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VOLKSWAGEN’S EMISSIONS CHEATING SETTLEMENT: QUESTIONS CONCERNING ZEV PROGRAM 

IMPLEMENTATION 

HEARING 

BEFORE THE

SUBCOMMITTEE ON OVERSIGHT AND 

INVESTIGATIONS 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

DECEMBER 6, 2016 

Serial No. 114–177 

( 

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 OVERSIGHT AND INVESTIGATIONS

TIM MURPHY, Pennsylvania 

Chairman 

DAVID B. MCKINLEY, West Virginia 

Vice Chairman 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

H. MORGAN GRIFFITH, Virginia 

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 

JOE BARTON, Texas 

FRED UPTON, Michigan (ex officio) 

DIANA DEGETTE, Colorado 

Ranking Member 

JANICE D. SCHAKOWSKY, Illinois 

KATHY CASTOR, Florida 

PAUL TONKO, New York 

JOHN A. YARMUTH, Kentucky 

YVETTE D. CLARKE, New York 

JOSEPH P. KENNEDY, III, Massachusetts 

GENE GREEN, Texas 

PETER WELCH, Vermont 

FRANK PALLONE, JR., New Jersey (ex 

officio) 

(II) 

(III) 

C O N T E N T S 

Page 

Hon. Tim Murphy, a Representative in Congress from the Commonwealth 

of Pennsylvania, opening statement ................................................................... 1 

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

Hon. Marsha Blackburn, a Representative in Congress from the State of 

Tennessee, opening statement ............................................................................ 4 

Hon. Frank Pallone, Jr., a Representative in Congress from the State of 

New Jersey, prepared statement ........................................................................ 31 

Hon. Diana DeGette, a Representative in Congress from the State of Colorado, prepared statement .................................................................................... 33 

Hon. Janice D. Schakowsky, a Representative in Congress from the State 

of Illinois, prepared statement ............................................................................ 34 

WITNESSES

Cynthia Giles, Assistant Administrator, Office of Enforcement and Compliance Assurance, Environmental Protection Agency .......................................... 5 

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

Environmental Protection Agency 1

Prepared statement 2 ........................................................................................ 7 

Answers to submitted questions 3 ................................................................... 123 

SUBMITTED MATERIAL

Subcommittee exhibit binder .................................................................................. 35 

1Ms. McCabe did not offer oral testimony. 

2Ms. Giles and Ms. McCabe submitted a joint prepared statement. 

3Questions for the record were submitted jointly to Ms. Giles and Ms. 

McCabe. 

(1) 

VOLKSWAGEN’S EMISSIONS CHEATING SETTLEMENT: QUESTIONS CONCERNING ZEV 

PROGRAM IMPLEMENTATION 

TUESDAY, DECEMBER 6, 2016 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The subcommittee met, pursuant to call, at 11:04 a.m., in Room 

2322, Rayburn House Office Building, Hon. Tim Murphy (chairman 

of the subcommittee) presiding. 

Members present: Representatives Murphy, Burgess, Blackburn, 

Griffith, Bucshon, Flores, Mullin, Hudson, Collins, DeGette, Tonko, 

and Kennedy. 

Staff present: Grace Appelbe, Staff Assistant; Jennifer Barblan, 

Counsel, Oversight and Investigations; Elena Brennan, Staff Assistant; Blair Ellis, Digital Coordinator/Press Secretary; Charles 

Ingebretson, Chief Counsel, Oversight and Investigations; A.T. 

Johnston, Senior Policy Advisor; Dan Schneider, Press Secretary; 

Peter Spencer, Professional Staff Member, Oversight and Investigations; Rick Kessler, Democratic Senior Advisor and Staff Director, 

Energy and the Environment; Christopher Knauer, Democratic 

Oversight Staff Director; Elizabeth Letter, Democratic Professional 

Staff Member; Miles Lichtman, Democratic Professional Staff Member; Dan Miller, Democratic Staff Assistant; Matt Schumacher, 

Democratic Press Assistant; and Andrew Souvall, Democratic Director of Communications, Outreach, and Member Services. 

OPENING STATEMENT OF HON. TIM MURPHY, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA 

Mr. MURPHY. Good morning. This is the Oversight and Investigations hearing on Volkswagen’s Emissions Cheating Settlement Concerning the ZEV Program Implementation. Here we will hear testimony to address the significant questions the Oversight Subcommittee has about a $2 billion investment program embedded in 

a recently approved partial consent decree to settle numerous 

claims against Volkswagen. 

Just over a year ago, VW admitted to Federal authorities as well 

as this subcommittee that it been thwarting Federal emissions 

tests for years. VW willfully and knowingly cheated, having installed engine software in 480,000 diesel vehicles to defeat emissions tests. This is a clear violation of Federal law. The reasons for 

2 

VW’s nefarious actions are now quite clear. Despite having committed to producing, quote, ‘‘clean diesel,’’ unquote cars, it couldn’t 

meet the Clean Air Act standards without installing the software 

to cheat testing machines, and ultimately hundreds of thousands of 

consumers. 

It is also clear that VW deserved to be held to account for their 

illegal actions, for the harm to consumers, and the environment, 

and this violation of the public trust. In January, the United States 

sued VW for violations under the Clean Air Act. Hundreds of other 

parties brought actions. The cases were consolidated, and settlement talks commenced and eventually reached an agreement. In 

late October, a U.S. District Court approved a $15 billion partial 

consent decree resolving many claims concerning the 2.0 liter engines, and including buyback and modification provisions to address the economic harm to VW customers. 

Yet, a piece of this settlement raises the potential that VW’s penalty for bad behavior may not be entirely without benefit for VW’s 

own future operations. The settlement requires VW to invest a substantial amount of money in infrastructure and education to expand the market for Zero Emission Vehicles, such as plug-in electric cars, coincidentally just as VW was launching a new strategy 

to enter and grow its share in the electric vehicle market. Under 

this so-called ZEV investment commitment to the partial consent 

decree, VW must spend $800 million over the next 10 years into 

infrastructure and market development in California to be overseen 

by the State of California, and $1.2 billion over the same period in 

the rest of the Nation to be overseen by the EPA. This works out to VW having to invest nearly $500 million every 

30 months. To put this in perspective, the total market for U.S. 

electric charging infrastructure, including installation, has been estimated by industry to be up to $800 million over the next 30 

months. So VW has agreed to spend at a rate that would nearly 

double the size of this market. Think about the regulatory and 

oversight considerations if this massive influx of infrastructure investment was Government spending, like a stimulus package. The 

pace and scale of such investment would be of great interest to preexisting market players who would stand either to benefit from an 

enlarged market, or to suffer from public money that would crowd 

out competition. 

In many respects, VW’s mandated investment threatens a similar situation, but the ZEV investment oversight provisions appear 

pretty thin, especially at the Federal level. Most notably, VW will 

apparently have the sole discretion for how it will invest these 

sums in a $1 billion national program overseen by the EPA, creating opportunity for VW to gain an enormous competitive advantage. 

Now, we are not here today to ask EPA to renegotiate the agreement. But now that it is final, we need to understand how it will 

work, how it will affect businesses already in the Zero Emission 

Vehicle marketplace, and what EPA’s role is in administering this 

huge financial commitment. We wish there were more time, but 

EPA must make some decisions, even as we speak. And the big decision on VW’s plan for spending the first $300 million will come 

early next year. It is against this backdrop that we wrote EPA in 

3 

early November, and we asked EPA here today to help us build a 

record on the issues surrounding the ZEV program implementation, and the measures necessary to protect market competition as 

investment plans developed. I’m expecting to hear what EPA’s 

oversight role will be, and given the enormous amount of money to 

be invested, how it will impact the policymaking landscape. 

I also want to hear what actions EPA will make to ensure programs like this do not encroach on congressional interests. 

VW betrayed the public trust with this cheating scandal, and we 

are here this morning to ensure the agencies responsible for developing and agreeing to this deal will ensure the public interest is 

protected. 

[The prepared statement of Mr. Murphy follows:] 

PREPARED STATEMENT OF HON. TIM MURPHY

Today the subcommittee will hear testimony from the Environmental Protection 

Agency to address significant questions the Oversight Subcommittee has about a 

two-billion-dollar investment program embedded in a recently approved partial consent decree to settle numerous claims against Volkswagen. 

Just over a year ago VW admitted to Federal authorities, as well as this subcommittee, it had been thwarting Federal emissions tests for years. VW willfully 

and knowingly cheated, having installed engine software in 480,000 diesel vehicles 

to defeat emissions tests. That is a clear violation of Federal law. 

The reasons for VW’s nefarious actions are now clear: despite having committed 

to producing ‘‘clean diesel’’ cars, it couldn’t meet the Clean Air Act standards without installing the software to cheat testing machines and ultimately hundreds of 

thousands of consumers. 

It is also clear that VW deserved to be held to account for their illegal actions, 

for the harm to consumers and the environment, and this violation of the public 

trust. 

In January, the United States sued VW for violations under the Clean Air Act. 

Hundreds of other parties brought actions, the cases were consolidated and settlement talks commenced and eventually reached an agreement. 

In late October, a U.S. District Court approved a 15-billion-dollar partial consent 

decree resolving many claims concerning the 2.0 liter engines-and including buyback 

and modification provisions to address the economic harm to VW customers. 

