act. 

For those of you in the audience that really like to get into the 

numbers of looking at the costs and benefits relating to rules—our 

important bedrock environmental rules, the Congress requires 

under the Regulatory Right to Know Act that the Office of Management and Budget submit to us a report and one was just filed in 

March and it—what if finds is that EPA’s major rules promulgated 

between 2004 and 2014 yielded more benefits than major rules promulgated by other agencies over the same period. 

In the aggregate, the major rules promulgated by EPA have benefits between $160 billion and $788 billion compared to costs of just 

$38 billion to $45 billion. Rules promulgated by the EPA in fiscal 

year 2014 alone have resulted in an estimated $13 billion worth of 

benefits, far exceeding the $1 billion in costs—in estimated cost 

and by 2020 the benefits—the economic benefit of reducing air pollution is estimated at almost $2 trillion, exceeding costs by 30 to 

1. 

They go into much greater detail. So for those of you that like 

to really dig in to what criteria they look at I encourage you to do 

that. 

You know, it’s very difficult for the Congress and the public 

sometimes to focus on impacts over decades of time. We’re always 

focused on the here and now. But I’ll tell you coming—watching the 

looming cost that we are going to suffer if we do not address climate change in a very aggressive it’s really stark and already in 

the State of Florida we have local governments having and taxpayers—local taxpayers having to pony up multimillion dollars to 

adapt. In Miami, they’re already spending $500 million, $600 million because even on sunny days at high tide the streets are flooded and 

they’re having now to repair water systems and wastewater systems already. 

And here are some of the other costs that really aren’t discussed. 

We hear a lot of about cost to the industrial sector. But let’s talk 

about our neighbors back home. What they predict are rising costs 

in property insurance from extreme weather events, flood insurance—the Congress has grappled with flood insurance—the rising 

cost of flood insurance. 

28 

One global reinsurance giant predicts that extreme weather 

events are going to leave taxpayers on the hook for billions and billions of dollars in future years. Florida depends on tourism. 

We’re going to have to renourish our beaches. That’s a very significant cost. And the Congress is called upon time and time again 

to respond to emergencies, extreme weather events. So let’s not 

lose sight of the true cost to taxpayers and our neighbors back 

home, our small businesses from mom and pop shops to all sorts 

of businesses. That has to be factored in. 

So Administrator McCabe, I was glad to hear in your testimony 

that even though the Clean Power Plan is in—on kind of a regulatory hold for now that many States have been moving forward 

voluntarily. Can you give us a quick snapshot of what’s being done 

voluntarily even though we’re kind of in a temporary holding pattern? 

Ms. MCCABE. Uh-huh. Yes, absolutely. A number of the States 

that are moving forward are States that have been looking at these 

issues for a number of years. 

They are looking at reasonable restrictions on carbon emissions 

from their utility systems or even more broadly across their economies. They’re looking at ways to integrate their energy planning, 

their increased investment in wind and solar, in energy efficiency 

and planning those in for a carbon—a freer carbon future. 

Ms. CASTOR. And do I understand that many States in partnership with their electric utilities are already close to meeting the 

goals laid out in the Clean Power Plan? 

Ms. MCCABE. I believe that that’s generally correct. Of course, 

the goals are—in the Clean Power Plan are many years out into 

the future. But yes, there are States and utilities that are well on 

their way, that utilities are increasingly investing and relying on 

wind and solar as a significant portion of their portfolio. 

Ms. CASTOR. And those are job creators. I know EPA doesn’t really look at that side of the equation but one recent report predicts 

that due to the Clean Power Plan and just the significant shift towards renewables that we can anticipate 1 million new jobs in 

clean energy by 2030. 

So there is a lot that goes into this cost benefit equation. But I 

think it’s plain as day that we have got to act now aggressively to 

address the looming costs of the change in climate. 

Thank you, and I yield back. 

Mr. WHITFIELD. At this time, the Chair recognizes the gentleman 

from West Virginia, Mr. McKinley, for 5 minutes. 

Mr. MCKINLEY. Thank you, Mr. Chairman, and thank you, Ms. 

McCabe, for coming again to this. It just seems like you were here 

not too long ago. 

But let me go back over a little bit to restate that it’s my understanding that this hearing was to examine the effects of major regulations on the energy and the industrial sectors. Is that your understanding of the purpose of this hearing? 

Ms. MCCABE. I believe so, yes. 

Mr. MCKINLEY. OK. Thank you. Now, so I go to that is that these 

effects of these regulations and there was a report that Lisa Jackson used when she came here back 6 years ago. Used to wave this 

report in front of us that was written by Morgenstern back in 1999 

29 

and it was primarily intended to demonstrate that she believed 

that more regulations actually helped the economy. 

As a matter of fact, she said that from this report that one and 

a half jobs are created for every million dollars spent in meeting 

those regulations. Do you remember that report? 

Ms. MCCABE. Not specifically. 

Mr. MCKINLEY. OK. She used to wave this quite often, as often 

as you came or come, she used to come and she used to use this 

all the time. This justifies why we have so many regulations. 

So I’m just curious about that because, to me, it appears from 

looking at the kind of three points of some of the things these 

major regulations—there’s one about that using this about the jobs 

impact. 

I think we’re picking winners and losers because I don’t see one 

and a half jobs being created for the hundreds of billions of dollars 

that have been spent. 

It appears more we’re picking winners and losers because in the 

coal fields across this country they are struggling with it. I know 

that there have been over 40,000 coal jobs lost—direct coal jobs— 

let alone the 300,000 secondary jobs that are affected with it. 

So I’m struggling with the premise. So you can’t tell me whether 

or not you agree with this report any longer? 

Ms. MCCABE. I am not here to speak about that report, Congressman, nor am I here to speak about—— 

Mr. MCKINLEY. OK. 

Ms. MCCABE [continuing]. How much you would value any particular regulation. 

Mr. MCKINLEY. Well, I just want—in terms of the economy, what 

it’s doing to the economy is these regulations, what have happened 

with it because I think there was an initial premise this was going 

to save jobs or create jobs. I don’t think it did. 

Then we went—then we went to the environmental—you pivoted 

to the environment and temperature and we talked about temperatures were going to be under control if we pass some of these rules 

and regs affecting the coal and the gas industry. 

But yet even under the Clean Power Plan the EPA is accepting 

that it only is going to reduce the temperature or lessen it by 15 

thousandths of a degree by the year 2100. I struggle with that. 

So it doesn’t surprise me at all that now the EPA is pivoting 

from the fact that jobs weren’t created that there’s no temperature 

increase. So now they’re—just in March, Gina McCarthy was before 

us and she testified that she said that it’s not about the environment, it’s not about the health and safety for the people that we’ve 

been passing this. 

She said it’s about global leadership and I think wow, that was— 

that was a jaw-dropping revelation that she came out—this is not 

about the environment is why we’re passing these—despite what 

you just said to Joe Barton that’s not what this whole idea was 

about. 

So I’m struggling with it because we’ve got a chart that shows 

yes, we may be doing it, adhering to it in America but the rest of 

the world is not following our global leadership that was being promoted. 

30 

The rest of the world is continuing to use coal and create more 

fossil fuel and CO2 emissions in the atmosphere with this. Germany is building 26. India is going to double its production with 

it. 

So, to me, it comes across more as just an effort to have bigger, 

broader, stronger, more intrusive Government as compared to really helping people and their economy. 

So we have seen it in the ag community what the EPA is affecting, that that part of our sector of our economy, when they went 

after the waters of the United States they went after the farm dust 

rule, if you remember, for a while. 

But then they backed off. Did they back—did you all back off because you got push back? Because the science—you were saying 

how it was supposed to be good for your health. But once it was 

promoted on the farm dust you backed off. 

Ms. MCCABE. Congressman, respectfully, I have to disagree with 

the way you’re characterizing various prior statements of the Administrator and others in EPA just on a whole range of issues. 

Mr. MCKINLEY. I’m just going from testimony that they gave. I’m 

not characterizing. Then you came out with a water quality standard that you didn’t even give the States a chance to have a comment period. 

You came out with a water advisory that is 70 times more stringent than it is in Europe, 20 times more than numbers of States. 

Communities that are struggling in rural America to try to meet 

the water quality are going to spend millions and billions of dollars 

across this country to meet a standard that is questionable as to 

whether or not it’s going to have an effect with it. 

So I’m going to go back in the remaining time—maybe I’ve lost 

my time—what’s the answer, back to Joe Barton, when we talk to 

a coal miner that lost his job? It’s OK because the environment is 

better? Is that what you want to tell him? 

Ms. MCCABE. No. No, sir. Not at all. But I think it’s important 

to recognize that there’s lots of things going on in the energy system and coal is not as competitive as it was because of natural gas 

and other things going on in the industry. 

Mr. MCKINLEY. But States with natural gas are also into recession. I’m sorry I’m going over my time. 

Mr. WHITFIELD. Yes, the gentleman’s time has expired. 

Mr. MCKINLEY. But we’ve gone over to Louisiana, New Mexico, 

Oklahoma, Illinois, Wisconsin—they are all struggling with this 

thing, and they are not coal-producing States. 

Mr. WHITFIELD. At this time I would like to recognize the gentleman from Iowa, Mr. Loebsack, for 5 minutes. 

Mr. LOEBSACK. Thank you, Mr. Chair. Good to see you, Madam 

Administrator. It’s always good to have you here. 

We’re talking about a lot of very important issues here and actually in some ways I can identify with some of the things that were 

just said, being from Iowa. We have a lot of issues having to do 

with water, a lot of different things. 

I am confident that we can fight our way through a lot of those 

issues. We’re going to have to go to the State level, at the local 

level, at the Federal level. 

31 

I think we’re going to have to get all the stakeholders together 

eventually and we’re going to have to work through this. It’s not 

going to be easy, there’s no question about that, especially on the 

water issue. 

But I do want to speak to two different issues, if I may. As you 

might imagine, I want to talk to you about ethanol a little bit. I 

want to talk to you about wind a little bit, two things that are very 

important for the State of Iowa, two issues, I think, where we have 

made tremendous progress over the years as well. 

When it comes to ethanol and the RFS, the renewable volume obligations—the RVOs—we know because the Department of Energy 

has stated that using ethanol as a vehicle fuel has measurable 

greenhouse gas emissions benefits compared with using gasoline. 

CO2 released when ethanol is used in vehicles is offset by CO2

captured when crops that we use for the ethanol are grown. 

Given the role that renewable fuels play in cutting down greenhouse gases, and I realize it’s not universally accepted but I believe 

that that is in fact the case, shouldn’t the recent RFS or RVOs— 

the renewable volume obligations—for 2017 be increased to achieve 

this goal? 

Why are they at the level that they’re at, given that the EPA 

itself has said that this is good for our environment? 

Ms. MCCABE. Yes. Yes, sir. Well, you’re exactly right. That is 

why Congress passed the renewable fuel standard, one of the reasons. Also the other was energy security and we have found that 

there have been increases in a whole range of renewable fuels including ethanol that are good for climate change. 

In our proposal we actually did propose an increase from the 

prior year in the amount of renewable fuel that would be expected 

to be used in the transportation system and each year as we’ve 

done that RVO those numbers have grown. 

We have—our job is to set those expectations and we have done 

that after a careful review of what the system is able to accommodate in order for those fuels to be used. Congress didn’t just want 

them to be produced and sit somewhere. They wanted them to be 

actually used in the system and replace the petroleum fuels. 

Mr. LOEBSACK. Do you agree that if we have infrastructure improvements, especially for E15, that that would help us move along 

a little bit more quickly in terms of trying to get to the goal that 

we’re supposed to get to? 

Ms. MCCABE. I do think so and I think that that infrastructure 

is growing. It’s just taking a little bit longer than everybody 

thought it would. 

Mr. LOEBSACK. Right, and I won’t get too much in detail about 

the methodology used by the EPA but that’s always a big concern, 

obviously, that a lot of us have in these States that produce ethanol 

and biodiesel for that matter too. It’s not just an ethanol issue, as 

you know. 

So I just want to make sure that we stay on top of this because 

we can in fact accommodate, I think, more production of ethanol 

and biodiesel. We’ve just go to—in particular we’ve got to deal with 

the infrastructure issue, I think, going forward. 

You know, too, that Iowa is—I know that Congressman Green 

talked about Texas being a wind producer. In Iowa, you know, 

32 

we’re well over 30 percent of our electricity now is accounted for 

by wind energy, as you know. 

The concern that a lot of us in Iowa has is the Clean Power Plan, 

which as you know says that we’ve got to achieve a 32 percent reduction in carbon pollution. 

But the start date for all of that is January of 2013 and a lot 

of States like Iowa, at least some States and Iowa in particular, 

achieved a tremendous amount of progress prior to that date. And 

I mentioned this to Administrator McCarthy as well, kind of gone 

round and round about this—you know, 32 percent. 

The Clean Power Plan, I think, makes a lot of sense moving forward. It’s going to be more difficult for some States than others. 

But Iowa has already made tremendous progress and we’re not getting an credit for the progress that we made in the past by starting 

that date at 2013. 

Is there any possibility for flexibility for States like Iowa to get 

credit for what we’ve already done? 

I think it’s unfair in some ways to start at that particular date 

and not take into account what States like Iowa have already done, 

especially on wind production. 

Ms. MCCABE. Yes. Well, I think this question really reflects this 

debate that folks have been having this morning about what is our 

role under 111(d). 

It is not an energy policy rule. It is technology rule and for any 

technology rule we do under Clean Air Act we have to pick a starting point. And you’re always going to have people on one side or 

the other that wishes the starting date were a different time. We 

picked ours because of the information that we had from sources 

out of that date. 

It is still the case, however, Congressman, that States like Iowa 

that have been aggressive and are continuing to be aggressive in 

renewable energy are charting themselves a path to meet the 

Clean Power Plan and especially if States choose to get into a relationship with one another, in trading relationships, that can provide great advantages to a State that is really on the leading edge 

of developing those resources. 

Mr. LOEBSACK. I would just encourage more flexibility moving 

forward on this issue. Thank you, Madam Administrator. Thank 

you, Mr. Chair. 

Mr. WHITFIELD. At this time the Chair recognizes the gentleman 

from Virginia, Mr. Griffith, for 5 minutes. 

Mr. GRIFFITH. Thank you, Mr. Chairman, and Madam Administrator. I’m going to read to you from Section 321 of the Clean Air 

Act. This provides, quote, ‘‘the Administrator shall conduct continuing evaluations of potential loss for shifts of employment which 

may result from the administration or enforcement of the provisions of the Clean Air Act and applicable implementation plans including where appropriate investigating threatened plant closures 

or reductions in employment allegedly resulting from such administration or enforcement.’’ 

Yes or no, does the EPA—I would submit the EPA does not conduct these continuing evaluations. Isn’t that correct? 

Ms. MCCABE. Sir, whenever we do a regulation we look at those 

very characteristics in great detail. 

33 

Mr. GRIFFITH. You look at those characteristics when you propose 

a new regulation but you do not conduct continuing evaluations of 

potential loss through shifts of employment and then investigate 

threatened plant closures or reductions in employment allegedly resulting from the administration or enforcement of those regulations. Isn’t that true? Yes or no. 

Ms. MCCABE. There have been a variety of efforts over the years, 

but you’re reflecting that there is a difference of opinion about our 

obligations under that study. 

Mr. GRIFFITH. Well, there certainly isn’t a difference of opinion 

with ‘‘shall,’’ is there? ‘‘Shall’’ means you shall do it, does it not? 

There’s no wiggle room, is there? 

Ms. MCCABE. It does say ‘‘shall,’’ but it reflects a set of activities 

that—— 

Mr. GRIFFITH. All right. 

Ms. MCCABE [continuing]. People could disagree on exactly what 

those were. 

Mr. GRIFFITH. I don’t know how you disagree on that, ma’am. 

But we’ll just leave that as it is. Despite that plain language, I understand that in 2009 in response to a letter from Mr. Barton and 

Mr. Walden, the EPA said it has not interpreted the CAA Section 

321 to require the EPA to conduct employment investigations and 

taking regulatory actions. Can I interpret your prior answers to 

mean that it’s still the position of the EPA? 

Ms. MCCABE. I wasn’t involved in the writing of that letter, Congressman. But I’d be happy to provide further information on it. 

Mr. GRIFFITH. All right. I will follow up with that. 

According to the American Coalition for Clean Coal Electricity by 

the end of 2016 it is estimated that almost 51 megawatts of coalfired generation will retire or convert because of EPA policies. 

And I know the EPA was asked to conduct an investigation pursuant to 321 of the Clean Air Act with respect to any of these plant 

retirements. But that has not happened, has it? 

Ms. MCCABE. As I said, each time we do a rule we look—that affects the power industry we do a forecast to get a sense of what 

the impact on the industry may be. 

Mr. GRIFFITH. But when Murray Energy asked you all to do this 

and filed suit on that, you asked that it be dismissed and claimed 

that the energy corporation did not have standing to ask you to do 

that nor had they been harmed by the Clean Air Act. Have you 

looked into the situation at all? 

Ms. MCCABE. Sir, I really don’t want to speak to ongoing litigation, which you understand is very active. 

Mr. GRIFFITH. I understand that. But I will tell you, here is the 

concern I have. My district has lost thousands of jobs. I don’t have 

any Murray Energy plants or coal-generating plants or coal-production plants in my district. 

But it does concern me when they send out last week a notice 

that they are going to lay off another 4,400 employees. According 

to an article in the Wall Street Journal, a year ago they had 8,400 

employees. 

Now they have 5,356 and they are laying off 80 percent of those, 

or at least they have sent out the warning notices required by law. 

34 

But they may lay off 80 percent of those. While it is true that 

natural gas prices are low, it is also true that regulations have 

killed the coal industry in many, many ways and it doesn’t seem 

that you all are following through on your Section 321 requirement 

that your constantly continuing evaluations of potential loss or 

shifts in employment and then when there are losses, and Mr. 

Murray has made it very clear there are losses coming. And if you 

don’t want to do that one because there’s litigation look at Alpha 

Natural Resources. 

I don’t think they’re suing you right now. But they are in bankruptcy court and they do have a lot of—or had a lot of employees 

in my district. There are still some but not as many as there were. 

You have a requirement to follow up on this. I don’t believe 

you’re doing it. Your answers here today indicate to me you’re not 

doing it. The industry is in trouble. 

I will also tell you what’s interesting is you talked about methane being a whole lot worse than carbon dioxide. Right now they 

are proposing in my region two or three new giant gas pipelines. 

Now, I am not against the gas industry. But you have indicated 

there is a lot of leakage when they’re both getting the natural gas 

out of the ground, which we have some in the district, and then 

when they are piping it across the country. 

But your policies on coal have pushed people to natural gas even 

before the coal-fired power plants have used up their useful life 

and I think that’s a shame because I think you all have been penny 

wise and pound foolish and you certainly have not considered the 

fact that thousands, tens of thousands, of people in the coal industry and those industries that supply the coal industry have lost 

their jobs and you all as a group have not done your job under Section 321 of the Clean Air Act. 

I yield back. 

Mr. WHITFIELD. Gentleman’s time has expired. The gentleman 

from Illinois is recognized for 5 minutes. Mr. Kinzinger. 

Mr. KINZINGER. Thank you, Mr. Chairman, and Acting Assistant 

Administrator, thank you for being here, and thanks for your service to your country. 

I echo the concerns of many of my colleagues about the sheer 

number of regulations that have come out of the EPA recently. But 

I’m more concerned about how our economy and the small businesses and manufacturers are supposed to handle all these regulations. 

I think many Americans are very concerned, rightly so, about the 

state of our economy and I share those concerns, especially in light 

of the cost of so many of the EPA’s regulations. 

I just have a few questions. In a recent report by the Competitive 

Enterprise Institute, they estimate the total compliance costs for 

EPA regulations to be about $386 billion in 2016. To put that in 

perspective, that’s 2.1 percent of our GDP. 

Do you think that the $386 billion estimate is in the ballpark 

and if you don’t what is your best estimate of compliance costs? 

Ms. MCCABE. I really couldn’t speak to that number. People do 

various studies. They base their studies on various assumptions 

that may or may not be what’s actually borne out by the rule. So 

I really couldn’t speak to that. 

35 

What I can say is that we do an evaluation for each one of our 

rules of the expected costs and the expected benefits associated 

with it. 

Mr. KINZINGER. Would you agree that when a manufacturer faces a new compliance cost—let’s say it’s not $386 billion if you don’t 

think so, or whatever the number is, there’s a number—do you 

think they have to commit resources to comply with those rules? 

If a manufacturer has to comply with your rules do they have to 

commit some of their own resources to do it? 

Ms. MCCABE. Sure. There would be expectations that they would 

invest in control equipment or other approaches to reduce emissions. 

Mr. KINZINGER. So if a manufacturer has to devote resources to 

comply with new EPA rules they have fewer resources available to 

produce or expand production of goods and services unless they increase prices? 

Ms. MCCABE. Well, I don’t know that it’s as simple as that, and 

our rules always look at what kinds of approaches are cost effective 

and the impact that they would have, and in fact many industries 

have grown over the years with making investments in cleaner 

technology. 

Mr. KINZINGER. How does the EPA examine the impact of higher 

prices for goods and services? So, I mean, obviously we can go back 

and forth on, you know, whether it’s good, bad, indifferent. 

But we admit and we understand that there is some level of resources that a manufacturer will have to commit, which is less invested in expanding or promoting goods. 

How does the EPA examine the impact of higher prices for goods 

and services or less expansion throughout the whole economy as a 

result? Do you guys take that into account? 

Ms. MCCABE. So we follow OMB directives and methodologies in 

looking at our economic evaluations. Not everything has tools available to look at the impacts and so we work with OMB and others 

to continually develop better tools for that. 

Mr. KINZINGER. Mullin, you have to sit back. 

Ms. MCCABE. So that’s how we do it. Right now, there aren’t 

good tools that you could accurately do whole economy modeling 

such as you described. 

Mr. KINZINGER. So you’re saying that there is not—basically, the 

second and third order of facts is not taken into account. So, you 

know, basically cost of—if the manufacturer has to invest what 

they are not going to grow by that’s not taken into account by those 

models? 

Ms. MCCABE. Or how much they are going to grow and be able 

invest more because it’s been—it’s good for their business. 

Mr. KINZINGER. And for the EPA rule setting carbon dioxide 

standards in the new coal plants did the EPA consult with equipment vendors or contractors to determine if a plant could be built 

with carbon capture and storage technology to meet new standards? 

Ms. MCCABE. We certainly consult with a whole variety of people 

in the industry. 

Mr. KINZINGER. And can you identify any of the vendors that 

made those assurances and if not, why not? 

36 

Ms. MCCABE. I’d be happy to get back with you—to you with 

more details on who we spoke to. 

Mr. KINZINGER. OK. But you will be able to do that then? We 

will count on that response. 

Ms. MCCABE. Sure. 

Mr. KINZINGER. OK. And for the existing coal plant rule, EPA set 

emission standards that are impossible to achieve at units themselves and will require beyond the fence actions. Is there any coalfired electric generating unit in the world that can meet carbon dioxide emissions rate that the Agency has set for existing power 

plants? 

Ms. MCCABE. Through its own—the coal emissions? 

Mr. KINZINGER. Yes. 

Ms. MCCABE. Themselves? No, I don’t believe so. But there are 

technologies and techniques that they can use in order to reduce 

their emissions. 

Mr. KINZINGER. And these would be the beyond the fence actions? 

Ms. MCCABE. Well, CCS would be one way that a coal plant— 

fuel mixing is another way that they could reduce their emissions. 

Mr. KINZINGER. So the next question and my last one, is there 

any control equipment or work practice that exists today that 

would allow an existing coal-fired unit to meet the standard? You 

think—you say there is. 

Ms. MCCABE. Yes. 

Mr. KINZINGER. OK. All right. Well, it will be interesting. 

With that, I yield back. Thank you. 

Mr. WHITFIELD. At this time I will recognize the gentleman from 

Ohio, Mr. Johnson, for 5 minutes. 

Mr. JOHNSON. Thank you, Mr. Chairman, and Ms. McCabe, 

thanks for joining us today. You know, the Congressional Budget 

Office has stated that if we increase the costs of energy it increases 

the cost of goods and services, costs which fall disproportionately 

on low-income households like those that I represent in eastern 

and southeastern Ohio. 

You previously testified that the Agency did not assess the full 

economy wide impacts of the Clean Power Plan. So is EPA currently using economy wide modeling to estimate the full economy 

impacts of its rules? 

Ms. MCCABE. We don’t have tools available to do that kind of 

analysis. 

Mr. JOHNSON. But the law requires you to do that kind of analysis, doesn’t it? 

Ms. MCCABE. Whole economy modeling? I don’t believe so, sir. 

The law requires—— 

Mr. JOHNSON. Aren’t you—aren’t you supposed to consider the 

economic impacts of the—of the rules that you put out? I think 

that’s what I heard just a little bit ago. 

Ms. MCCABE. In accordance with the methodologies that the Office of Management and Budget sets forth and we follow those procedures and—— 

Mr. JOHNSON. But I thought I understood just a little bit ago 

that you’re not following those procedures either. 

Ms. MCCABE. No, we are. 

37 

Mr. JOHNSON. OK. Don’t you think that the EPA should consider 

those full economy impacts? 

Ms. MCCABE. I think these are very, very complicated issues. 

Mr. JOHNSON. Oh, yes. They are complicated. The rules are complicated. The regulations that you guys are putting out are complicated. It’s draining the life blood out of our—out of our businesses. 

Between the Clean Power Plan, the Waters of the U.S. and others that you folks have gotten, you just heard from my colleague, 

Mr. Kinzinger from Illinois, the hundreds of billions of dollars that 

you guys are sucking out of our economy every year that could be 

going toward job creation. 