Yet a piece of this settlement raises the potential that VW’s penalty for bad behavior may not be entirely without benefit for VW’s own future operations. The settlement requires VW to invest a substantial amount of money in infrastructure and 

education to expand the market for zero emission vehicles, such as plug-in electric 

cars, coincidentally just as VW is launching a new strategy to enter and grow its 

share in the electric vehicle market. 

Under this so-called ZEV investment commitment in the partial consent decree, 

VW must spend $800 million over the next 10 years into infrastructure and market 

development in California, to be overseen by the State of California, and $1.2 billion 

over the same time period in the rest of the Nation, to be overseen by EPA. 

This works out to VW having to invest nearly $500 million every 30 months. To 

put this in perspective, the total market for U.S. electric charging infrastructure (including installation) has been estimated by industry to be up to $800 million over 

the next 30 months. So VW has agreed to spend at a rate that would nearly double 

the size of this market. 

Think about the regulatory and oversight considerations if this massive influx of 

infrastructure investment was Government spending, like a stimulus package. The 

pace and scale of such investment would be of great interest to pre-existing market 

players who would stand either to benefit from an enlarged market or to suffer from 

public money that would crowd out competition. 

In many respects, VW’s mandated investment threatens a similar situation, but 

the ZEV investment oversight provisions appear pretty thin, especially at the Federal level. Most notably, VW will apparently have sole discretion for how it will invest these sums in the billion-dollar national program overseen by EPA—creating 

opportunity for VW to gain an enormous competitive advantage. 

We are not here today to ask EPA to renegotiate the agreement, but now that 

it is final, we need to understand how it will work, how it will affect businesses alVerDate Mar 15 2010 10:12 Jan 23, 2017 Jkt 037690 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 F:\114THCONGRESS\114X177VWSETTLEMENTJKTREQ011917\114X177VWSETTLEMEN
4 

ready in the zero emission vehicle marketplace and what EPA’s role is in administering this huge financial commitment. 

We wish there were more time, but EPA must make some decisions even as we 

speak, and the big decision on VW’s plan for spending the first $300 million will 

come early next year. It is against this backdrop that we wrote EPA in early November and we asked EPA here today to help us build a record on the issues surrounding ZEV program implementation and the measures necessary to protect market competition as investment plans developed. 

I’m expecting to hear what EPA’s oversight role will be, and given the enormous 

amount of money to be invested, how it will impact the policymaking landscape. I 

also want to hear what actions EPA will make to ensure programs like this do not 

encroach on Congressional interests. 

VW betrayed the public trust with its cheating scandal. We are here this morning 

to ensure the agencies responsible for developing and agreeing to this deal will ensure the public interest is protected. 

Mr. MURPHY. Now, we are waiting for the Democrats to come onboard. So is there another Member this side that would like to 

make an opening statement? 

I recognize the vice chair of the committee, Mrs. Blackburn, for 

5 minutes. 

OPENING STATEMENT OF HON. MARSHA BLACKBURN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TENNESSEE 

Mrs. BLACKBURN. I want to thank you all for being here. And as 

the chairman said, we have some questions about EPA and their 

role and their ability to oversee this. And also VW’s participation 

in this. I think one of the things that I want to hear from EPA is 

how active, how passive is this role in monitoring going to be? 

What are your expectations? And then, do you have the necessary 

skill sets in order to do this? 

The second thing I’m going to want to know is about the data 

that is going to be collected when the cars are in these stations. 

Who owns that data? Is it VW? Is it going to be the EPA? Who’s 

going to own this data? And then what are they going to do with 

that data? What are the restrictions on it? Who owns the transfer 

rights? Who is going to hold those transfer rights on this information? So as we get to questions, I will want to discuss that with 

you, because I think that as we look at this expansion and VW rolling out this, I think we need to have a discussion about that component of the data also. 

And, Mr. Chairman, I yield back. 

Mr. MURPHY. Is there anyone on our side that has any other 

opening statements to begin with? 

Seeing none, we will move forward. Let me just mention a couple 

things: 

First of all, I ask unanimous consent that the Members’ written 

opening statements be introduced into the record. And without objection, the documents will be entered into the record. 

I also want to explain the minority is delayed by a caucus meeting. They will be here as soon as they can be. And at that time, 

they will be able to make opening statements. But in the meantime, we will move forward with our panel. 

So let me introduce our two witnesses for today’s hearing, both 

from the U.S. Environmental Protection Agency. First, we have 

Cynthia Giles, Assistant Administrator in the Office of EnforceVerDate Mar 15 2010 10:12 Jan 23, 2017 Jkt 037690 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 F:\114THCONGRESS\114X177VWSETTLEMENTJKTREQ011917\114X177VWSETTLEMEN
5 

ment and Compliance Assurance at the EPA, and Janet McCabe, 

Acting Assistant Administrator in the EPA’s Office of Air and Radiation. Both our witnesses come to us today with extensive experience in environmental service in the public, private, and nonprofit 

sectors. Thank you, Ms. Giles and Ms. McCabe, for being here 

today. And we look forward to hearing from you in this very important matter. 

You’re aware the committee is holding an investigative hearing, 

and when doing so, has the practice of taking testimony under 

oath. And do you have any objections to taking—giving testimony 

under oath? 

Seeing no objections, the Chair would advise you that under the 

rules of the House and rules of the committee, you’re entitled to be 

advised by counsel. Do you desire to be advised by counsel during 

your testimony today? 

And seeing none, then in that case, would you please rise and 

raise your right hand, and I’ll swear you in. 

[Witnesses sworn.] 

Mr. MURPHY. Thank you. You are now under oath and subject to 

the penalties set forth in title 18, section 1001 of the United States 

Code. We’ll have you each gave a 5-minute summary of your written statement—we’re just doing one statement? All right. Ms. 

Giles, you’re recognized for 5 minutes. 

STATEMENTS OF CYNTHIA GILES, ASSISTANT ADMINISTRATOR, OFFICE OF ENFORCEMENT AND COMPLIANCE ASSURANCE, U.S. ENVIRONMENTAL PROTECTION AGENCY, 

AND JANET MCCABE, ACTING ASSISTANT ADMINISTRATOR, 

OFFICE OF AIR AND RADIATION, U.S. ENVIRONMENTAL PROTECTION AGENCY 

STATEMENT OF CYNTHIA GILES 

Ms. GILES. Thank you, Mr. Chairman and distinguished members of the subcommittee. I am Cynthia Giles. I am the Assistant 

Administrator of the Environmental Protection Agency’s Office of 

Enforcement and Compliance Assurance. And I’m joined today by 

Janet McCabe, the Acting Assistant Administrator in the Office of 

Air and Radiation. Thank you for the opportunity to testify about 

the Volkswagen settlement achieved by EPA, the Department of 

Justice, and the California Air Resources Board. 

In close coordination with our partners, EPA achieved a 

groundbreaking settlement using the authority provided to EPA by 

Congress under the Clean Air Act. Our priority from the start was 

to remedy the damage VW caused when it sent half a million cars 

onto our roads emitting harmful pollution far in excess of reasonably achievable, cost-effective Federal standards. These standards 

are in place to protect the air we breathe. And through this settlement, we are upholding these standards and delivering on our obligation under the Clean Air Act to protect public health for all 

Americans. 

In October, the court formally approved the settlement agreement, partially resolving allegations that Volkswagen violated the 

Clean Air Act by the sale of approximately 500,000 vehicles containing 2-liter diesel engines equipped with defeat devices. Through 

6 

three key provisions, the settlement holds Volkswagen accountable 

and puts in place remedies for the violations. VW must offer to buy 

back or fix the violating cars; VW is required to pay $2.7 billion 

into a trust account to fund mitigation projects selected by the 

States; and VW will invest an additional $2 billion to promote the 

development and use of clean vehicle technologies. 

The subcommittee today has asked us to focus on the third element, investment in clean vehicle technology, which is just one 

part of this comprehensive partial settlement. Over the course of 

several years, Volkswagen sold vehicles in the United States that 

it claimed were green, lower-emitting, and clean diesel vehicles. 

Consumers looking to reduce air pollution purchased these vehicles 

on the premise that they were clean. But we now know that, in 

fact, they emit up to 40 times the allowable level of NOx pollution. 

VW’s violations of the Clean Air Act undercut the market for 

truly green vehicles, resulting in illegal pollution and not the cleaner air that was promised. The zero emissions vehicle, or ZEV, investment requirement is a court-ordered remedy intended to address the harm that VW caused by requiring investments to accelerate the growth of clean transportation, and to advance cleaner 

air in America. 

The settlement requires Volkswagen to develop investment plans over a 10-year period, totaling $2 billion nationwide that will increase the necessary ZEV infrastructure, improve access to ZEVs, 

and promote education about ZEVs in the United States. ‘‘ZEV’’ 

means any zero emitting vehicle, including battery electric vehicles, 

fuel cell vehicles, and certain on-road plug-in hybrid electric vehicles. The settlement means more people have opportunities to use 

ZEVs without having to purchase or lease one, for example, 

through car sharing programs. More drivers of electric cars will 

find a charge when they need one. And there will be more brandneutral public outreach efforts across the country about the benefits of ZEVs. 

The agreement also includes strong transparency and accountability measures. VW is explicitly required to solicit and consider 

input from States, municipalities, tribes and other Federal agencies, before it makes ZEV investment decisions. And it must make 

its investment plans available online. 