You know, the money that is coming out in Federal regulations, 

particularly from the EPA, is like a—is like a dadgum permission 

slip to do business in America. Doesn’t produce a product, doesn’t 

pay a salary. It doesn’t go to any company’s bottom line. It’s like 

going to the movie theater and buying a ticket but you don’t get 

the popcorn or the diet Coke. 

You’ve got to pay extra to get that stuff and the projector doesn’t 

work. It’s a ripoff of the American people, and the Federal courts 

have shown and have demonstrated through their rulings that you 

guys are consistently overreaching. 

I think it’s absurd. I think it’s irresponsible. Quite honestly, Ms. 

McCabe, I think it’s un-American. You obviously don’t have a concern and your department doesn’t have a concern for the economic 

well-being of the very people that create jobs in this country. 

Let me ask you another question. Is it correct that the EPA will 

not engage the Clean Air Scientific Advisory Committee to consider 

adverse effects of implementing air quality standards? 

Ms. MCCABE. It’s not correct that we will not. We—— 

Mr. JOHNSON. Have you done so? 

Ms. MCCABE. We—— 

Mr. JOHNSON. Have you done so? Yes or no. 

Ms. MCCABE. Not in the context—— 

Mr. JOHNSON. OK. So you haven’t. So why not? Why not up until 

now? 

Ms. MCCABE. The Clean Air Science Advisory Committee has focused its attention on the standards, on the standard setting. 

Mr. JOHNSON. No, I’m asking you. I know what they do. I am 

asking you why you haven’t consulted with them—why you haven’t 

engaged with them. 

Ms. MCCABE. We engage with them all the time. 

Mr. JOHNSON. No. You just told me you didn’t engage with them, 

that you haven’t up until now. So first you say you didn’t, now you 

say you did. That’s the same kind of double talk that our businesses are getting across the country. Have you engaged with the 

CASAC? 

Ms. MCCABE. We have—— 

Mr. JOHNSON. Have you engaged with the CASAC—— 

Ms. MCCABE. I am trying to answer you, Congressman. 

Mr. JOHNSON. No, you are not. It is a yes or no question. Have 

you engaged with them? 

Ms. MCCABE. Yes, we have engaged with them. 

Mr. JOHNSON. Why did you just tell me that you haven’t? 

38 

Ms. MCCABE. Because—— 

Mr. JOHNSON. You said not up until now. 

Ms. MCCABE. Because you asked me about a specific topic. 

Mr. JOHNSON. No, I asked you is it correct that the EPA will not 

engage with the Clean Air Scientific Advisory Committee to consider the adverse effects of implementing air quality standards. 

You said it’s not true. I said, ‘‘Have you engaged with them?’’ You 

said not at this time. 

Ms. MCCABE. Not on that topic. 

Mr. JOHNSON. OK. Well, that’s what I am asking you about. 

Ms. MCCABE. All right. 

Mr. JOHNSON. That’s why I don’t let you ramble on because you 

try to deflect the answer to something that you want to talk about 

instead of what the American people are concerned about, why you 

are not doing your job and why you are not considering the implications of the rules that you’re putting out. 

Is it correct that the EPA does not believe it has to investigate 

jobs losses pursuant to Section 321 of the Clean Air Act? Do you 

think you’re supposed to do that? 

Ms. MCCABE. As I noted—— 

Mr. JOHNSON. Yes or no? Do you think you are supposed to do 

that? I got six seconds. Do you think you’re supposed to do that? 

Ms. MCCABE. This is a matter in litigation, Congressman. So—— 

Mr. JOHNSON. So due to a matter that is in litigation, you can’t 

answer whether or not you are supposed to do that? 

Ms. MCCABE. We believe that we are discharging our duties 

under the Clean Air Act. 

Mr. JOHNSON. Are you required to investigate jobs losses under 

Section 321? 

Ms. MCCABE. The statute speaks for itself and says what it says, 

and we’re —— 

Mr. JOHNSON. And you are not doing it. It’s absurd, Ms. McCabe. 

Mr. RUSH. Gentleman, order. 

Mr. WHITFIELD. Gentleman’s time has expired. At this time, I 

recognize the gentleman from New York, Mr. Engel, for 5 minutes. 

Mr. ENGEL. Thank you. Acting Assistant Administrator McCabe, 

thank you for joining us. I am a little taken aback by the hostility 

that I hear in this room. I just want you to know that there are 

many of us who approve of the work that the EPA does. 

Mr. JOHNSON. Point of personal privilege, Mr. Chairman. 

Mr. ENGEL. We want—we want—we want clean air. 

Mr. WHITFIELD. Would the gentleman suspend for just 1 minute? 

Mr. ENGEL. Yes. 

Mr. JOHNSON. You know, I find it absurd that we would be challenged on an air of hostility when we are doing what the American 

people require us and request us to do, which is to hold the EPA 

accountable. 

If we are not going to do it then who is going to do it? 

Mr. RUSH. Mr. Chairman—Mr. Chairman—Mr. Chairman—Mr. 

Chairman. 

Mr. JOHNSON. I have the floor. I have been recognized. 

Mr. ENGEL. You took my time. 

Mr. JOHNSON. Though I claim back my time. His time was over. 

39 

Mr. WHITFIELD. OK. Let’s hold it for just a minute. Obviously, 

climate change and regulations are something we all feel very 

strongly about, and I don’t think it’s correct to question anyone’s 

motives. 

And we all have very strong feelings about this. Mr. Johnson is 

speaking in defense of his constituents. Mr. Engel is expressing 

what he perceives as hostility. What would the gentleman like to 

say? 

Mr. RUSH. Mr. Chairman, my side has sat here very patiently 

and calmly while this witness, who by every indication has worked 

tirelessly on behalf of the American people—to be called un-American, that is absurd. 

Mr. WHITFIELD. Well, Mr. Rush—— 

Mr. RUSH. That is extreme and I said it to you when it was mentioned, if you don’t agree with the facts, then all of a sudden you 

are called un-American. 

Mr. Chairman, there is no place in this hearing for a witness, be 

it from the EPA or whatever governmental agency there is to be 

called an un-American. 

Mr. WHITFIELD. He said it was in his opinion un-American. He 

didn’t say she was un-American. And there are very strong feelings 

on this issue because many people, and we are speaking for our 

constituents, believe that EPA is exceeding its legal authority 

under the direction of a president who is trying to impose his will 

on climate change around the world. So there are strong feelings 

on the issue, there is no question. 

Mr. Engel, you are recognized. We will give you—you were about 

4 minutes when we interrupted you. 

Mr. ENGEL. I think it was more than 4, Mr. Chairman. I would 

like to have my 5 minutes. I really just—— 

Mr. WHITFIELD. Well, I would be happy to give you 5 minutes. 

Mr. ENGEL [continuing]. Say anything except welcome the witness and—— 

Mr. WHITFIELD. You are recognized for 5 minutes. 

Mr. ENGEL [continuing]. Let me say that I am not questioning 

anyone’s motives. Everybody has the right to express their mind. 

I just question the hostility that the questions are being asked. I 

think you can disagree with a witness. You can tear down whatever they have to say. But I am a big believer in you do it in a 

way that doesn’t call anyone un-American and that you don’t question anyone’s motives. 

I think that the Administrator is trying to do her job. We are trying to do our job, and I think that we can have differences of opinion and state the disagreements without being hostile. That’s all I 

wanted to say. 

I am a supporter of what you try to do with clean air and clean 

water. I believe the history of the Clean Air Act shows that the 

United States can reduce pollution while creating jobs and 

strengthening the economy, and your testimony and Ranking Member Rush’s opening statement set forth statistics on how EPA’s pollution reduction program saved lives and improved public health, 

particularly among children and senior citizens. 

40 

So I won’t repeat that here. I’ll get to my questions. I have about 

four of them, so if you could keep your answers brief I would appreciate it. 

Many of my colleagues criticize the compliance costs of EPA’s 

regulations. Please explain the opportunities that regulated entities 

and industries have to communicate concerns to regulators during 

the rulemaking process and please explain how those concerns are 

taken into account. 

Ms. MCCABE. Both before we start the rulemaking and certainly 

through formal comment periods we solicit people’s views on all of 

the information that we use to develop our rules including rules 

about cost. 

We are constantly looking for ways to adjust the rules to provide 

opportunities for people to comply with them in the most cost-effective way possible. 

Mr. ENGEL. Thank you. In your experience how often are major 

rules adopted where projected costs exceed projected benefits? 

Ms. MCCABE. Where costs exceed the benefits I am not aware of 

any that I’ve worked on where the costs exceeded the benefits. 

Mr. ENGEL. Thank you. The U.S. has become a world leader in 

pollution control technology supporting millions of jobs, generating 

hundreds of billions of dollars in revenues and tens of billions of 

dollars in exports every year. 

Has the Clean Air Act contributed to the development of that industry here in the United States? 

Ms. MCCABE. Yes, sir, it has through our automotive technologies as well as other pollution control technologies. It absolutely has. 

Mr. ENGEL. Thank you. The EPA and the National Highway 

Safety and Transportation Agency have proposed new vehicular 

fuel efficiency standards that establish average fleet one standards 

of 40.1 miles per gallon by model year 2021 and 49.6 MPGs by 

model year 2025. If possible, please discuss the cost benefit consideration associated with this proposal. 

Ms. MCCABE. So this proposal is great because it means American motorists are using less gas. That means they are pumping 

less. They are saving that money in their pockets and everybody 

appreciates that. 

Mr. ENGEL. Thank you. On August 8th of 2011, EPA finalized a 

cross-State air pollution rule and after a series of court challenges 

that delayed implementation I understand that the EPA now expects to update and finalize the rule by next month, August 2016. 

If possible, could you please discuss the cost benefit considerations 

associated with this rule making? 

Ms. MCCABE. Yes, sir. Absolutely. 

This is a rule that’s required for upwind States to reduce their 

emissions that contribute to ozone air quality problems downwind. 

We reviewed the variety of technologies that are available to 

electric utilities to reduce those emissions of NOx and found a 

number of extremely cost effective approaches—$1,500 per ton or 

less—that could be implemented very quickly including turning on 

pollution control technology that has been installed but is not being 

run at this time. 

41 

Mr. ENGEL. Thank you. On June 22nd, 2010, EPA finalized a 

rule which strengthens the primary sulfur dioxide NAAQS to a 

level of 75 parts per billion. Principal effects would be to require 

additional controls on fossil fuel-fired power plants. If possible, 

could you please discuss the cost benefit considerations associated 

with this rule making? 

Ms. MCCABE. So sulfur dioxide has very clear impacts on public 

health. So every time you reduce sulfur dioxide you are achieving 

benefits that can be monetized in terms of people’s public health. 

There are very well understood technologies, very cost effective 

technologies that are available for facilities to reduce their emissions of SO2 and I should note that those very same kinds of technologies are helpful in meeting other requirements. 

Mr. ENGEL. Well, again, thank you for your testimony and I appreciate the work you do and sorry that you weren’t treated very 

courteously. 

Ms. MCCABE. Thank you, sir. 

Mr. WHITFIELD. At this time, I recognize the gentleman from 

Oklahoma, Mr. Mullin, for 5 minutes. 

Mr. MULLIN. Thank you, Mr. Chairman. Thank you once again 

for being here. I don’t envy your position and unfortunately I have 

lost a tremendous amount of respect for the EPA and what their 

mission statement has turned into. 

From trying to protect our environment, which I’m a big advocate 

for—I am the fourth generation on my farm. We live in the same 

location that, literally, my family stopped walking because I’m 

Cherokee and when we came into Oklahoma, still live in the same 

area. Love it. 

And so we’re about protecting it. My kids will grow up on the 

same place. But the EPA has turned into more of an agenda-driven 

agency than actually doing its original mission statement as you 

stated earlier. 

And I just want to kind of rehash some things. I mean, you 

have—you have said that you believe that energy costs is going to 

be lower due to the EPA’s regulation. Is that correct? 

Ms. MCCABE. What I was referring to was our projections in the 

Clean Power Plan, that by the 2030 compliance year because of the 

investment in energy efficiency that we predicted that people’s bills 

would go down by about 7 percent. 

Mr. MULLIN. So out of those Clean Power Plans, there are several regulations specifically to the power plants and by fully implementing all of those out of 16 rules it’s going to cost the industry— 

now, this is where you are saying it’s going to lower costs to our 

consumers—by the time all of these 16 rules are fully implemented 

it’s going to cost the industry $28,912,000,000 a year annually to 

comply—annually. Now, who’s going to pay for that? 

Ms. MCCABE. Well, I’m not sure where your number comes from, 

Congressman, so—— 

Mr. MULLIN. This is from you guys. EPA’s estimate of compliance 

cost—EPA’s—these are yours—so this isn’t my number. This isn’t 

the majority’s number. These are your numbers. The 16 rules that 

you have towards power plants, $28,912,000,000 annually—your 

numbers—to comply. Now, where is the cost saving to the consumer? Who is going to pay for that? 

42 

Ms. MCCABE. This is a very large industry. The utility industry—— 

Mr. MULLIN. No, no, no, no. Who is going to pay the $28 billion? 

Let us just round it up to $29 billion because you guys usually underestimate because you want to try and make your numbers look 

good. So let’s say $29 billion annually. Who is going to pay for 

that? 

Ms. MCCABE. What I am trying to say, Congressman, is that consumers pay rates which are set through—— 

Mr. MULLIN. So what you’re saying is you expect the industry to 

absorb it? 

Ms. MCCABE. I am not saying any—I am not giving you any—— 

Mr. MULLIN. Well, now, you made the claim that the consumers’ 

cost was going to go down. 

Ms. MCCABE. Yes, sir. 

Mr. MULLIN. OK. How are you coming up with that claim if you 

can’t answer who is going to pay for the $29 billion that you guys 

estimate it is going to cost annually to comply with your regulations? 

Ms. MCCABE. This industry invests every year millions and millions of dollars—— 

Mr. MULLIN. This is—no, no, no. This has nothing to do with investment. This has to do with complying with your regulations. 

Ms. MCCABE. Respectfully, Congressman, it does have to do with 

investment. 

Mr. MULLIN. No. No, it doesn’t. This is to comply. 

Ms. MCCABE. Yes, and they’re—— 

Mr. MULLIN. There is a huge difference. I am a business owner. 

There is a cost to implement every regulation that comes in. That 

has to either be absorbed by the company, which can’t usually absorb it, or it’s got to be passed on to the consumer. 

Now, if you are going to sit here and tell me as a witness that 

it is going to lower the cost, you are telling the American people 

that it is going to lower the cost but your estimates—your estimates are saying it’s going to cost $29 billion annually for the industry to comply and your only answer is that it is going to be absorbed by the industry? You are making that assumption? 

Ms. MCCABE. The increased use of energy efficiency will mean 

that people are using less energy. 

Mr. MULLIN. Now, the last time you were here I went through 

energy efficiency that you guys were claiming and we didn’t show 

that. The cost of the compliance of the appliances had went up and 

greatly outpaced the cost of energy savings. So now you are saying 

that it’s going to save it because of energy savings. So you’re making an assumption—you are making a false claim then? 

Ms. MCCABE. I am not making a false claim. 

Mr. MULLIN. No, you are saying that it is going to save the consumer dollars. You are making that assumption—— 

Ms. MCCABE. I am—— 

Mr. MULLIN [continuing]. And so you are making a false claim 

because there is nothing to back that up. 

Ms. MCCABE. What there is to back that up is our regulatory impact analysis, which lays out all of this analysis—— 

43 

Mr. MULLIN. By your own costs it’s $29 billion a year. Who is 

going to pay for it? 

Ms. MCCABE. Sir, you need to look at the regulatory impact analysis that goes through—— 

Mr. MULLIN. No. What you need to do is understand the industry. I read your bio. You have never worked in the industry. You 

have worked against the industry from day one. 

Ms. MCCABE. That is absolutely not true, Congressman. 

Mr. WHITFIELD. The gentleman’s time has expired. 

Mr. RUSH. Mr. Chairman, a point of order. When are you going 

to stop the badgering of witnesses before this committee? And then 

I respect the prerogatives of every member of this committee— 

every Member of the House. I respect the witnesses. Mr. Chairman, 

if they’re asked a question, then they should have some reasonable 

amount of —— 

Mr. WHITFIELD. Well, I didn’t—it’s not my opinion that Mr.—— 

Mr. RUSH. Mr. Chairman, please don’t cut me off. At least I ask 

for some reasonable assurance that they are going to be able to answer the question that they are asked. Now, Mr. Chairman, this 

hearing is getting way out of hand and then you have to have some 

responsibility for it. 

Mr. WHITFIELD. This hearing is not out of hand. 

Mr. RUSH. Yes, the hearing is—— 

Mr. WHITFIELD. People have a right to ask the questions. 

Mr. RUSH. This witness has been badgered and badgered—— 

Mr. WHITFIELD. She has not been badgered. 

Mr. RUSH [continuing]. And badgered and badgered and badgered and badgered, Mr. Chairman. 

Mr. WHITFIELD. I respectfully disagree with you. 

At this time, I recognize the gentleman from Missouri, Mr. Long, 

for 5 minutes. 

Mr. LONG. Thank you, Mr. Chairman. I appreciate and I wish 

there was as much respect on the House floor for the activities 

there as what there are in this room and if you want to look at 

disrespectful look at last Thursday on the floor of the House—the 

representatives of the people’s House. 

Ms. McCabe, I am sure you’re aware in February of this year— 

I moved to the chair. I can see—it’s the only one I can’t see—get 

him out of here. 

But I’m sure you’re aware that in February of this year the Supreme Court issued a stay on the implementation of the Clean 

Power Plan. The EPA has stated it will continue to provide tools 

and support for States that seek the Agency’s guidance and just 

last month issued a proposed rule on design details for a program 

out of the Clean Power Plan. 

Why does EPA continue to issue implementation guidance on the 

Clean Power Plan in light of the Supreme Court’s stay and 

shouldn’t the EPA stop issuing guidance for the Clean Power Plan? 

Ms. MCCABE. Congressman, we are not implementing the Clean 

Power Plan, which is what the court stayed. No State is required 

to do anything under the Clean Power Plan. While that is—— 

Mr. LONG. But you’re issuing guidance on it or not? 

Ms. MCCABE. We are developing further tools in response to requests from States that are voluntarily choosing to go forward and 

44 

work on these issues and the Supreme Court did not stay all activity of the Agency. It did not stay activity of States that want to do 

something to address these important public health issues. 

Mr. LONG. Yes, but it issued a stay on the implementation of the 

Clean Power Plan, correct? 

Ms. MCCABE. Which we are—which we are not doing. 

Mr. LONG. So you are not issuing guidance on the Clean Power 

Plan? 

Ms. MCCABE. Developing tools is not implementing the Clean 

Power Plan, which is what was stayed. 

Mr. LONG. What is the EPA’s interpretation of the stay of the 

Clean Power Plan? 

Ms. MCCABE. Our interpretation is that we cannot require any 

State to take any activity that is required under the Clean Power 

Plan and we are not doing that. 

Mr. LONG. OK. Does EPA consider the cumulative impact of economically significant rules when proposing additional rules and if 

so what influence does this have on the EPA when proposing new 

rules or updates to current rules? 

Ms. MCCABE. Each time we do a rule we take into account all 

the rules that have gone before it and build that into our analysis 

of costs and benefits. 

Mr. LONG. OK. Since 2009, the EPA has published nearly 3,900 

final rules—the final answer. Roughly, how many of these rules 

have been considered economically significant, which means they 

have an annual effect on the economy of $100 million or more? 

Ms. MCCABE. I don’t know the answer to that question, Congressman. I would be happy to get it for you. 

Mr. LONG. I didn’t think you would but I was hoping you would 

be able to get it for me. So I—— 

Ms. MCCABE. Yes. Absolutely. We will gladly get it for you. 

Mr. LONG. Yes, I appreciate that. And under the Paris climate 

agreement the United States agreed to revisit its greenhouse gas 

goals in 5 years with the object of making them more stringent. 

Will this agreement lead the EPA to more proposed stringent 

standards for the power sector, you think? 

Ms. MCCABE. I really can’t speak to rules in the future, Congressman. But this is a global and challenging problem that people 

will continue to work on. 

Mr. LONG. Former climate chief—excuse me, a former chief climate counsel of an environmental group recently mentioned that 

there could be newer versions of the Clean Power Plan if the Supreme Court rules in favor of the plan. 

Is the EPA currently doing work on a more stringent version of 

the Clean Power Plan for power plants? 

Ms. MCCABE. No, we are not. 

Mr. LONG. Under Section 111, standards are to be reviewed 

every 8 years. Would more stringent standards be in fact a possibility? 

Ms. MCCABE. That every 8-year review applies to Section 111(b), 

which is the standards for new power plants. So just wanted to 

clarify that. 

But at this moment, we are not looking at any review of the 

111(b) and 111(d) standards. 

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Mr. LONG. OK. Well, I’d feel, you know, kind of left out if I didn’t 

get to raise my voice at least once today. So I want to thank you 

for being here and I yield back. 

Mr. WHITFIELD. The gentleman yields back and that concludes 

all the questions. So Ms. McCabe, thank you for being with us this 

morning. We look forward to continuing working with you on these 

issues. 

At this time, I would like to call up the second panel of witnesses, and on the second panel we have—I am actually just going 

to introduce the second panel as we call them for their testimony. 

So if the second panel would come forward and Ms. McCabe 

thank you again. Our actual first witness on the second panel will 

be Mr. Travis Kavulla, who is the president of the National Association of Regulatory Utility Commissioners and he’s the vice chairman of the Montana Public Service Commission. 

So we will recognize Mr. Kavulla for his 5-minute opening statement, and just make sure that the microphone is on and you see 

the lights on the table. When the 5 minutes is up, the red light will 

come on. 

So at that point, you can start summarizing. But we do appreciate all of you being with us this morning and, Mr. Kavulla, you 

are recognized for 5 minutes for an opening statement. 

STATEMENTS OF TRAVIS KAVULLA, PRESIDENT, NATIONAL 

ASSOCIATION OF REGULATORY UTILITY COMMISSIONERS, 

ON BEHALF OF THE NATIONAL ASSOCIATION OF REGULATORY COMMISSIONERS; DAVID PORTER, CHAIRMAN, 

RAILROAD COMMISSION OF TEXAS; LYNN D. HELMS, DIRECTOR, NORTH DAKOTA INDUSTRIAL COMMISSION, DEPARTMENT OF MINERAL RESOURCES; ROBERT WEISSMAN, PRESIDENT, PUBLIC CITIZEN; AND CHARLES D. McCONNELL, EXECUTIVE DIRECTOR, ENERGY AND ENVIRONMENT INITIATIVE, RICE UNIVERSITY 

STATEMENT OF TRAVIS KAVULLA 

Mr. KAVULLA. Thank you very much, Chairman Whitfield and 

Ranking Member Rush and members of the committee, for sitting 

through this hearing today and affording us your attention. 

I am speaking today on behalf of the National Association of Regulatory Utility Commissioners, a 127-year-old organization that 

represents the public utility commissions of the United States. 

I think it’s safe to say that when the rule was—the Clean Power 

Plan was published in the Federal Register October of last year it 

represented the EPA’s most far-reaching regulation of the electric 

power sector in the Agency’s history. 

NARUC’s members are divided on what should be done to address carbon dioxide and other greenhouse gases emissions. However, NARUC has advocated unambiguously that States’ traditional 

regulatory oversight over utility resource planning not be eroded 

and that low-carbon-emitting resources of all kind receive credit in 

the Clean Power Plan. 

In both respects, the EPA’s regulation falls short of these principles. Traditionally, air quality regulations identify the pollutant 

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nology which either maximally controls for its emissions or is the 

most cost effective in controlling the emission of a pollutant. 

Then the regulation will require the installation of that technology or require the facility that emits that pollutant to limit its 

emissions to the same—to the same level. 

In short, traditional environmental regulation revolves around 

installing specific pollution control technologies at the facility that 

produces the emissions and certainly in all previous rules issued 

under Section 111(d) a facility-specific technology has been at the 

core of the regulations emissions standard. 

And if you look back at the several regulations issued under 

111(d), these technologies are fairly modest in scope and limited in 

their applicability to certain industries—for instance, spray crossflow packed scrubbers for the phosphate fertilizer industry. 

When the EPA, however, decided to focus on electric power generation under Section 111(d), instead of focusing on the emitting facility as the—as the point of regulation, the EPA instead focused 

on what it called the complex machine that is the North American 

power system and it identified through a system of so-called building blocks a more comprehensive system to abate the emission of 

carbon dioxide. 

The EPA then set about creating State requirements that were 

not limited to reducing emissions from coal-fired generators based 

on facility upgrades but on the idea that if only natural gas-fired 

or renewable generation were more prevalent coal plants would dispatch less often, reducing their emissions. 

Together, the requirement-setting process leads to a more stringent emission standard for coal plants which is impossible to 

achieve at the specific plants using demonstrated technology. 

In short, to regulate existing power plants, the EPA is effectively 

requiring the construction of entirely new power plants. This novel 

approach means that EPA has interpreted the Clean Air Act to 

give that agency the power essentially to plan the resource mix of 

the U.S. power sector. 

Effectively, the EPA has created a de facto fuel and renewable 

energy standard. I am concerned about this because traditionally 

making determinations as to the economic, environmental and social efficiency of utilities’ investments to serve retail customers has 

been for nearly a century the province of State utility commissions. 

Regulated utilities that own generation file integrated resource 

plans that are subject to review by State utility commissions. 