VW’s ZEV infrastructure investments and its public outreach efforts must be brand neutral, meaning ZEV infrastructure must be 

accessible to all ZEV vehicles utilizing nonproprietary charging 

equipment, and not just the ones VW makes. 

The ZEV investment plan will be updated every 30 months, ensuring that the investments account for changes in ZEV technology 

and the market. And all Federal, State, and local laws will apply 

to Volkswagen as they do to any other company. 

EPA, working with DOJ, will ensure that VW follows the rules, 

that it satisfies the requirements for stakeholder engagement, that 

the investments are truly brand neutral, and that VW complies 

with all the terms of the settlement. 

This settlement ensures that Volkswagen finally delivers on the 

promise it made for cleaner air and a cleaner transportation future. 

Thank you for the opportunity to testify. And we would be happy 

to answer any questions. 

7 

[The prepared joint statement of Ms. Giles and Ms. McCabe follows:] 

8 

9 

10 

11 

12 

Mr. MURPHY. Thank you. I now recognize myself for 5 minutes. 

Ms. Giles—and I apologize for mispronouncing your name—in a 

few words, can you tell me the purpose of the ZEV investment commitment and the NOx mitigation trust in the Volkswagen matter? 

Ms. GILES. Both of those provisions are part of the three-part 

structure to remedy the harm caused by VW’s violations to get the 

pollutant cars off the road, to mitigate the NOx pollution that they 

caused, and to invest in a clean transportation future. 

Mr. MURPHY. Thank you. Now, part of the settlement requires 

Volkswagen to pay $2.7 billion into a NOx mitigation trust. The 

partial consent decree states, and I quote, ‘‘The funding for the eligible mitigation actions provided for herein is intended to fully 

mitigate for total lifetime excess NOx emissions from the 2.0 liter 

subject vehicles where’’—‘‘or will be operated.’’ Now, that sounds 

like to me, when you say fully mitigate total lifetime, that sounds 

like 100 percent. Am I correct on that? 

Ms. GILES. The mitigation trust is part, as I said, of a three-part 

remedy that is designed to address the different types of violations 

that VW had. 

Mr. MURPHY. I understand that. OK. But tell us today the 

amount of the total lifetime excess NOx emissions from these vehicles? 

Ms. GILES. The mitigation trust, as you mentioned, is part of the 

three parts designed to remedy NOx emissions. And it sets up a 

trust that is run by a trustee to approve and oversee the expenditures by States of the funds that are allocated to them. 

Mr. MURPHY. Well, let me come back to that in a second there. 

In your written statement, you talk a lot about how transparent 

the settlement agreement is. But I have a hard time seeing that 

transparency, if we can’t see the basis on which you claim the total 

NOx emissions will be mitigated. Can you give us that? 

Ms. GILES. The only calculations we have done with respect to 

the NOx emissions were done in support of the enforcement case. 

And that enforcement case is not over. We still have the 3-liter vehicles, we have civil penalties, and the ongoing criminal investigation. So your specific question is relevant to those ongoing portions 

of the case and not something we can talk about here. 

Mr. MURPHY. But I’m still having a little trouble. I’m just trying 

to clarify this, that if we take your word that the total environment 

harm is mitigated by the NOx mitigation agreement, what’s the 

purpose of the ZEV investment commitment? 

Ms. GILES. Those two components are designed to address separate harms. The mitigation portion is to make up for the pollution 

caused, and the ZEV portion is to address the fact that they sold 

dirty vehicles claiming they were clean. 

Mr. MURPHY. Is that a penalty? Is that a penalty then? 

Ms. GILES. No, it is not a penalty. These are all part of the injunctive relief in the case. 

Mr. MURPHY. So I’ve accepted there’s a legitimate purpose, then, 

for the ZEV investment commitment. I’m still trying to find how 

I determine what that is. There are conflicting statements coming 

out of EPA and what the role of the ZEV investment commitment 

is, and what authority EPA has to ensure that it meets those goals. 

13 

What does it mean to fully mitigate the total lifetime excess NOx 

emissions? Can you please define that for me? 

Ms. GILES. The NOx reduction provisions of mitigation are one 

part, as I’ve said, of a three-part strategy to address the violations. 

So we’re addressing the cars on the road as one part, the NOx 

emissions from the vehicles as the second part, and the third part 

is to remedy the damage caused to the marketplace. 

Mr. MURPHY. Yes, I hear that part. And those are noble causes. 

I just wonder if there’s some double jeopardy here. So in your November 18 letter to the committee, you wrote, quote, ‘‘The partial 

consent decree does not allow the EPA to substitute its preferences 

for choices made by Volkswagen.’’ So that makes it sound like VW 

can pretty much invest in whatever it wants, which is concerning, 

given that VW has announced that it’s going to have this brandnew business plan for electric vehicles. And a few months ago the 

head of the EPA’s Office of Transportation Air Quality, Chris 

Grundler, was quoted as saying that EPA would have a much larger say in how VW spent the $1.2 billion for ZEV infrastructure. Mr. 

Grundler went on to state, ‘‘We have work to do with the new team 

and with our colleagues at the Transportation and Energy Departments to come up with a collective vision for what infrastructure 

would look like nationally, so we can make an informed decision 

when Volkswagen comes in with their plan that is consistent with 

ours, so that the $2 billion is not wasted.’’ Mr. Grundler also stated 

that he didn’t want all the money to go to fast charging stations, 

and that there should be an emphasis on providing the charging 

station at multi-family dwellings. So which is it? Does the EPA 

have a limited but essential role where you will not be substituting 

your own preferences for Volkswagen, or is the EPA actually going 

to make VW’s plan fit within EPA’s vision of ZEV infrastructure? 

Ms. GILES. The consent decree clearly provides that the decisions 

are made by VW. They are in charge of the investment decisions. 

EPA has a limited but important role to make sure that VW complies with the consent decree. 

Mr. MURPHY. So VW can make their own decisions on how this 

is going to go. I see. Well, we’ll come back to that. 

I now will—my time is up. I now recognize Mrs. Blackburn for 

5 minutes. 

Mrs. BLACKBURN. Thank you. Your answer to the chairman’s 

question makes it sound like VW’s going to have a lot of autonomy 

over this situation. So let’s go to the issue of data, and the data 

that is coming in off of the charging stations. And let’s talk specifically for a minute about who is going to collect it? Who’s going to 

hold it? How are they going to be able to use it? Would VW be able 

to take that data and use it as a marketing plan for their cars? 

Would they be able to take that information and use it to incent 

sales? So talk to me about that data, and then, also, the transfer 

rights that should be accompanying or overriding that data. 

Ms. GILES. Well, there are a couple provisions that are relevant 

to your specific question. One is, as I mentioned briefly before, that 

VW has to comply with all of the laws that any other company in 

this marketplace would comply with. The specific—— 

14 

Mrs. BLACKBURN. Well, let me interject right there. We have no 

laws on the book that apply to transfer rights on data. And we do 

not have a data security law on the book. So go ahead. 

Ms. GILES. As to your specific question about the data, one of the 

essential parts of the transparency that is required by this consent 

decree is that VW is required to collect information about the 

charging stations that it installs, and to make that data available 

to the public as part of the robust transparency that we are building into this consent decree. So that information will be available 

to the public, to competitors, who will have quite a big window into 

VW’s operations. 

Mrs. BLACKBURN. So then what we may want to do is look at 

something regarding timing on collection, and when that data is 

made public, so that they don’t capture and hold that and then release it a year later or 2 years later, that everyone has access at 

the same time. 

Ms. GILES. So the consent decree specifically provides that VW 

has to file annual reports, which are public and posted on the Web, 

that will include the data from the charging stations that they 

have installed. 

Mrs. BLACKBURN. So then, in essence, what you’re telling me is 

for a 365-day period, they will—and they and they alone, will have 

access to that data to manipulate it, to work with it, to advertise 

or to market. But it will be theirs. And then after that period of 

time, it will be made public. So would that be your understanding? 

Ms. GILES. Well, the consent decree provides that they have to 

make that data available to everyone annually. So—— 

Mrs. BLACKBURN. Do you not see a little bit of a concern with 

this if there is no restriction that—see, one of the things that we’ve 

discussed in our communications and technology subcommittee and 

others here is looking at the data security issues and looking at 

who owns the virtual ‘‘you.’’ It’s a part of our privacy debate. It is 

something that encompasses much of what is transpiring in the 

Internet of things. 

And from what I’m hearing from you, it sounds as if you all do 

not have a clear understanding as to who is going to have first the 

right of refusal over that data. Is it the person that owns the vehicle? Is it the—is it Volkswagen, because they’re the ones that are 

manning the stations? Within that 365-day period of time, what 

are the restrictions on them? And what is their ability to use that 

prior to anyone else having access to that? You know, it’s one thing 

to say—and we see this all the time when you look at patents and 

copyrights, you know. And if someone says, ‘‘Well, you know, it’s 

out there in the public domain’’—but, yes, then what did that person do with it before it went to the public domain? So this is Volkswagen taking this data, and then they’re going to have use of it for 

a year, and then at the end of the year, they’re going to make a 

report as to what that data is. But in the meantime, it is theirs. 

So you could look at it and say, ‘‘Wow, $2 billion. That was quite 

a settlement.’’ But look what they bought. 

Ms. GILES. Well, every company in this market operates with a 

lesser degree of transparency than VW will do. VW has to solicit 

input on what this plan contains. Their investments specifically 

have to be brand neutral, and they have to update their plan every 

15 

30 months to account for changes in the marketplace, and they 

have to be very transparent. So they are going to be substantially 

more transparent than other companies in the—— 

Mrs. BLACKBURN. After 365 days. 