These are intended to be processes that take a wide ranging look 

at customers’ needs, incorporating demand forecasting a wide consideration of available resources including energy efficiency and indeed environmental externalities. 

In my experience, State utility commissions possess and deploy 

substantial technical resources in analyzing these plans. 

But when the EPA adopted a system that encompassed the entirety of the State’s electric power production what it really did was 

to remove the IRP function of a utility commission and replace it 

with a carbon resource planning process undertaken by the State’s 

environmental regulator and the Governor’s office under Section 

111(d). 

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It may seem innocuous to transfer one regulator—an economic 

regulator like myself with an environmental regulator, but the 

functional transfer of authority is highly consequential for several 

reasons. It gives a less experienced regulator control over a resource planning process. It makes the resulting plan a matter of 

Federal environmental law enforceable under it sapping the ability 

of the industry and the regulator to respond nimbly to changing 

market conditions. 

The scope of the plan, rather than just for a single utility, now 

becomes the entire State’s electric resource mix with the likelihood 

that certain parties are favored over others and, finally, it introduces a new level of potentially self-seeking politics and to have a 

plan in process. 

Needless to say, Mr. Chairman, with the adoption of the Clean 

Power Plan by the EPA, it fundamentally alters how and by who 

utilities are regulated in the United States. 

Thank you. 

[The prepared statement of Mr. Kavulla follows:] 

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Mr. WHITFIELD. Thank you, Mr. Kavulla. 

Our next witness is Mr. David Porter, who is the chairman of the 

Railroad Commission of Texas and, Mr. Porter, thanks for being 

with us today, and you are recognized for 5 minutes. 

STATEMENT OF DAVID PORTER 

Mr. PORTER. Thank you, Chairman Whitfield, Ranking Member 

Rush and members of this committee. For the record, I am David 

Porter, chairman of the Railroad Commission of Texas. 

For those of you who are not familiar with the Railroad Commission, we are the State of Texas’ chief energy regulator. I am one 

of three statewide elected commissioners, and we oversee everything from oil and gas to pipelines, uranium exploration, surface 

coal mining, natural gas, local distribution companies and alternative natural gas fuels. 

The Railroad Commission has effectively regulated the oil and 

gas industry in the state of Texas since 1919. It is one of the oldest 

State agencies in the Nation and the most mature energy regulatory body in the world. 

Texas is the Nation’s largest producer of oil and natural gas, and 

the commission monitors approximately 433,000 oil and natural 

gas wells, more than 335,000 of which are actively producing. 

This energy production supports 2 million jobs in Texas and 

about a quarter of the State’s economy. The oil and gas industry 

significantly benefits Texas as well as the entire United States. 

The recent surge in drilling has considerable bolstered the national economy. The result in historical production increases have 

also paid the way for extraordinary geopolitical advantages. 

In recent years, the United States has been able to surpass 

Saudi Arabia and Russia as the leading producer of oil and natural 

gas liquids in the world. 

We have also seen a huge shift in the balance of trade because 

of the growing strength of our domestic energy industry. Domestic 

oil production has increased by 4.3 million barrels per day since 

2006 and correspondingly, because of that increase, the trade deficit has been decreased. 

As chairman of the Railroad Commission, it is my job to ensure 

fair and consistent energy regulation in Texas so businesses can 

safely, efficiently and economically produce the energy that powers 

our State and national economies. 

That said, I very much appreciate the opportunity to submit this 

testimony regarding recent rulemaking by the United States Environmental Protection Agency under the Clean Air Act. 

In my written testimony, I have detailed the Railroad Commission’s specific concerns about the recent EPA methane rules, the 

Clean Power Plan and the mercury and air toxic standards. 

Time constraints will prevent me from detailing the extensive 

concerns the commission has with the unprecedented EPA 

rulemakings outlined in that testimony. But you will find that 

these concerns are based on scientific fact and sound legal and economic analysis. 

You will also find that the underlying themes in EPA rulemaking 

under the Obama administration have been the consolidation of increased regulatory power in the Federal Government to the detVerDate Mar 15 2010 13:52 Dec 13, 2016 Jkt 037690 PO 00000 Frm 00067 Fmt 6633 Sfmt 6633 F:\114THCONGRESS\114X156EPAREGSENERGYASKOK121316\114X156EPAREGSENE
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riment of State authority and the circumvention of regulatory authority granted to the EPA by Congress. 

Clean Air Act rulemaking by the EPA during the Obama administration has been characterized by minimal interaction and consultation with Texas and other State regulatory authorities, underestimated or ignored compliance costs, overestimated, unjustified 

and exaggerated regulatory and environmental benefits, increased 

regulatory and economic burden on operation companies, especially 

the smaller operators who make up an overwhelming majority of 

the oil and gas industry in Texas, and the creation of one-size-fitsall regulations that ignore economic realities and the significant 

differences in regional operating conditions in State regulatory existence. 

History shows that decreases in emissions and improved environmental conditions came about as a result of innovative technological advances in market-driven efficiencies, not through the massive overreach of Federal bureaucrats. 

The Railroad Commission of Texas takes its role as a steward of 

State resources very seriously. Our rulemaking decisions are based 

on sound science and potential economic impacts to all Texans, 

mindful that it is from industry that these entrepreneurial ideas 

emerge. 

When businesses are forced to operate as bureaucracies which 

EPA seems intent on achieving through its unwarranted and overreaching rules, innovation is stifled and both consumers and the 

environment pay the price. 

EPA policies under the Obama administration have consistently 

striven to eliminate competitive energy markets while ignoring engineering realities, sound science and economic impacts. 

Simultaneously, EPA has circumvented both the authorities delegated to it by Congress and the rights of State regulatory agencies 

to establish their own rules. 

I believe you will find ample evidence of this in my submitted 

testimony. I respectfully urge this committee to prevent this administration from further assuming unconstitutional powers and 

imposing intrusive regulations on the States to ensure that our Nation continues to serve as the global energy leader we are today. 

Thank you for this opportunity to testify. 

[The prepared statement of Mr. Porter follows:] 

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Mr. WHITFIELD. Thank you, Mr. Porter. 

Our next witness is Mr. Lynn Helms, who is the director for the 

North Dakota Industrial Commission at the Department of Mineral 

Resources. Thanks for being with us, and you are recognized for 5 

minutes. 

STATEMENT OF LYNN D. HELMS 

Mr. HELMS. Good afternoon, Chairman Whitfield and Ranking 

Member Rush, members of the subcommittee. Thank you for this 

opportunity to provide comments from the great State of North Dakota on EPA’s regulatory activity during the Obama administration. 

North Dakota is ranked second in the United States amongst all 

the States in production of oil and gas. We produce approximately 

430 million barrels of oil and 585 billion cubic feet of natural gas 

each year. 

The North Dakota Industrial Commission and Geological Survey 

oil and gas division regulate operations related to production of oil 

and gas and protection of the State of North Dakota’s environment. 

I have highlighted in my written testimony nine specific actions 

since 2009 that have had major negative consequences to North 

Dakota regulatory environment and/or economy. 

It needs to be kept in context that those have been done in conjunction with seven regulatory actions by the Department of the Interior. 

Those nine are the March 2010 to present hydraulic fracturing 

drinking water study, the December 2010 class six CO2 rules, the 

February 2014 hydraulic fracturing using diesel fuel rule, the May 

2014 hydraulic fracturing chemical disclosure rule, the May 2015 

waters of the U.S., August 2015 Clean Power Plan, May 2016 

RCRA lawsuit, June 2016 methane reduction for new and modified 

sources and the June 2016 methane reduction information request 

on existing sources. 

North Dakota has been left with no choice but to litigate three 

of those actions and we have been involved in that litigation. I 

want to focus the remainder of my time talking about two or three 

of those. 

In June of 2014, with the final rule published in August of 2015, 

the Environmental Protection Agency under President Obama’s climate action plan proposed to cut carbon pollution, known as the 

Clean Power Plan. 

This directly interferes with North Dakota’s ability to reduce natural gas flaring in the State. In order to build the infrastructure 

to collect and process the natural gas that’s coming from the 

Bakken formation, the industry needs 300 megawatts of new electric generation. 

Instead of granting us the ability to produce or build 300 

megawatts of additional generation, the plan requires that we cut 

or retire 1.3 gigawatts of existing power generation in the State. 

The result of that is a cumulative increase of flaring of almost 

a trillion cubic feet of natural gas, a loss to the State of over $100 

million in gross production tax revenue and a loss to the mineral 

owners of the State of $570 million in royalty income. 

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North Dakota, along with 26 other States, sought and received 

a stay of this rule. North Dakota’s reduction of carbon emissions 

under the proposed rule was 11 percent. That was going to be difficult but maybe achievable. Under the final rule, it was raised to 

45 percent with no warning that that was coming. 

No credit for pre-2013 natural gas or wind installations, and I 

can guarantee you that power costs will not go down in the State 

of North Dakota. 

On June 3rd of 2016, a final rule proposing a suite of changes 

to the Clean Air Act for new and modified emission sources in the 

oil and natural gas industry was published in the Federal Register. 

This rule contains all sorts of undefined things like ‘‘technically 

achievable,’’ ‘‘technically feasible,’’ ‘‘technically infeasible.’’ It’s a direct conflict with rules in the State of North Dakota for reducing 

natural gas flaring. 

The rule does not adhere to the statutory language in the Clean 

Air Act for defining sources of emission. It aggregates sources using 

a new quarter-mile standard which will cause problems for the 

State of North Dakota for regulating how oil well sites are placed 

in the State in order to minimize the footprint of those sites on the 

State’s landscape. 

Finally, the proposed rule says it doesn’t have any federalism implications. But that’s not true. The proposed rule will conflict with 

numerous North Dakota current regulations. 

North Dakota is currently filing a petition for review of this 

harmful rule. And then finally, on June 3rd of 2016, the proposed 

information collection effort for oil and gas facilities was published 

in the Federal Register. 

Information requests for tens of thousands, maybe 100,000 existing facilities, are being distributed across the country. Comments 

on this proposed information collection are due August 2nd and we 

plan to submit extensive comments. 

Unfortunately, North Dakota has submitted extensive comments 

on all of these rulemakings and not one of them has been accepted 

by the EPA. 

Thank you for your time. 

[The prepared statement of Mr. Helms follows:] 

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Mr. WHITFIELD. Thank you, Mr. Helms. 

And our next witness is Mr. Robert Weissman, who is the president of Public Citizen, and Mr. Weissman, welcome and you are 

recognized for 5 minutes. 

STATEMENT OF ROBERT WEISSMAN 

Mr. WEISSMAN. Thank you very much, Mr. Chairman, and 

thanks to the gentleman from Virginia for joining us today and tolerating this panel discussion. 

I wanted to make three brief points in my 5 minutes about both 

the regulatory process generally and about the regulatory process 

as regards clean air rules and EPA action. 

The first point is that the overall benefits of regulation issued 

under both the Obama administration and the preceding Bush administration massively outweigh the costs. We have heard some 

reference to the best evidence about this earlier in the hearing. 

Generally, for overall regulation, in the low end benefits outweigh costs two to one but probably as much as fifteen to one. In 

the area of EPA rulemaking, benefits outweigh costs four to one or 

as much as twenty to one. 

And it should be said that I think the members of this committee 

are absolutely right to focus on individuals who may be displaced 

from jobs and recognizes there are real-life costs. 

But they ought to also recognize the real-life benefits. These 

aren’t just dollars being saved. These are illnesses being averted, 

deaths being prevented, children who are not suffering asthma attacks. The benefits are real. 

As I discussed in my written testimony in some detail, retrospective looking at cost estimates shows that industry routinely overestimates costs and particularly in the environmental area and I 

will come back to that point later. 

Second point I want to make is about the issue of regulatory 

delay. Public Citizen last week issued a new study looking at the 

issue of regulatory delay and showing how slow our rulemaking 

process is. 

I think it’s an area that this committee should look at because 

we actually need to do much better at getting rules out the door 

faster both to achieve their protective benefits and to avoid the 

problems of regulatory uncertainty. 

Our study found that economically significant rules are 40 percent slower to be issued than other rules, that economically significant rules that are accompanied by a regularly flexibility analysis 

and an advance notice of proposed rulemaking take almost 5 years 

to issue, longer than the term of a president. 

We found that regularly delay as a problem is getting worse, considerably worse now under the Obama administration than it was 

previously under the Bush administration. It now takes almost 3.8 

years for a major rule to be issued. 

We found that EPA and the Department of Energy are two of the 

slowest agencies at issuing rules and also, incidentally, that the 

Obama administration issued about 10 percent fewer rules than 

the Bush administration had done through this period of its term 

in office. 

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Lastly, I want to address focusing more specifically on clean air 

rules and looking at those points and drilling down as how they relate in the clean air and energy industrial sector. 

Again, in this area, the benefits massively outweigh the costs, 

and just to focus on this area of the Clean Power Plan because I 

think there has been some uncertainty about it, the Clean Power 

Plan doesn’t just generally have benefits that outweigh costs. 