I yield back. 

Mr. MURPHY. Thank you. The gentlelady yields back. 

I now recognize Dr. Burgess for 5 minutes. 

Mr. BURGESS. Thank you, Mr. Chairman. And I—this settlement 

that has been crafted and created is—I mean, it’s the first time I’ve 

ever seen anything like this. I mean, the language. The language 

that’s written in the court settlement is some of the most detailed 

and densely technical language that I have ever read. 

Just to carry on with Vice Chairwoman Blackburn’s concerns, if 

I’m reading correctly in appendix C in the settlement that deals 

with the issue of data—yes, I think what the chairwoman is suggesting is very possible, that there would be almost a year’s benefit 

to the company that has been monitoring the activity at their 

charging stations. I don’t even know, does Volkswagen have an 

electric vehicle on the market? 

Ms. GILES. I believe they do. Yes. 

Mr. BURGESS. So they will have almost a year’s advantage on 

anyone else in that market space with their ability to monitor consumer behavior and consumer use of their charging stations. I don’t 

begrudge them that, but that is a fact. And I don’t think, again, 

as I read appendix C of the agreement, I don’t see there’s anything 

to prevent that. And if I were clever, and I have to believe the people at Volkswagen are, because they wouldn’t be in this position if 

they hadn’t been somewhat clever, that they’ll be able to use and 

manipulate that data and use to it to their advantage. I would be 

surprised if they didn’t, in fact. I don’t know if there’s any way that 

that can be dealt with differently, but just as I read appendix C, 

that’s my takeaway. 

Who advised—this is written—this document is produced by the 

Federal district court. Is that correct? 

Ms. GILES. The settlement agreement was written by EPA and 

the California Air Resources Board with VW. 

Mr. BURGESS. So it was your assets that then went into drafting 

this settlement? 

Ms. GILES. That’s correct. 

Mr. BURGESS. So it was people of the United States, essentially, 

who paid for the production of this very detailed document that we 

have in front of us. Is that correct? 

Ms. GILES. As with all EPA enforcement actions, yes. 

Mr. BURGESS. I will confess to being a little bit concerned about 

the characteristics of the directors of that board, although they are 

spelled out of the—I don’t know what you call them, the reviewers 

or the monitors, although it is spelled out in the agreement, and 

that they’re not supposed to have any conflicts, and they’re not 

supposed to go to work for the company within 2 years’ time of having—what enforcement do you have over that? How do you prevent 

someone who says, you know, Volkswagen just cut me a real good 

deal. So I’m leaving the board and I know what it says in print, 

but what—how do you prevent that? What mechanism is at your 

disposal? 

16 

Ms. GILES. Well, we certainly appreciate your careful reading of 

appendix C. That’s great to hear. The independent financial auditor 

in the appendix C agreement that you’ve mentioned does have very 

clearly spelled out independence obligations. And their job as accountants is to look at the information that VW gives them, and 

to attest whether it meets the requirements that are very detailed 

for what counts as credible costs under the agreement. EPA retains, as we do in all our enforcement cases, the ability to make 

the decision of if the company has complied with the consent decree 

or not. 

Mr. BURGESS. Is this settlement—I mean, it seems unique to me. 

But maybe I’m just naive. Is this a standard type of EPA settlement? I mean, do these things happen frequently? 

Ms. GILES. It is very typical for us to have enforcement cases 

where we require the company to fix the pollution problem and to 

redress the harms caused, and that’s what we’ve done in this case. 

Mr. BURGESS. But this creation of $2 billion of electric substation 

charging infrastructure, that seems a little unusual to me. But, 

again, I’ll defer to the EPA on this. It’s not something that I am 

familiar with encountering with 14 years on this subcommittee. 

Ms. GILES. Well, every enforcement remedy is tailored to the 

facts of a particular case. And in this case, as you know, we had 

very egregious violations of the laws that protect clean air in this 

country. This remedy—— 

Mr. BURGESS. Where did this idea originate—from where did it 

originate? Can you tell me that? 

Ms. GILES. That was part of our settlement discussions. 

Mr. BURGESS. But who advised you on that? 

Ms. GILES. Well, I’m not in a position to talk about our settlement discussions, in part, because we have a court order prohibiting me from doing that. 

Mr. BURGESS. At some point will those documents become public? 

Ms. GILES. I don’t know the answer to that question. I can just 

tell you that right now, when the case is ongoing, we’re not in a 

position to discuss the settlement negotiations. 

Mr. BURGESS. So much for transparency. Mr. Chairman, I’ll yield 

back. 

Mr. MURPHY. The gentleman yields back. 

Dr. Bucshon, you’re recognized for 5 minutes. 

Mr. BUCSHON. Mr. Chairman, I don’t have any specific questions. 

Can I yield my time to someone else? 

Mr. MURPHY. Well, next would be Mr. Flores for 5 minutes. 

Mr. FLORES. Mr. Chairman, I’ll pass at this point, and maybe in 

the second round. 

Mr. MURPHY. Thank you. 

Mr. Griffith. 

Mr. GRIFFITH. OK. How many cars—do you know how many cars 

has VW purchased back? 

Ms. GILES. I don’t know the answer to that question. 

Mr. GRIFFITH. Do you know if they’ve purchased any back? 

Ms. GILES. I don’t know. 

Mr. GRIFFITH. Are you all doing anything to see if they’re in compliance with that? 

17 

Ms. GILES. We will be closely monitoring what they are required 

to do. There is no current obligation that cars already have been 

purchased back. 

Mr. GRIFFITH. When—and I was just looking through the court 

order to see if I could find it—when do we expect that process to 

start? And let me say so that I’m not misleading anybody, I’m one 

of the people who gets compensated under this. I’m an owner of a 

Volkswagen diesel, and we filed our work, and I’ve got a constituent who is keeping me advised on their process. They filed all 

of their paperwork. She’s already got her new car picked out and 

just waiting. And so I’m just curious. It’s been closing in on 40 days 

since the court approved the agreement. You all reached an agreement, I think, in August. Court had to approve it. I get that. I’m 

just wondering if anybody’s following up with Volkswagen to see 

that the consumers are, in fact, protected. 

Ms. GILES. Absolutely. So there is a very extensive process set 

up which you probably have been exposed to that was set up by 

the plaintiff steering committee and the FTC and others to figure 

out exactly what the schedule should be for implementing the consumer’s choice of whether they prefer buyback or fix if one is approved. So there is an established process that is being followed. 

Mr. GRIFFITH. All right. If you all would just follow up on that, 

I would greatly appreciate it. 

And then, I have some of the concerns that other folks have 

raised in regard to, you know, how active you all are going to be, 

and is this actually going to end up benefiting Volkswagen. Because while I’ve driven a lot of Volkswagens over the years, certainly don’t condone their bad behavior in this circumstance. And— 

and so just want to make sure that this is all working out the way 

that it was intended to, and whether it’s the data that we’ve heard 

about or whether it’s making sure that they don’t come up with a 

crafty plan that actually rewards them for that bad behavior, it’s 

very important to us. 

Ms. GILES. The consent decree specifically provides, as you probably are aware, that VW’s investments and their outreach must be 

brand neutral. So they have to make that accessible to any car 

with a standard plug, even if it’s not the one that VW cars use. 

And as to your second point, EPA is going to be very active in 

making sure that VW follows the requirements of the consent decree. 

Mr. GRIFFITH. All right. With that, Mr. Chairman, I have no additional questions at this time, and would yield back. 

Mr. MURPHY. Would the gentleman hold for a moment? 

All right. I’ll recognize myself for another 5 minutes, just follow 

up while the other Members are preparing their comments here. 

For Ms. Giles, it remains unclear how VW’s going to fulfill the 

ZEV investment commitment under the terms of the partial consent decree. And nothing prevents VW from obtaining revenue from 

these investments. That’s one of our bottom-line concerns. Can you 

point to some other examples in EPA settlements where—or enforcement actions that permit the party responsible for a violation 

to establish a new business or generate revenue as part of the settlement? Is there other models for this that you have? 

18 

Ms. GILES. Every case has remedies that are uniquely tailored to 

the facts of that particular case. In this case, this is a part of the 

injunctive relief, it is not a penalty, it’s part of the injunctive relief, 

it’s an investment that VW is making in ZEV infrastructure. And 

there is no prohibition on them earning revenues from that investment. 

Mr. MURPHY. Well, do you know if VW does, in fact, intend to 

pursue any revenue regeneration from these investments? Has that 

been part of your discussion? 

Ms. GILES. I don’t know the answer to that question. It will be 

a decision that the company makes. I would say that some of the 

comments that we have heard from other companies in this business seem to be encouraging that VW should be making revenues 

from these investments. 

Mr. MURPHY. So it would seem to me that would be part of the 

discussion, that if someone is being penalized but that penalty is 

going to allow them to actually make money, that would seem to 

be a bit of a contradiction and part of a discussion you might want 

to have with them. 

Ms. GILES. We would certainly agree if this were a penalty. This 

is not a penalty. This is part of the injunctive relief. The penalty 

portion of the case is still underway. 

Mr. MURPHY. So—and I understand you can’t discuss all those 

things, but just clarify for me. If there is a penalty, will that—is 

one of the options a fine? 

Ms. GILES. Yes. That—yes. It is. 

Mr. MURPHY. And where will that money go if there’s a fine? 

Ms. GILES. It goes to the Treasury. 

Mr. MURPHY. Does it go to the EPA? 

Ms. GILES. No, it does not. 

Mr. MURPHY. So you have no say-so at all on how that money 

is spent? 

Ms. GILES. The money goes to the Treasury. 

Mr. MURPHY. OK. And now some have suggested this could also 

have a negative or anticompetitive effect on the existing ZEV infrastructure. Do you agree? 

Ms. GILES. We’ve heard a variety of opinions. Some of the people 

who are active in ZEV infrastructure think this is going to be a 

boon for this industry. Some are concerned about what the impacts 

could be. We have worked hard at trying to put sidebars on VW’s 

investments here so that we will do as best we can to help preserve 

a fair and neutral market. So input from other people into what 

VW’s plan should be, their requirement to be brand neutral, the requirement that it be updated, and the many provisions for public 

transparency and accountability that the agreement contains. 

Mr. MURPHY. And I myself have seen some things from one company called EVgo that thinks it might be beneficial. Another one 

called ChargePoint thinks that it could be an antitrust issue. And 

so we will have to continue and follow up with those. 

Ms. McCabe, by most assessments, the ZEV infrastructure investments under the terms of the partial consent decree will most 

likely be into electric vehicle infrastructure such as charging stations. Do you agree that’s the most likely thing, the charging stations? 

19 

Ms. MCCABE. We expect that to be significant. 

Mr. MURPHY. Is the Office of Transportation and Air Quality 

aware of the size of the electric vehicle charging market? Can you 

tell us what that is? 

Ms. MCCABE. I don’t have a specific number for you, Congressman. But there’s clearly a lot of interested inquiry in this from 

Members of Congress themselves about it. And we’ve got a big 

country here with a lot of people to serve. 

Mr. MURPHY. Right. If you could get us that information, because 

I’m sure that would be of interest to this committee, to you as well, 

as understanding what that market is and the development of that 

and how this infrastructure investment might actually directly influence that. 

Ms. McCabe, according to an industry filing with the court in the 

partial consent decree, the market over the next 90 months for installation, operation is approximately $800 million. You heard us 

say that. Do you think this is in the ballpark of the market size, 

$800 million? 

Ms. MCCABE. I really wouldn’t want to opine on that, Congressman. But we’ll provide you answers in follow-up. 

Mr. MURPHY. OK. Thank you. 

And to both of you, last week the California Air Resources Board, 

called CARB, held a public input workshop regarding implementation of California’s allocation of the ZEV investment commitment. 

Does the EPA intend to conduct a similar public outreach? 

Ms. GILES. VW is required to solicit public outreach. And you 

may have seen that VW put out a notice, I think earlier this week, 

saying that it intends to update the public on what the opportunities for public input are going to be. 

Mr. MURPHY. I understand. But will EPA conduct this outreach 

as well? 

Ms. GILES. The consent decree puts that obligation on VW. 

Mr. MURPHY. Will you have any kind of a role in that as well 

in how that data’s collected, collated, responded to? Will you be 

there at the table in any way, or you’ll wait for their report? 

Ms. GILES. VW’s obligations under the consent decree are to conduct that outreach in accordance with a public outreach obligation. 

And we’re going to make sure, through our oversight of the consent 

decree implementation, that they do comply with those obligations 

to conduct public outreach and to consider that in the development 

of their plan. 

Mr. MURPHY. Thank you. Thank you. I’m out of time. 

Mr. Kennedy, are you ready for questions? 

Mr. KENNEDY. Yes. 

Mr. MURPHY. I’ll recognize you for 5 minutes. 

Mr. KENNEDY. I appreciate that, Dr. Murphy. Thank you. 

Ms. Giles, I understand that the Zero Emission Vehicles provisions of this settlement were designed to remedy some of the adverse environmental effects of VW vehicles emitting excess pollutants into the atmosphere. Is that correct? 

Ms. GILES. Yes. 

Mr. KENNEDY. So the ZEV provision mitigates these harmful environmental effects by encouraging the development of clean technology. Is that right? 

20 

Ms. GILES. That’s correct. 

Mr. KENNEDY. And a district court approved the settlement and 

said that it was substantively fair and would, quote, ‘‘further the 

purpose of the Clean Air Act.’’ Is that right? 

Ms. GILES. That’s right. 

Mr. KENNEDY. OK. So, Ms. Giles, EPA responded to Chairman 

Upton’s request for more information on the settlement agreement 

in a November 18 letter. EPA’s response explains, quote, ‘‘The Zero 

Emission Vehicle investment requirement is not a Government program and is not an argument for any Government program. It is 

a remedy obtained from a Federal judge by DOJ on behalf of the 

EPA that partially resolves an enforcement of the case,’’ end quote. 

So can you explain why this is not a Government program, or what 

it means that it does not, quote, ‘‘augment any Government program’’? 

Ms. GILES. So under the consent decree, it is VW’s decision 

where and how to implement the investment for ZEV infrastructure. But they must do so within boundaries laid out by the consent decree. So EPA has a very limited role. We are not the deciders on the investment infrastructure. But we are going to oversee 

VW’s conduct here to make sure that they fully and completely 

comply with the consent decree. 

Mr. KENNEDY. And my understanding, Ms. Giles, is that those in 

the Zero Emission Vehicle industry are divided on this aspect of 

the settlement. Some feel like additional investment in the ZEV industry is welcome, and others fear that VW will be able to unfairly 

influence the market. Has EPA heard some of those reactions? And 

what’s your response to those questions? 

Ms. GILES. We have heard from a wide variety of people with 

opinions about this aspect of the consent decree. I would say one 

thing that all of the commenters have agreed on is that investment 

in ZEV infrastructure is important and needed. They—I would say 

the other thing that is common to all the people we have heard 

from is that they each believe they have the best answer as to what 

VW should do for the ZEV investments. And we certainly encourage them to take advantage of the opportunity that they will have 

to provide those points of view to VW through the outreach effort. 

And I would say lastly, some of the folks we had heard from 

about these investments have taken the view that these additional 

investments will help everyone. As one commenter put it, a rising 

tide floats all boats. 

Mr. KENNEDY. Right. Thank you for that. 

You note that in your November 18 letter to Chairman Upton 

that VW remains subject to all Federal and State laws regarding 

competitive behavior. I believe you say in your letter, quote ‘‘If, in 

the course of making ZEV investments, Volkswagen unlawfully undermines competition in the market, it will be subject to enforcement under antitrust or other competition laws by appropriate 

State and Federal authorities responsible for overseeing such 

laws.’’ So do I understand this to mean, Ms. Giles, that there are 

existing constraints outside the settlement agreement that prevent 

VW from engaging in an anticompetitive process? 

Ms. GILES. So the consent decree does provide that VW has to 

comply with all laws, Federal, State, and local, including laws 

21 

about anticompetitive behavior. So if they engage in any such unlawful behavior, they would be subject to—held to account, in the 

same way any other company can. 

Mr. KENNEDY. And what tools or mechanisms are in place to 

keep VW from pursuing unfair competitive practices when it comes 

to meeting those Zero Emission Vehicle obligations? 

Ms. GILES. Well, among other things, we have put a number of 

requirements in the consent decree: that their investments need to 

be brand neutral, and that their outreach must also be, and that 

they consider input, and they have an unprecedented level, really, 

of transparency of information that they are going to be required 

to provide to the public. 

Mr. KENNEDY. Great. Thank you very much. 

And I yield back. 

Mr. MURPHY. Thank you. 

I recognize Dr. Burgess for a second round, 5 minutes. 

Mr. BURGESS. Thank you, Mr. Chairman. I just have a brief follow-up. 

I was able not to find in the settlement agreement, perhaps you 

can help me. Is there any stipulation or specificity as to where the 

power is purchased from that runs the charging station? 

Ms. GILES. No, there is not. That is part of VW’s investment decision. 

Mr. BURGESS. So different parts of country, there will be different availability of nuclear power, wind power, solar power. But 

the vast majority of it is going to be coal power. Is that correct? 

Ms. GILES. Whatever the power source is in the areas that 

they’re installing the infrastructure. 

Mr. BURGESS. Does the EPA have a general sense as to—assuming that the bulk of this power is generated from a coal—is purchased from a coal generation plant, what is the impact of that coal 

that is burned to produce the power to charge the vehicles? I mean, 

is there some correlation with—I don’t even know how much it 

takes to charge a vehicle. So have you all done any study on this? 

Do you have a sense of what are the power requirements to charge 

one of these? 

Ms. GILES. Well, VW’s going to be looking into that as part of 

their business investment, just like every other participant in the 

vehicle infrastructure market. So they will take advantage of the 

power that’s available, and they’ll make decisions about where 

those infrastructure investments best belong. 

Mr. BURGESS. Well, but I assume that the EPA has had some experience with this. I mean, you guys have worked on this for a long 

time. Is there—is there a sense—I mean, we talk about an electric 

vehicle as being a Zero Emission Vehicle. Some emissions are encountered in the generation of the power, again, unless it’s nuclear 

or solar or wind. But some emissions are encountered with the generation of the power. Do we have an idea of what the tradeoff is? 

Ms. GILES. Well, this enforcement settlement is about motor vehicles. The whole question of power generation is a different topic 

not covered under this consent decree. 