Consumer cost—the consumer electric bill will go down under the 

Clean Power Plan. I’m just talking about the Clean Power Plan, 

and the reason for that is the consumers will be using less energy 

under the Clean Power Plan than they will be without the Clean 

Power Plan. 

So even under the conservative accounting of the EPA, and it is 

conservative accounting, the slight uptick in cost per unit will be 

offset significantly by reduced actual consumption. 

Our analysis—Public Citizen’s analysis shows that that is true 

not just for the Nation as a whole but in every single State. In 

every single State, consumer electric bills will decline under the 

Clean Power Plan. 

I should say as well that we retrospectively that costs are overestimated. The Wall Street Journal talking about the mercury rule 

noted that some industry trade groups has argued that the mercury rule would prompt blackouts and skyrocketing electricity 

prices. Already we know by 2015 that neither scenario had materialized due largely to increased production of natural gas. Again, 

we see cost estimates oversold. 

If you look at the clean air rules you also see that key benefits 

are not captured in the EPA’s regulatory impact analyses and that 

they often don’t take the best choice in terms of advancing net benefits for society, choosing instead to focus on lowering cost, even 

though they are forsaking benefits for the American people. 

Looking at the rules—the actual rules that are issued by the 

EPA—the Clean Power Plan, mercury rule, the ozone rule—actually you see that the rulemaking process is slower than the aggregate statistics I discussed earlier suggests because the EPA is so 

slow to begin rulemaking in the first place. The ozone rule is notable. But we just got issued a rule that was required actually under 

statute to initially be issued in 2002. 

And last, I think it’s worth saying in the EPA context, as you 

look at the science and you look at the actual rulemaking, what is 

apparent is that the EPA massively trails the science. 

The EPA is not acting nearly fast enough or nearly aggressively 

enough based on what the science says and its statutory obligations. 

Thank you very much. 

[The prepared statement of Mr. Weissman follows:] 

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Mr. WHITFIELD. Thank you, Mr. Weissman. 

Our next witness is Mr. Charles McConnell, who is the Executive 

Director for Energy and Environment Initiative at Rice University, 

and he also was former Assistant Secretary for Fossil Energy at 

the Department of Energy. 

So, Mr. McConnell, welcome, and you are recognized for 5 minutes. 

STATEMENT OF CHARLES D. McCONNELL 

Mr. MCCONNELL. Thank you, Mr. Chairman and members. Glad 

to be here to testify about the Sections 111(b) and (d) of the Clean 

Air Act and the Clean Power Plan. 

But before I begin, I would like to quote a novelist, Saul Bellow, 

who said a great deal of intelligence can be invested in ignorance 

when the need for illusion is deep. 

And so for me, that is what is summarized by a lot of what I 

have heard most of the day today. I got three key issues that I 

think we need to be real clear about. 

One, these EPA rules, specifically the Clean Power Plan, does 

not serve environmental purposes. Calling this environmental regulation is disingenuous. 

Two, we don’t have functioning interagency collaboration. I personally witnessed that at the DOE. And three, EPA’s proposals actually harm energy sustainability. So the projected chart that hopefully we’ll be able to show here will outline what the Clean Power 

Plan really does. 

But I would like to say before we go to that I am not here representing a political agenda or a political point of view. I believe 

in climate change. I am not a denier. CO2 is a forcing function for 

climate change. 

It’s not solely the forcing function but it is a contributor and I 

think we have an obligation to do something about CO2. I served 

in this administration and believe in these fundamentals. But what 

we have with this plan, as this chart indicates in front of you, this 

gives us a worldwide CO2 concentration reduction of .2 percent. 

It is a projected whopping .01 degree impact to global temperature rise, and the sea level reduction impact is the amount equivalent to two human hairs, and it is all offset by three weeks of Chinese emissions. I find this plan stunningly unambitious. 

Our EPA Administrator actually acknowledged these facts in testimony but said we should not judge this plan by its ideological 

global leadership. It’s in fact the cornerstone of U.S. climate policy 

to show the world, and I ask show the world what—that we are 

willing to make our energy more expensive, less reliable for de 

minimis CO2 impact? 

The fact that we have seven States bearing 40 percent of this 

burden? And energy costs will go up. That’s according to PUC analysis across the country. 

This is a false sense of accomplishment. It is not meaningful climate policy, and I won’t sit here and recognize it as such. It’s a 

forced renewable portfolio standard that is a classic case of regulatory overreach. 

The EPA is required to seek expertise through interagency collaboration and public notice and comments which actually includes 

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those actually conducting business. How could this program have 

been hatched? 

Well, I would submit to you that the interagency collaboration is 

illusionary. I led that office at DOE for 2 years and bore personal 

witness to any number of circumstances. 

An example was a specific request made by EPA of my office to 

comment on a term they called resourced adequacy. And what is 

that? It’s a theoretical analysis of theoretical installed capacity that 

might be utilized to provide theoretical system and supply reliability. 

It’s a term to appear insightful but it really isn’t. It’s ideological 

mumbo jumbo. 

It’s forcing closure of coal and eventually gas generation that we 

rely on. So why not ask of our PUCs to analyse real reliability and 

real onstream data? Why not model real reliability performance? I 

would submit it’s because of the inconvenient truths. 

EPA rules don’t promote real energy sustainability either. We 

have a framework at Rice that’s being broadcast here where we ask 

three questions—is our energy more accessible, reliable and secure? 

Are we making our energy more affordable, cost effective and 

globally competitive and are we being more environmentally responsible? You got to answer yes to all three, and the CPP fails 

this miserably. 

I think we need to do three things. One, we need to embrace how 

impactful clean fossil technologies are to our environment. Not 

focus on shutting down the coal mining industry or the oil and gas 

industries that we believe in. 

The second thing we need to do is to meet these climate goals. 

We need carbon capture utilization and storage. It has been identified as the IPCC as the most critical technology for the world to 

meet climate targets and the CPP rules deter it. 

And the third thing is we need to encourage public/private partnership to enable new transformative technologies, not obstructing 

them with burdensome regulation. 

Let me close with a quote often attributed to Mark Twain and 

recently Laurence Peter from the Peter Principles. The question is 

sometimes I wonder whether the world is being run by really smart 

people who are putting us on or by imbeciles who really mean it. 

Thank you. 

[The prepared statement of Mr. McConnell follows:] 

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Mr. WHITFIELD. Thank you, Mr. McConnell. I appreciate that. 

At this time, I would like to recognize the gentleman from Texas, 

Mr. Olson, for 5 minutes of questioning. 

Mr. OLSON. I thank the chairman, and welcome to our five witnesses. I hope you enjoyed the fireworks show from the first panel 

on July 6th the way I did. 

A special howdy to the chairman of the Texas Railroad Commission, David Porter, who I found out was born at the same hospital 

I was, the Madigan Army Hospital in Fort Lewis, Washington, 

many months before I was born, with all due respect. 

And also a special howdy to Chuck McConnell, the executive director of the Energy Environment Initiative at my alma mater, 

Rice University. Wise old owls are always welcome here. 

For Chairman Porter, Mr. Kavulla and Mr. Helms, the regulators 

on our panel, could you describe the—well, first of all, you have 

been in the position of having to implement EPA’s regulations that 

address real world issues that either are unknown, crop up. It is 

out of control. 

My question is for all three of you, starting with you, Chairman 

Porter. Can you describe the impact you think the methane rules 

have on Texas energy production and, more broadly, can you say 

anything about Ms. McCabe’s testimony that you disagreed with 

and to which you would like to respond to correct the record, so to 

speak? 

Chairman Porter, you are first at bat, sir. 

Mr. PORTER. Definitely, and I address it in my written testimony. 

But I think the methane emissions rules would be very bad for the 

oil and gas industry in Texas and one of my biggest concerns is the 

effect that it would have on the small operators if they really small 

stripper wells are not exempted from those rules. 

Even a relatively large number of wells is represented by the 

stripper production, which is 10, 15 percent of total production but 

it still is a viable part of the Texas economy, particularly in the 

rural areas and small towns are support by the small oil and gas 

companies that operate there. So the economic impact is huge. 

Mr. OLSON. Mr. Kavulla, your comments, sir, about what was 

raised or anything you want to straighten out with Ms. McCabe’s 

testimony, or a fact check? 

Mr. KAVULLA. Yes. Maybe just this persistent assertion that has 

come up that utility bills will lower in cost, which I don’t find to 

be a credible assertion. 

I mean, the premise of environmental regulation, whether you 

agree with it or not, is that it serves to restrain some kind of economic production to produce public health benefits. 

Here there is an assertion that an industry that is in the business of offering its production, sometimes in competitive markets 

but other times under the regulation of PUCs, on a least cost basis 

is not obtaining economic efficiencies that you expect them to obtain. 

I don’t think it’s credible to say that consumers would just save 

money if an environmental regulator would stage an intervention 

into the market. To me, that doesn’t make sense, and if true it 

means that utility commissions everywhere are not doing their jobs 

146 

at which I know them for a fact to be requiring the low cost acquisition of energy efficiency as a matter of law. 

Mr. OLSON. And Mr. Helms, back to you. I heard your comments 

in your opening statement about the methane emissions so I’m 

going to talk to Mr. McConnell. 

In your testimony you mentioned that many of EPA’s rules fall 

short. They don’t live up to the promises. That is something I have 

touched on a lot in recent hearings. 

Can you talk about the impact of the Clean Power Plan, how will 

that impact? Does it hit the target? Or as you put the slide up 

here, is it way off base? 

Mr. MCCONNELL. It’s wrapped up to be climate legislation. But 

in fact, as you can see from the chart, it doesn’t do anything about 

the climate. I think, Mr. Congressman, in my view, the climate 

story is being written globally. 

Really, much outside the United States, in places like China we 

saw a chart earlier today with all the coal plants being developed 

all over the world, that’s a reality. That is not something the EPA 

is going to stop. That is going to happen. 

And so for the United States to be a global leader we need to provide global technology leadership, not global ideological leadership 

with a plan that’s wrapped up to be something that it isn’t, to punish ourselves for no climate benefit. 

Mr. OLSON. Amen. I was just in China and we saw their reports 

in the local press. They’re building new power plants they know 

they don’t need. They just want the jobs, more coal emissions. So, 

again, it’s a global challenge. It’s not just America’s. Let’s take care 

of our country first. I yield back. 

Mr. WHITFIELD. The gentleman yields back. At this time, I recognize the gentleman from Illinois, Mr. Rush, for 5 minutes. 

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

Mr. Weissman, I am quite interested in your views about the 

delays within the regulatory agency that is assigned to protect the 

American people. 

And you stated in your testimony that there have been more regs 

under the Obama administration than under the Bush administration. Did I hear you correctly? 

Mr. WEISSMAN. No. Actually, about 10 percent fewer regulations 

under President Obama than President Bush. 

Mr. RUSH. Fewer then. But in regards to the delays, what do you 

think that we should be doing about the delays? 

Mr. WEISSMAN. Well, it is—— 

Mr. RUSH. What? 

Mr. WEISSMAN. Yes, it is a confounding problem. I think the single source—single primary source of delay is excessive analytical 

requirements. So the Agency is to issue rules. 

If you actually look at the technical material they put out it’s astounding in its volume and unfortunately there are several proposals in Congress to add analytical requirements, which would 

worsen the delay problem. 

So I think the first thing to look at is how to pare back some of 

the analytic requirements and the second is to hone in on the role 

of the OIRA, the Office of Information and Regulatory Analysis, 

and see how OIRA can be forced at minimum to adhere to the 

147 

standard that the—to the schedule standards that it’s supposed to 

abide by. It routinely does not turn rules around according to the 

schedule it’s required to under the executive order. 

Mr. RUSH. What does—what is the impact when the rules are designed to protect the environment and public health, safety and financial security and then there are also the regulations that are 

taking the longest to finalize and experience the most delays in the 

regulatory process, what is the impact on the community? 

Mr. WEISSMAN. Yes. It is quite severe. For one thing, just as a 

business matter it’s harmful because of—the biggest problem for 

industry turns out to be regulatory uncertainty, not knowing what 

the rules of the game are. Once the rules are established industry 

actually is pretty adept and nimble at adapting. 

But in terms of—but we also lose over time the benefits of those 

regulations. So, for example, the mercury standard is projected to 

save between 4,000 and 11,000 lives every year—every year. 

If we wait 3 years, we are losing 12,000 lives. And we might not 

know who the names of those people are, but they are real people. 

They are not statistical abstractions. 

Mr. RUSH. So are you saying, then, there is very little that we 

can do as a Congress to try to remove some of the delays and the 

hindrances to getting these rules and these regulations before the 

American people quicker? 

Mr. WEISSMAN. No, I think there is a lot that Congress could do 

if it were so inclined. I would focus a lot on the role of OIRA and 

holding that agency to account to make sure it speeds the process 

and it does not needlessly and inappropriately delay a rule. 