Mr. BURGESS. OK. I can see I’m not going to get an answer. And, 

of course, this will probably come—this would be part of the— 

whatever the penalty phase is. But what is the cost per microliter 

22 

of NOx that you would appropriately put into the environment? 

Does the EPA have a sense of that as what is the appropriate return for the penalty that’s encountered, or the infraction that’s encountered? 

Ms. GILES. There’s a variety of factors laid out in the statute 

about what goes into determining what’s an appropriate penalty. 

And that includes the seriousness of the violation, the egregiousness of the behavior, and many other factors as laid out in the— 

in the law. 

Mr. BURGESS. Are there many metrics that you can share with 

us as far as estimates? I don’t know even know what the unit is 

for nitrous oxide released into the environment. Is it microliters per 

day? Or is it micrograms or nanograms? I don’t even know what 

it is. Can you share that with us? 

Ms. GILES. The amount of pollution is one factor, but it’s only one 

factor that goes into the calculation of a penalty. 

Mr. BURGESS. But do you know that information, I guess, is what 

I’m asking you? 

Ms. GILES. The only calculations that I mentioned before are the 

only calculations we’ve done with respect to the amount of NOx has 

been as part of our enforcement action, which is still ongoing, and 

which is relevant, as we just were discussing, to the calculation of 

penalty, and that matter is still ongoing. 

Mr. BURGESS. But antecedent to this event, had EPA done—I 

mean, presumably you have done work—I mean, we’ve been concerned about NOx for a long time. So presumably you’ve done work 

on how much is generated, how much was generated from cars 15 

years ago, what are the improvements that have been made. Can 

you share any of that data with the subcommittee? 

Ms. MCCABE. I’ll take that one, Congressman. Certainly over the 

years, and in doing our clean air work and working with the 

States, we do lots of estimations and modeling to assess impacts 

and emissions from motor vehicles and from other sources of pollution, and we develop inventories over time that show improvements 

from various sectors of the economy—— 

Mr. BURGESS. I don’t disagree with the improvement. I would 

stipulate that is a fact. But have we drilled down on the metrics 

on just what are the—and, again, I don’t even know the units that 

you all talk about. Is it microliters or is it nanoliters? What is the 

metric that was used? 

Ms. MCCABE. Generally, parts per billion or micrograms per 

cubic meter when we’re talking about air pollution. NOx is an important pollutant because it’s a precursor to ozone, which is measured in parts per billion, or to PM2.5 fine particles as measured in 

micrograms per cubic meter. And so we do have lots of information 

about those trends over time and would be happy to answer specific questions about that. 

Mr. BURGESS. All right. Thank you, Mr. Chairman. I’ll yield 

back. 

Mr. MURPHY. Yes, I appreciate your line of questioning because 

we’re just scratching our heads. So if someone has a violation of 

their individual car, and they’re caught by the local law enforcement or the State, and says, ‘‘Well, we know you violated the law. 

We’re going to let you choose your penalty, and let us know when 

23 

it’s done. And by the way, you can supervise yourself. And it’s OK 

if you open up a store and make money on the whole thing.’’ It just 

doesn’t make sense to us. 

Dr. Bucshon, you’re recognized for 5 minutes. 

Mr. BUCSHON. Thank you. Dr. Burgess, in the State of Indiana, 

80 to 85 percent of electrical power is generated from coal, so when 

you plug in your electric car in Indiana, you have to take that into 

consideration. 

Ms. McCabe, Ms. Giles’ response to the committee’s November 1 

letter on the ZEV investment, she highlighted the stakeholder outreach VW’s required to conduct under the terms of the partial consent decree has a means for ensuring transparency and accountability in VW’s investment decisions. The response stated, and I 

quote, ‘‘EPA intends to ensure Volkswagen conduct a robust process for public input and accept comment from relevant stakeholders 

before decisions are made. However, under the terms of the partial 

consent decree, VW is only required to seek input from States, municipal governments, federally recognized Indian tribes, and Federal agencies. And is under no obligation to act upon the suggestions it receives in the course of this outreach.’’ So the question is: 

Are States, municipal governments, Indian tribes, and Federal 

agencies the only stakeholders relevant to EV infrastructure investments? 

Ms. MCCABE. No. And VW, I believe, is conducting very broad 

outreach. They’re making it broadly available so that any and all 

parties have the opportunity to weigh in. 

Mr. BUCSHON. OK. Does the EPA expect VW to conduct outreach 

or accept input from, as you just said, other interested parties, 

even if they’re not specifically required to under the terms of the 

partial consent decree? I guess you just answered that question. If 

so, how does the EPA intend to enforce this if your role is limited 

to determining whether the company satisfied the requirements of 

the partial consent decree? 

Ms. GILES. So I believe VW has recently announced their plan to 

make the input available to all who are interested to comment. So 

we are expecting that is what VW will do. 

Mr. BUCSHON. OK. And if VW is not required to act on the comments received from the stakeholders, how does this stakeholder 

outreach provide any accountability? I mean, if people can comment but there’s—it doesn’t make any difference, I mean, it’s fluffiness, right, that they took comments but they really don’t have to— 

don’t have to act on them or consider them, really. 

Ms. GILES. Well, the consent decree actually does say that not 

only do they have to solicit comment, but they have to consider it, 

and they have to describe in their plan how they considered the 

input. 

Mr. BUCSHON. OK. Thank you. 

I yield back. 

Mr. MURPHY. The gentleman yields back. 

I now recognize the ranking member of the committee, Ms. 

DeGette. 

Ms. DEGETTE. Thank you, Mr. Chairman. And thank you very 

much for your comity. The Democrats were all in a meeting with 

Vice President Biden this morning. And as often happens with the 

24 

Vice President, he was extremely late. His excuse was that he was 

in a meeting with the President. So—— 

Mr. MURPHY. If I had a dime for every time I heard that. 

Ms. DEGETTE. I know. We were forced to accept it. So thank you 

very much, and thanks to our witnesses. 

I’ll ask unanimous consent to put my opening statement into the 

record. 

Mr. MURPHY. Without objection. 

[The prepared statement of Ms. DeGette appears at the conclusion of the hearing.] 

Ms. DEGETTE. And I also do have a few questions. I think we 

need to really put today’s hearing into context. Let’s remind ourselves that what VW did that necessitated legal action, and what 

the overall settlement was intended to accomplish. 

Ms. Giles, last year, it was discovered that VW installed defeat 

devices in various models that were emitting up to 40 times the 

NOx levels allowed by law. Is that correct? 

Ms. GILES. That’s correct. 

Ms. DEGETTE. And also, there were about half a million of these 

vehicles that were outfitted with these defeat devices, many of 

which are still on the road today. Is that correct? 

Ms. GILES. That’s right. 

Ms. DEGETTE. Now NOx, one of the reasons why we regulated 

it is, it’s a harmful pollutant to human health. Is that correct? 

Ms. GILES. Yes. 

Ms. DEGETTE. And, Ms. McCabe, you’re nodding also. 

Ms. MCCABE. Yes. 

Ms. DEGETTE. So here’s my understanding of the partial settlement with VW. After discovering this massive cheating scheme, the 

Obama administration brought multiple parties to the table, including VW, the State of California, and the Federal Government, 

and they reached a partial settlement. This was approved by the 

Federal judge in October, and it will result in VW spending nearly 

$15 billion over the next decade. So I want to go through some of 

the key components of this agreement. 

Ms. Giles, the settlement requires that VW remove from commerce or modify at least 85 percent of the 2.0-liter vehicles that are 

still polluting the air. Is that correct? 

Ms. GILES. That’s right. VW is required to offer all the consumers buyback or a fix, if one is approved, and damages for consumer harm. 

Ms. DEGETTE. And that part of the settlement which is designed 

to get the cars off the road and also to make consumers whole, 

that’s the bulk of the deal. But that’s going to cost about $10 billion 

to VW to accomplish that, correct? 

Ms. GILES. That’s the estimated amount, yes. 

Ms. DEGETTE. And the other provisions of the settlement are intended to try to reverse the damage these vehicles caused to the 

environment. One provision mandates that VW spend nearly $2.7 

billion to fund a mitigation trust fund to mitigate the excess air 

pollution from the 2-liter vehicles. And the other remaining part of 

the settlement requires that VW invest $2 billion into Zero Emission Vehicles. Is that correct, Ms. Giles? 

Ms. GILES. That’s right. 

25 

Ms. DEGETTE. So the bulk of the settlement is either dedicated 

to fixing or replacing the cars, to stop the ongoing harm, and then 

about a third of the settlement is designed to mitigate or reverse 

the damage that these vehicles have already caused, or will continue to cause. That’s the crux of the agreement. Is that right? 

Ms. GILES. Yes. It is. 

Ms. DEGETTE. That seems pretty reasonable to me. 

And, Mr. Chairman, I’m really happy that you’re having this 

hearing, because I think we should have meaningful oversight to 

ensure that VW adheres to the terms of the settlement. I’ve got to 

say, you know this, Mr. Chairman, but when this first broke, I 

went out to one of my local dealerships in Denver. And I looked at 

these cars and I saw the—I mean, I’m no mechanic, but I saw what 

the situation looked like, and I was dubious at that time about 

what, if anything, could be done both to mitigate the harm to the 

consumers, and also to mitigate the damage to the environment. 

So I think this is a pretty good compromise. And we should—we 

should continue to oversee this to make sure that both that the 

consumers are made whole and that the environment is protected. 

I think this is probably our last hearing in this Congress, Mr. 

Chairman. And I just want to say we’ve had a lot of productive conversations, particularly among our mental health hearings that we 

had earlier in this Congress. And I know we worked together, 

sometimes in a little more contentious way than others. But in the 

end, we were able to work on that mental health bill that became 

part of 21st Century Cures. And I just want to thank you for your 

chairmanship. I don’t know what you’re going to be doing in the 

next Congress. But I’ve enjoyed, and I’ve also—I know my Members aren’t here, but we have the A team over here on this side of 

the aisle, and we’ve had a good session. So thank you, Mr. Chairman. I yield back. 

Mr. MURPHY. Thank you for your comments. I also want to say 

that the work you and Chairman Upton did on the 21st Century 

Cures is remarkable but predictable in terms of dedication that 

took place and the bipartisan work in this full committee that both 

the mental health bill and that bill came through this committee 

unanimous. And we’re going to see the Senate vote on it tonight. 

And I think we’ll see a strong vote there and on to the President’s 

desk. It’s going to make a big difference. And a lot of that stemmed 

out of the work of this subcommittee. So I thank you for your great 

work. 

Mr. Flores, you’re recognized for 5 minutes. 

Mr. FLORES. Thank you, Mr. Chairman. 

Ms. Giles, Ms. McCabe, you’ve talked anecdotally about the comments of the other parts of the ZEV industry with respect to the 

ZEV investment by VW. What detailed analysis did the EPA do to 

take a market that’s just starting, and then to jam $2.7 billion into 

it. What detailed analysis did the EPA do to see what impact that 

would have on the market? 

Ms. GILES. So you’re referring to the ZEV investment? 

Mr. FLORES. Correct. 

Ms. GILES. So the $2 billion ZEV investment, what we have 

heard from other people that are in this market—— 

Mr. FLORES. What detailed analysis did you do? 

26 

Ms. GILES. We did not do a detailed—— 

Mr. FLORES. OK. That’s fine. You didn’t do a detailed analysis. 

Ms. GILES. Our purpose—— 

Mr. FLORES. So my question is this: Does it make sense to rigorously study this important question before requiring a defendant 

accused of cheating customers and the U.S. Government to flood a 

growing market with $2 billion of capital? 

Ms. GILES. So we—as you are aware, we put a number of provisions in this consent decree that are designed to put sidebars on 

VW’s behavior—— 

Mr. FLORES. No, that’s not the question. The question is: Doesn’t 

it make sense to do some sort of detailed analysis on the market 

that you’re getting ready to impact? Does it or does it not? 

Ms. GILES. We think that it makes sense to have VW, who is a 

player in this market, to make investment decisions consistent—— 

Mr. FLORES. So the cheating company gets to make all the investment decisions, and the EPA says, Oh, well, we got some anecdotal evidence. We didn’t do any detailed study. We’re going to just 

impose this on the market and just hope it turns out OK. Hope 

that VW does it a good way. 

Ms. GILES. That is not how we perceived it. 

Mr. FLORES. Well, that’s the way the American people are going 

to perceive it. 

All right. Moving on, EPA is currently conducting midterm evaluation on the fuel economy and emission standards for light duty 

vehicles. These so-called CAFE and GHG standards require annual 

increases in fuel efficiency reaching 54.5 miles per gallon by 2025. 

A nearly doubling over current fuel efficiency. At a September 

hearing before this committee, you informed us that these standards could be met without a substantial increase in the electrification of the Nation’s vehicle fleet. Is that correct? 

Ms. MCCABE. Yes. I did. 

Mr. FLORES. OK. Just last week your agency issued its proposed 

conclusions to its midterm evaluation of these standards. And in it, 

your agency essentially says that automakers are on track to meet 

the greenhouse gas standards, and that no relaxation of targets in 

the outyears is necessary. Is that also correct? 

Ms. MCCABE. That’s correct. 

Mr. FLORES. OK. So if the EPA believes that greenhouse gas 

standards for vehicles can be met without more electric vehicles, 

then what is the purpose of the electric vehicle provisions in the 

VW settlement? 

Ms. MCCABE. Well, the greenhouse gas standards and the fuel 

economy standards set in 2012, projected out until 2025, are reasonably affordable and—— 

Mr. FLORES. Yes. We all got that. 

Ms. MCCABE. OK. That doesn’t mean that that’s all and everything that the transportation sector or that the automotive industry intends to do. And there’s a great desire, both in the automotive 

industry, and in places like California and other places around the 

country, for increasing technology innovations in the electric vehicle space and other zero emitting vehicles. And so it’s entirely appropriate for those activities and those technologies to continue to 

develop, even if they may well go beyond—— 

27 

Mr. FLORES. OK. All right. 

Ms. MCCABE [continuing]. The reductions achieved by the 2012 

rule. 

Mr. FLORES. And so EPA stated in that same September hearing 

that automakers are meeting all standards—meeting standards 

and will continue to meet them thanks to efficiency improvements 

and conventional internal combustion engines vehicles. And they 

expect these improvements to continue. Yet the VW settlement 

clearly forces VW in the direction of investments in electrification. 

So is there a risk that the agency is simultaneously pushing automakers in two directions at once, and that splitting company resources between the internal combustion engine efficiency improvements and electrification investments may not be the best longterm strategy? 

Ms. MCCABE. I don’t see that this puts the automakers in a difficult position at all. They’re moving forward with advanced gasoline engines. They’re moving forward with investments in electric 

vehicles. And the market wants both of those. 

Mr. FLORES. OK. Thank you, Mr. Chairman. I yield back. 

Mr. MURPHY. The gentlemen yields back. I now recognize Mr. 

Tonko for 5 minutes. 

Mr. TONKO. Thank you, Mr. Chair. 

And welcome to our guests, and thank you for your good work. 

As you know, VW was accused of installing cheating software on 

more than half a million of its vehicles. This has resulted in harms 

to both the environment and consumers in upstate New York and, 

indeed, across the country. Owners of VW’s noncompliant vehicles 

are now stuck with cars they believed to be clean diesel, or loweremitting vehicles. Now these consumers’ vehicles have to be modified or taken off the road altogether. The rest of the public has also 

been harmed by the excessive pollutants these vehicles put into the 

air. 

Ms. Giles, Appendix D of the partial settlement requires VW to 

establish a $2.7 billion environmental mitigation trust fund, which 

will be administered by an independent trustee. Is that correct? 

Ms. GILES. That is correct. 

Mr. TONKO. Ms. Giles, the EPA has stated that the purpose of 

this fund is to support actions that will replace certain diesel emission sources with cleaner technology. This will reduce excess NOx 

emissions by the violating 2.0-liter cars. 

So, Ms. Giles, can you give us more information on the reasoning 

behind this mitigation trust fund? 

Ms. GILES. Yes. The mitigation trust fund was set up, as you 

mentioned, for the purpose of reducing NOx emissions in the future, and it will—it sets up a fund that is administered by a trustee, and allocates funds to individual States for them to make decisions about what types of pollution reductions make sense for their 

State. 

So they will apply to the trustee for funding on a public process 

with a lot of transparency, and the trustee will make the decision. 

Mr. TONKO. So, in your opinion, is there a greater value that 

these environmental mitigation projects have than simply having 

VW write a large check to the U.S. Treasury? 

28 

Ms. GILES. Absolutely. So the purpose of mitigation is to make 

up for the pollution that they caused by their violations. And we 

think the mitigation trust, combined with the provisions for ZEV 

and the provisions for remediating the cars and getting the polluting cars off the road, will achieve that objective. 

Mr. TONKO. I understand that all 50 States, the District of Columbia, Puerto Rico, and federally recognized tribes, can potentially qualify for mitigation projects. Is that correct? 

Ms. GILES. That is correct. They have the election, whether they 

wish to participate or not. 

Mr. TONKO. OK. Thank you. And, Ms. Giles, each participating 

beneficiary will receive an allocation of funds from that total, $2.7 

billion, based on the number of registered illegal VW vehicles within the boundaries of the beneficiary. Is that correct? 

Ms. GILES. That is correct. And so in the case of New York, that’s 

about $117 million. 

Mr. TONKO. So a State like New York then would be—which is 

likely more impacted by noncompliant vehicles than a small State, 

would receive more money. Is that correct? 

Ms. GILES. The money is, as you said, roughly allocated based on 

where the unlawful vehicles are registered. 

Mr. TONKO. And, Ms. McCabe, I understand that possible mitigation projects could include, for example, efforts to reduce heavyduty diesel sources near population centers, or even heavy-polluting school and transit buses. Is that correct? 

Ms. MCCABE. That is correct. 

Mr. TONKO. OK. And what other projects might we expect to see 

qualify for some of these moneys? 

Ms. MCCABE. Well, the document lays it out very specifically, so 

that this will be straightforward for the States to implement and 

for the trustee to oversee. So projects such as school buses, heavyduty vehicles, equipment in ports that emit large amounts of NOx, 

these are very common sorts of equipment that can take a lot of 

resources to replace or retrofit. So these will have tremendous benefits in terms of reducing NOx. 

Mr. TONKO. And to either of you, when can States begin applying 

for this money and what is that process going to look like? 

Ms. GILES. As soon as the trustee is selected and the trust documents are finalized, the beneficiaries can register. And then there’s 

a process laid out in the consent decree to begin applying for funding. 