I would look at the level of analytic requirements and reduce 

what agencies are required to do and I would also look at the problem of revolving door where people go from the regulated industry 

into the regulatory agency and then back to the regulated industry. 

I think that revolving door creates a culture where agencies are 

inclined to go slow because they are overly sympathetic to the regulated industry of which they once were a part of and may be seeking employment with in the future. 

Mr. RUSH. I want to thank—Mr. Chairman, I yield back. 

Mr. WHITFIELD. The gentleman yields back. At this time, the 

chair recognizes himself for 5 minutes of questions. 

You know, from the questions of Ms. McCabe, I think it was 

quite obvious to everyone that there is a lot of emotion about this 

issue and when we talk about the Clean Power Plan, I think Mr. 

McConnell really touched on an important point, and that is that 

the result of the Clean Power Plan is so minute that it’s almost 

meaningless. 

And yet, it’s being pushed by the administration worldwide and 

made a big deal of at the Paris agreement. We signed the agreement, we implement this to fulfill our responsibility. 

So it appears the U.S. is being a leader in addressing climate 

change. But in reality, not anything is measurably being done to 

climate change and yet the U.S. is really being punished. 

And one of the problems that I have had with the Clean Energy 

Plan is the tortuous route that EPA went through to give itself the 

power to do what it was trying to do. And historically, in the U.S., 

the States, through the public power commissions, the utility comVerDate Mar 15 2010 13:52 Dec 13, 2016 Jkt 037690 PO 00000 Frm 00151 Fmt 6633 Sfmt 6633 F:\114THCONGRESS\114X156EPAREGSENERGYASKOK121316\114X156EPAREGSENE
148 

missions or whatever, which you represent, Mr. Kavulla, have had 

this authority to deal with the energy issues. 

And Ms. McCabe today responded oh, this is not a regulation 

about energy—it’s a regulation about emissions. 

But in reality, this does give EPA authority to determine what 

power is being used in the power plants. Is that your impression, 

Mr. Kavulla? 

Mr. KAVULLA. Mr. Chairman, I would agree with that characterization, yes. I think fundamentally because the rule does not rely 

on an assumption about a particular pollution control technology 

being the benchmark for the emission standard that is set for the 

emitting plants, and it instead relies on assumptions that coal 

plants will produce less often if there is simply more wind and natural gas, that it is essentially a regulation on the energy system 

broadly. 

Mr. WHITFIELD. And Mr. Porter, would you agree with that characterization? 

Mr. PORTER. I would. 

Mr. WHITFIELD. And Mr. Helms, would you? 

Mr. HELMS. Very definitely, and when you look at the methane 

reduction rules, Mr. Chairman, when you look at them policing the 

fact that you’ve got to get a Title 5 permit now for every multi-well 

horizontal drilling pad, you now have the environmental regulators 

deciding when and where oil and gas wells are going to be drilled 

as opposed to the oil and gas regulators. 

Mr. WHITFIELD. And Mr. McConnell, would you agree with that 

characterization? 

Mr. MCCONNELL. Yes, I would, and we talked a lot this morning 

about flexibility and how it’s really flexible. Well, that is disingenuous. It is not flexible. 

If you look at the thresholds and you look at the technologies and 

fuels associated with those thresholds it makes you choose wind or 

solar, period. 

You don’t have an option in particularly the seven States that 

are bearing 40 percent of the load of the responsibility. 

Mr. WHITFIELD. Yes. And Mr. Weissman may not agree with this 

characterization but we all recognize the benefit of the Clean Air 

Act and we all understand the importance of the impact on health. 

But this is fundamentally changing the way we regulate energy 

production in America and I think that is one of the main reasons 

why the Supreme Court issued a stay because it was kind of done 

under guise of darkness and no one really focused on it, certainly 

not the public because it’s so complicated. 

Some of you mentioned in your testimony how complex this is. 

And so that is the only point that I would make, and I’ll yield back 

the balance of my time and recognize Mr. Green for 5 minutes of 

questioning. 

Mr. GREEN. Thank you, Mr. Chairman. I want to thank the chair 

of the Texas Railroad Commission. Having served 20 years in the 

State legislature, I appreciate the work you do, and also Charles 

McConnell, who we flew up yesterday on the plane and what you 

do at Rice University and we talked—I’m on the other side of town. 

I have the University of Houston. So we are glad to partner with 

Rice on lots of things. 

149 

I want to apologize to the panel. We actually have a conference 

committee going on on our main floor, so some of us are coming in 

and out during the hearing for votes and issues on that. 

But Chairman Porter, in your testimony, you raised concerns 

about the regulation of low production well sites. Just last week, 

the U.S. Energy Information Administration stated low production 

wells, or as we call them stripper wells, account for approximately 

10 percent of U.S. production. 

EIA estimated there is approximately 380,000 low production 

wells operating in the U.S. whereas there are 90,000 non-stripper 

wells. The production from each well would limit any emissions, 

however. The sheer volume of wells would raise some concern 

about the potential impact. Can you explain a bit more about your 

concerns and why you think EPA should exempt these wells? 

Mr. PORTER. The reason I think EPA should exempt these wells, 

and there are studies being done at this time, is that the impact 

on each individual well was extremely low because of the volume. 

And I think the reason it should be also is the economic impacts 

on both energy production for the Nation and, of course, the economic impact on the State of Texas and the small communities and 

the small independent oil men that are the backbone of most of 

rural Texas would be dramatically impacted by the cost of complying with the same type of emissions standards that you’d have 

on the large horizontal well at this time. 

Mr. GREEN. Well, and I also understand the difference between 

what traditionally was large horizontal as compared to what we 

are doing with the fracking in south Texas and even before there, 

relatively quick wells that you get production out and you move 

them. 

Director Helms, in your testimony, you write that the State of 

North Dakota is ranked number two in the United States in production of oil and gas and I would like to remind everyone that 

Texas is still number one, after North Dakota, California and 

Pennsylvania. So we know a little bit about oil and gas. 

Recently, the EPA identified the next issue of area they address 

as methane from oil and gas production. When I drive through 

south Texas I see there is no one in the oil and gas sector that 

wants to see that flaring because that is product going out and the 

royalty owners and I know the—don’t want to see that if they are 

not getting their royalty on it. 

And I also know that the reason companies flare gas is because 

they lack the infrastructure required to capture it or send it to the 

market. 

Can you talk a little bit about the infrastructure challenges 

North Dakota faces and how building, gathering lines would help 

alleviate the issue of methane flaring? 

By the way, I have never not lived on a pipeline easement in 

Houston, Texas in my life and if Texas doesn’t have the infrastructure then I don’t know of anybody who doesn’t but we do have infrastructure problems with those in south Texas. 

Can you talk about what North Dakota has been trying to with 

the gathering lines? 

Mr. HELMS. Yes. Thank you, Representative Green. 

150 

North Dakota was faced with the largest oil field in the world, 

the Bakken aerial extent, and it was discovered fairly recently the 

infrastructure did not exist for gathering and processing the natural gas. 

We found ourselves in 2012 flaring 36 percent of the natural gas. 

We needed to encourage—— 

Mr. GREEN. Did the State not receive any tax benefit on those 

either? 

Mr. HELMS. Well, no tax benefit, no royalty benefit on flared natural gas. Absolutely. And so we implemented rules through the industrial commission to reduce that natural gas flaring. 

I am happy to report it’s down to 8 percent now. But the Clean 

Power Plan and the methane rules are going to interfere directly 

with North Dakota’s plan for reducing its gas flaring by limiting 

the power that we have available for powering those natural gas 

processing plants and by changing the configuration of the oil field 

requiring us to add three to four times as much pipeline in the 

ground in order to reach these smaller pads that are going to be 

required under the methane reduction rules. 

And so they work exactly counter to the reasonable purpose of 

reducing flared methane and reducing methane leaks. 

Mr. GREEN. Well, did EPA take into consideration, in my last 

eight seconds, what North Dakota has been doing already in reducing it? 

Mr. HELMS. Congressman Green, there was not one single bit of 

consideration given to our comments with regards to that fact, and 

therefore we are petitioning them for reconsideration of the rule. 

Mr. GREEN. And, again, for the record, it seems like if you are 

already reducing it and you have a plan that you’ve done it without 

EPA why would they not accept it? 

Mr. Chairman, I know I’m out of time. 

Mr. WHITFIELD. I thank the gentleman. I recognize the gentleman from Ohio for 5 minutes. 

Mr. LATTA. Well, thank you, Mr. Chairman, and thanks to the 

panel for being with us today, this morning, this afternoon. Appreciate it. 

Mr. McConnell, if I could ask you the first question. It has been 

said that carbon capture utilization and storage and enhanced oil 

recovery might only be a niche in a full scale CO2 storage opportunity to require much more than EOR geological opportunities. 

Is CCUS a niche, or is there a greater opportunity, and just to 

follow-up on that, if it is a greater opportunity, what kind of actions will it take from us to make the most of this opportunity? 

Mr. MCCONNELL. Well, clearly, the answer to your second question is we need to encourage the development, set up an infrastructure in this country that actually promotes the development of a 

technology that needs continual investment in R and D. 

But it’s interesting, we’re talking about research and development and deployment of something that the EPA has already determined to be commercially available and that is also part of disingenuous conversation because if we still have R and D dollars 

being put against that technology how could it be commercially 

ready? 

151 

It’s unimaginable. But to your first question, is it a niche? Absolutely not. I took over at the DOE in 2011 as we had done the national carbon sequestration mapping across this country, looking at 

storage opportunities. 

But I suggested to our national energy technology laboratory that 

we needed to find where the oil deposits were in this country because that is where we could get economic benefit from carbon capture, utilization and storage and be able to safely and permanently 

store those CO2 emissions in that formation. 

So you get a perfect two-fer. You get a business development opportunity for jobs, manufacturing and growth and you get a climate 

benefit. 

But instead what we’ve done is we’ve looked into these regulations with the EPA now putting onerous responsibilities onto oil 

and gas operators that is actually slowing the implementation of 

what the IPCC has already determined to be the most important 

global technology in our march toward achieving climate targets 

globally. 

There are oil opportunities off the shore of China, off the North 

Sea, in the Gulf and around the world where this can be deployed 

and taken globally to make a globally impact. 

Mr. LATTA. Thank you very much. 

Chairman Porter, I think you have testified before us before. I 

think you’re sitting in the same seat, if I remember correctly. But, 

you know, I would like to just go back to your testimony because, 

again, listening to Ms. McCabe’s testimony and talking about, you 

know, going out and talking with a lot of folks around the country. 

But you know, looking at your testimony and I know you didn’t 

have a chance to run through some of these but I’m going to just 

run through a couple of them real quick. 

Minimal interaction and consultation with Texas and other State 

regulatory authorities underestimated or ignored compliance costs, 

overestimated unjustified exaggerated regulatory environmental 

benefits, increased regulatory and economic burden on operating 

companies in a one-size-fits-all. 

I don’t see from your comments that she must have talked to 

you. Was there any kind of a cost benefit that was done for the 

State of Texas of these regulations going into place? 

Mr. PORTER. Are you asking about the State of Texas or the Federal Government? 

Mr. LATTA. Well, I’m just asking if the State of Texas got consulted with all these different issues that you brought up in your 

written testimony. 

Mr. PORTER. No, not directly. I mean, of course, like everyone 

else we had the opportunity to make comments and we—the Railroad Commission quite often do make comments on Federal regulations and for the most part they seem to be generally ignored. Occasionally, something is picked up. But—— 

Mr. LATTA. So you don’t think there was much interaction that— 

or really listening to what you all had put forward to the EPA 

then? 

Mr. PORTER. Not a lot. I will say as far as our interaction between the EPA I was first elected to office in 2010, came in 2011. 

152 

Interaction was very unpleasant with the EPA at that point in time 

between the Railroad Commission. 

In the last few years, it has gotten more civil. I’m not saying that 

they listen to us a lot. But at least the lines of communication are 

a little more open, and it’s a little more civil than it was when I 

first came into office 5 and a half years ago. 

Mr. LATTA. Mr. Helms, how about the same question? Do you 

have a lot of interaction? Do they listen to you? 

Mr. HELMS. Congressman Latta, very little interaction, and as I 

stated in my comments, none of our recommendations on any of 

these rules were implemented. 

Speaking to the carbon capture and storage, North Dakota is the 

only State who has applied for primacy. We did that back in June 

of 2013. We have progressed through the entire process, and our 

primacy application has been sitting on the Administrator’s desk 

since July 14th of 2014 with no action. 

Mr. LATTA. OK. Thank you very much. 

Mr. Chairman, my time has expired and I yield back. 

Mr. WHITFIELD. I thank the gentleman. 

Now I recognize the gentleman from Missouri, Mr. Long. 

Mr. LONG. Thank you, Mr. Chairman. 

Mr. Kavulla, in Missouri we get 80, 85 percent of our power from 

coal, just to say that kind of as a precursor here. But you mentioned in your testimony that the EPA has interpreted the Clean 

Air Act to give it the power to plan the resource mix for U.S. power 

sector. 

Could you expand on this? What does this mean for States having to implement the Clean Power Plan? 

Mr. KAVULLA. So in States like Missouri as well as Montana and 

other heavily coal-dependent States there is no viable pathway to 

come into compliance with the Clean Power Plan’s goal unless you 

basically build natural gas and renewable infrastructure in order 

to displace some of your coal output. 

That’s the premise of EPA’s goal setting or requirement process 

in the regulation and I expect that that would be the pathway toward compliance that most utilities would have to find themselves 

in unless and until something like carbon capture and sequestration becomes commercially available on a wide scale. 

Mr. LONG. Are there any functioning plants right now of carbon 

sequestration up and running operations? I know when we did this 

a year, a year and a half ago there weren’t any. Are there today? 

Mr. KAVULLA. In North America, I believe there might be one in 

Saskatchewan. There is one potentially coming online that’s been 

the subject of a great deal of media scrutiny recently in Mississippi. 

But in general, I wouldn’t consider that a commercially available 

technology. I’ll put it this way. I am not aware of any regulated 

utility or any utility in the competitive sector which is currently 

proposing to its regulator the adoption of carbon capture and sequestration as the least cost alternative. 

Mr. LONG. How about the reliability? Can you discuss the impact 

of the Clean Power Plan? What effect it will have on electric reliability if many of these coal-fired power plants are shut down to 

comply? 

153 

Mr. KAVULLA. In my view, it could be significant and this is 

something where interagency consultation was very important and 

may not have happened as well as it should have between the Federal Energy Regulatory Commission and the EPA. 

The FERC is the agency responsible for the reliability of the 

whole electric system and particularly in those areas, especially in 

the eastern United States, that rely on competitive wholesale markets to assure enough resources for the reliability of the system. 

The sudden unavailability of some of those resources with nothing 

to step into the breach may have real implications. 

Mr. LONG. Do you think that the EPA is providing adequate 

flexibility for States to meet the Clean Power Plan standards and 

if not what impact is this having for State utility commissions? 

Mr. KAVULLA. My own personal view is that they are not. Montana has, as a percentage, the most significant reduction goal—47 

percent reduction in carbon dioxide. And frankly, when you have 

that monumental of a requirement the flexibility is a meaningless 

concept. 

I mean, you can only close down existing coal plants before the 

end of their useful lifespan in order to comply unless somehow 

there are available allowances to sell from others. So far, it doesn’t 

necessarily seem that there will be. 

Mr. LONG. In the next 5 to 10 years, if the EPA went forward 

with an updated Clean Power Plan with more stringent standards, 

what impact would this have on electric reliability? 

Mr. KAVULLA. Congressman, it’s hard to say. I mean, it’s difficult 

enough to plan just for this regulation, much less anticipate what 

the EPA may or may not do. 

Mr. LONG. I know when southwest Missouri down in the Joplin 

area whenever I travel and I look at these power plants where they 

have had to go in and spend hundreds of millions of dollars updating to the latest EPA regulations, which might take 6 to 8 years 

before you even know if the regulation is going to be implemented 

or not, it’s mind boggling. 

And then I’m also reminded of a recent trip that I made to Midland, Texas, to a large oil and gas outfit down there, and, after we 

toured one of their drilling rigs, got up on top of that and looked 

at that, we went and drove down this 2-mile—it seemed like 2 

miles; not sure it was that long—driveway back into where they 

gather all the gas and oil and sort it out and truck it out and pipe 

it out and whatever they are going to do with it. 

And there was a herd of cattle there, about 10 head of cattle, in 

this pretty small area and there was a sheriff’s car there. And they 

said, well, what’s the sheriff’s car doing. So then they went, people 

have been rustling our cattle. I thought, how can you rustle 10 

head of cattle, you know. But anyway, I said, so what are the cattle—they’re kind of in middle of nowhere. 

They said, well, that’s our example, that those 10 cows put out 

more methane gas than our entire operation here of oil, gas, drilling, and piping, and sorting it all out. 

So I am out of time. I yield back. 

Mr. GRIFFITH (presiding). I thank the gentleman and now recognize myself for 5 minutes. Let me do a little clean-up if I can. 

154 

Mr. McConnell, you said earlier that the analysis by PUCs across 

the country show that electric rates would go up for the folks back 

home. PUC is public utility companies or company? 

Mr. MCCONNELL. Yes. 

Mr. GRIFFITH. Yes. And their data indicates that their electric 

rates are going to go up under these regulations. Isn’t that correct? 

Mr. MCCONNELL. As much as 40 percent in the seven States that 

are going to bear 40 percent of the responsibility. Yes, sir. 

Mr. GRIFFITH. And I don’t think my State, Virginia, is one of 

those seven States. But our State corporation commission indicated 

previously that this would increase electric rates in Virginia as 

well. 

So that when folks talk about the rates going down you have to 

come up with a formula somewhat like Mr. Weissman did which 

show that while the per unit cost, I believe you said, the cost per 

unit goes up but we anticipate the people will use less electricity. 

Do you see any indications that people are going to use less electricity with all of these electric cars and electric gadgets than—— 

Mr. MCCONNELL. It’s kind of unimaginable, isn’t it, Congressman? Yes, and so while we look at people in America and consider 

the fact that we are more energy intensive than we ever have been 

as a society, we will continue to be so. And then more importantly, 

think about all the developing countries around the world and how 

energy intensive they are going to be over the next 15 to 20 years. 

And this formula for reduction through the reduction of power 

that people are going to have, kind of unimaginable while we all 

pull out our cellphones and text and do all the things that we do 

now, right. 

Mr. GRIFFITH. Yes, sir. I understand that. 

Now, also I thought it was interesting you talked about that 

there wasn’t interagency communication and so forth and I know 

what one of the things that the DOE is talking about now is research parity between the fossil fuels and the renewables and we’re 

not getting there and in fact there has been some push downward. 

And wouldn’t that help with what we have been talking about 

with the CCUS, the carbon capture and storage programs? 

Wouldn’t it help if we had parity on clean coal technologies? Because for places like Montana, as we just heard Mr. Kavulla say, 

it’s going to be very difficult for them to meet any of these targets 

because they are so heavily dependent on coal. 

Mr. MCCONNELL. Eighty percent of our energy comes from fossil 

fuel and yet we continue to push research down in the fossil area, 

for some strange reason, and we are doubling down on the renewable portfolio, which represents about 3 percent of our energy in 

this country. It is stunning, actually. 

And the other thing that’s stunning is while this EPA will continue to promote carbon capture, utilization and storage as a commercially demonstrated technology, we are still having conversations about an R and D budget. That is a bit disingenuous, isn’t 

it? 

Mr. GRIFFITH. Well, I will let you do the testifying here today. 

But those who have seen my statements in the past would know 

I’d probably agree with you. 

155 

Let me also talk about ‘‘applied for primacy.’’ I just want to make 

sure that folks back home know what that means. 

Mr. Helms, you said earlier that the State of North Dakota 

had—in regard to carbon capture, it had applied for primacy in 

2013. The paperwork was all finished and sitting on the Administrator of the EPA’s desk in 2014, and yet no action yet. What does 

that mean, ‘‘applied for primacy’’? 

Mr. HELMS. Well, Mr. Chairman, when you look back at the history of EPA, the first 20 years that this Agency existed it did almost everything through State primacy programs, and those programs were incredibly effective. 

Starting in about 1990, Congress and the EPA chose to go with 

top-down prescriptive regulation through massive one-size-fits-all 

national programs. That has not served the Nation well. 

Primacy is a situation where the EPA sets a basic framework. 

States apply to regulate under that framework. They get approval 

of their program through EPA in that framework, and they move 

ahead with regulation. That is usually an underground injection 

control, air quality, all of those issues. 

Mr. GRIFFITH. And when they talk about this—because my time 

is running out—when they talk about the successes that the EPA 

has had in the first decades of its existence it’s been done under 

that process with the primacy of the States, with the EPA setting 

up guidelines and the States following through. 

And now over the last five or six years or so that EPA has moved 

away to a more Washington one-size-fits-all approach. Is that what 

you are saying? 

Mr. HELMS. That is absolutely correct, Mr. Chairman, and that 

is exactly why these rules don’t work, and they can never work because they are not being done State by State through primacy programs. 

Mr. GRIFFITH. And I appreciate that. 

I will say just as an editorial comment at the end that I appreciate Mr. Weissman’s testimony, and while we won’t agree on everything, there are some things that we would probably agree on 

that might surprise him and others. 

I don’t agree on one thing that he said, though. He talked about 

the mercury rules and said that the projections were horrible and 

everything was going to happen, but by 2015 nothing had happened. The rule didn’t fully implement until 2015. We didn’t, fortunately, get a polar vortex this last winter like we had in 2013–14. 

I was reading an article this week about the deer population in 

Virginia and how badly it had been affected by the polar vortex of 

2013–14. I would still submit that some of those problems—and I 

hope we won’t get a polar vortex—but some of those problems 

brought about by shutting down our coal-fired power plants will 

show up. Should we be so unfortunate as a nation to get the same 

kind of conditions that we had in the winter of 2013–14 in the next 

couple of winters, sure, by 2025 we’ll probably be OK because we 

will have repaired the damage at great cost to the ratepayers. 

With that, my time is up, and I yield back. I do have some business to take care of. 

I would like to enter into the record correspondence from the 

committee dated December 14, 2011, to EPA regarding its benefit 

156 

analysis and EPA’s written responses dated February 3rd, 2012, 

and May 4, 2012. This correspondence relates to EPA’s use of particulate matter co-benefits in its benefits estimates. 

Also, I would ask unanimous consent that the slides that were 

shown on the television today be submitted for the record. And 

then there is some closing language we have to say about other 

stuff in there. 

There we go. And also that the record would remain open for 10 

days for any Members that wish to ask questions or submit other 

documents. 

Mr. RUSH. No objection, Mr. Chair. 

Mr. GRIFFITH. Thank you very much. Anything further? 

All right. With that being said, that would end our hearing 

today. Thank you all so much for your testimony. 

[Whereupon, at 1:12 p.m., the committee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

PREPARED STATEMENT OF HON. FRED UPTON

This subcommittee has held a number of hearings on specific EPA regulations affecting the energy and industrial sectors, but today we are going to take a comprehensive look at the over 3,900 final rules EPA has published in the Federal Register. Many of the regulations on their own threaten jobs and affordable energy in 

Michigan and areas across the country, but it’s the cumulative effect of regulations 

that matters most. 

Regulated energy producers, manufacturers, and other job creators don’t get to 

pick and choose which EPA requirements to comply with—they must meet them all. 

Likewise, State agencies responsible for maintaining affordable and reliable electricity supplies and overseeing energy production must somehow find a way to implement all of EPA’s regulations and mandates, no matter how unworkable, costly, 

or ill-suited to that State’s particular circumstances. 

Setting aside legal questions raised by certain rules, the practical challenges associated with implementing the onslaught of new energy-related regulations has never 

been greater. The Clean Power Plan alone imposes an unprecedented set of new 

mandates, and in conjunction with Utility MACT, ozone, and other major rules already in place, EPA is dramatically expanding the burden on energy producers and 

users. Beyond the costs, EPA is also imposing unprecedented control. The Agency has 

effectively bypassed the Department of Energy, the Federal Energy Regulatory 

Commission, and the North American Electric Reliability Corporation, who have 

longstanding statutory roles in setting energy policy. Perhaps most concerning, the 

Agency has sidestepped Congress, which never authorized the expansive cap-andtrade scheme that has become the centerpiece of the Obama EPA agenda. 

The problem is not just that EPA lacks the statutory authority to dictate energy 

policy, but that is also lacks the competence to do so. For example, EPA’s current 

and future proposed rules are contributing to an evolving power sector transformation and forcing many coal-fired power plants to shut down which raises serious concerns about electricity costs and reliability that the Agency is not equipped 

to confront. EPA lacks the technical and policy expertise of, and should not be substituting its own judgments for, the experts at FERC, NERC, and State public utility commissions. 

And, unlike FERC and State public utility commissions, the Agency has no obligation to keep electric rates competitive. These increases would be even greater if not 

for affordable natural gas—something that is now under threat from stringent new 

EPA regulations targeting emissions from natural gas wells. 

EPA’s regulations have also been inundating American manufacturers. Not only 

do they face uncertainty regarding future electric rates and reliability, but many 

also face direct regulation under complex and unworkable rules. From bricks to cement to automobiles, the Obama administration has targeted many made-in-America products. On top of all that, the latest ozone rule will further add to operating 

costs at most existing facilities while making it very difficult to open a new factory. 

And it is important to remember that the cumulative burden EPA imposes here in 

the U.S. is far more stringent than most of our industrial competitors, so American 

manufacturers are being placed at a global disadvantage. 

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The consequences are significant, and President Obama is on his way to becoming 

the first president in modern times to not have at least one year of 3 percent economic growth. It is important that we understand the impacts of these regulations 

affecting our critical energy and industrial sectors. 

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