Ms. MCCABE. And, Congressman, if I might add—— 

Mr. TONKO. Sure. 

Ms. MCCABE [continuing]. We’ve been doing a fair amount of outreach to our State partners, so that they understand and can ask 

all the questions that they might have about the process, so they 

don’t miss any opportunities and they’re ready. 

Mr. TONKO. Have you had any interaction, any feedback from the 

States, or any of the beneficiaries in terms of the process you’re 

doing, you’re incorporating? 

Ms. GILES. Yes. States have been very supportive of the amount 

of information we’re providing and the ability to ask questions and 

to fully understand what their opportunities are. 

29 

Mr. TONKO. And, Ms. Giles, earlier you were asked about conducting analyses as a prerequisite to dealing with this issue, and 

I got the sense you had more to share with us. 

Ms. GILES. I did. So our intention on this was to put boundaries 

around what the behavior is that VW can engage in as part of the 

ZEV investment, so that we do protect the market. So the requirement to solicit input, the requirement to be very transparent, to 

collect and make data available, to be brand-neutral, to update the 

plan, all of these requirements are going to be constraints on VW; 

and EPA is going to be watching very closely to make sure that VW 

does comply with all of those requirements. 

Mr. TONKO. Well, let me conclude by thanking EPA and this administration for its outstanding work to bring this matter to a conclusion, and make both the public and the environment whole. 

And with that, Mr. Chair, I yield back. 

Mr. MURPHY. Thank you. The gentleman yields back. 

I recognize the gentleman from Oklahoma, Mr. Mullin, for 5 minutes. 

Mr. MULLIN. Thank you, Mr. Chairman. 

And thank you both for being here. Obviously, we wish neither 

one of you guys had to be here with Volkswagen, and we understand the circumstances we’re in. But, obviously, we’re here to discuss, you know, about the penalties that are being assessed, and 

how they’re being assessed. And I don’t know which one wants to 

take the answer, so I’ll just kind of ask it. 

The authority to assess the ZEV, I guess—is that how we’re pronouncing it?—penalty was based, according to you-all’s testimony 

about the Clean Air Act, that you guys had the authority to assess 

it through the Clean Air Act. Is that correct? 

Ms. GILES. That’s correct. But let me just clarify. It’s not a penalty. What we have done under this partial consent decree is to 

fashion a remedy for the harms caused by VW’s violations of the 

Clean Air Act. 

Mr. MULLIN. So that would be considered a fine? 

Ms. GILES. No. The penalty portion of the case is not yet completed. All that has been done so far is what we call the injunctive 

relief. So what does the company have to do to address the cars on 

the road and to compensate for the harms and pollution it caused 

through its violations? 

Mr. MULLIN. So I guess the question that I have then is, where 

does that authority come from through the Clean Air Act? I mean, 

that’s kind of a broad explanation that you get the authority 

through the Clean Air Act. I guess, I’m kind of curious of how Congress has delegated you to do that through the Clean Air Act? 

Ms. GILES. So the Clean Air Act lays out specific requirements, 

and EPA is tasked with enforcing. 

Mr. MULLIN. What are those specific requirements? 

Ms. GILES. Requirements to meet the standards that are set 

forth for cleaner cars in this particular instance. 

Mr. MULLIN. But I mean where—I get that, but where does it 

give you authority to have such a massive penalty or fine, or whatever you want to call it, to VW? I’m not saying they’re in the right 

or the wrong. I’m not defending VW’s actions. I’m just concerned 

here that the EPA is maybe reaching a little far underneath the 

30 

powers that were delegated to you by Congress, and I just—I don’t 

want to use a broad sweep here, and I’m really trying to understand where you’re coming from. 

And, by no means, think that I’m trying to ask you a got-you 

question or anything. I really am—under what I’ve read, the letter 

that you responded back to this committee, it was very vague, and 

I’m not understanding exactly still yet where you come up with the 

authority to be able to assess whatever you want to call this. But 

either way, it’s a fine or it’s a penalty, because it’s to remedy their 

emissions that they lied about, and it’s somehow supposed to offset 

that, according to your letter. 

Ms. GILES. Well, the DOJ filed a complaint on our behalf, which 

lays out the violations of the Clean Air Act that VW committed by 

its conduct in this matter. And the Clean Air Act also gives EPA 

the authority to take enforcement actions to remedy violations of 

the Clean Air Act, and that’s what we’ve done here. 

Mr. MULLIN. But through the ZEV Act, to say that you have a 

$2 billion deal where they’re supposed to invest in infrastructure, 

and then a $2 billion fine that was supposed to equally offset—according to the provisions of the settlement, that’s intended to address the adverse effects of VW’s violation on the quality by supporting the technologies that are actually clean. The first $2 billion 

was supposed to fully offset those emissions. 

The second $2 billion for the infrastructure investment, what is 

that offsetting? 

Ms. GILES. So the settlement contains three elements to remedy 

the violations of VW here: First is getting illegal cars off the road; 

the second is making up for the pollution they caused; and the 

third is to invest in clean vehicle technology to address the harms 

from selling dirty vehicles, claiming they were clean. 

Mr. MULLIN. That third one is the one that I’m having a problem 

understanding. Where did we delegate you the authority to say 

that they have to invest in that technology? 

Ms. GILES. The authority is to enforce the terms of the Clean Air 

Act and to fashion remedies that address violations. 

Mr. MULLIN. That is without question. But to say that the $2 billion is supposed to invest in technology is specifically what you 

said. The third was to invest in technologies. Where does the Clean 

Air Act give you authority to force a company to invest in clean 

technology? I don’t think you find that in the Clean Air Act. 

Ms. GILES. What the Clean Air Act does is gives us authority to 

fashion remedies to fit the circumstances of each individual case. 

Mr. MULLIN. Remedies. But investing in an infrastructure is totally different, and I think that’s where we are outside the scope. 

And I appreciate what you guys are trying to do here, but I really 

feel like that this is outside the EPA’s authority to be able to force 

a company to invest in clean technology. That’s over and beyond 

what the Clean Air Act authority gave you. 

I yield back, Mr. Chairman. 

I’m sorry, I’m out of time. 

Mr. MURPHY. The gentleman is out of time, yes. 

Ms. DeGette, you had a quick comment? 

31 

Ms. DEGETTE. I just want to say a couple quick comments in 

closing. Number one, this was not the EPA forcing VW to do this. 

It was part of a settlement that both parties agreed on. 

Correct, Ms. Giles? 

Ms. GILES. That is correct. 

Ms. DEGETTE. So VW agreed this would be something they could 

do proactively to begin to mitigate this. 

Ms. GILES. That’s right. 

Ms. DEGETTE. Mr. Chairman, I just want to—now that we do 

have these two witnesses today, I already told you about how I enjoyed working with you and the committee this year. 

I also want to tell these two EPA witnesses that I think we’ve 

made extreme advances with the EPA the last few years. And Congress hasn’t always been a willing partner, but I think that creative thinking and cooperation is really what we need, moving forward, in making sure that we enforce our environmental regulations. 

When I talk to my constituents, what they want is they want 

clean air, they want clean water, they want safe drinking water. 

And your agency always gets vilified, but, actually, you’re trying to 

achieve those goals for the American people. I just want to say 

thank you. 

And I yield back. Thank you. 

Ms. GILES. Thank you. 

Mr. MURPHY. The gentlelady yields back. 

And we all share those concerns too. 

Let me just say this is our last hearing of this session for this 

Subcommittee on Oversight and Investigations. I want to thank all 

the members of this committee on both sides of the aisle for their 

dedication. We have had some remarkable hearings, provided some 

tremendous oversight, and shined a bright light on many Federal 

agencies and companies out there, and I think that’s been to the 

great benefit of the American people. It’s been an honor to serve 

as your chairman. 

In conclusion, I ask unanimous consent that the contents of the 

document binder be introduced into the record and authorize staff 

to make any appropriate redactions. Without objection, the documents will be entered into the record with any redactions the staff 

determines are appropriate. 

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

And I want to thank the witnesses today and the Members that 

are here that have been part of today’s hearing. And I remind 

Members they have 10 business days to submit questions for the 

record. We’ll have some other questions for the record we’ll submit 

to you, and I ask the witnesses all agree to respond promptly to 

those questions. 

And, with that, this committee is now adjourned. 

[Whereupon, at 12:17 p.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

PREPARED STATEMENT OF HON. FRANK PALLONE, JR. 

This is one of the final hearings of the Energy and Commerce Committee in the 

114th Congress. Over the last 2 years, we have worked together on several large 

bipartisan legislative victories, from a permanent SGR fix to TSCA reform to 21st 

32 

Century Cures. Unfortunately, I do not believe the Republican majority on this committee has properly prioritized many of the environmental challenges that plague 

our Nation and our planet. 

Today, we have before us two witnesses from the Environmental Protection Agency (EPA). I would like to congratulate both of you on the significant and meaningful 

environmental accomplishments of the EPA and the Obama administration. And I 

regret that the Republican majority has not often supported you in these endeavors. 

I would like to build upon what others have said about these environmental 

achievements: 

In 2015, President Obama and the EPA announced the Clean Power Plan, the 

first-ever national carbon pollution standards for power plants. The Plan armed 

states with flexible, cost-effective tools to cut carbon pollution from power plants. 

These efforts could prevent thousands of premature deaths and tens of thousands 

of childhood asthma attacks by reducing air pollution. 

In addition to efforts to reduce air pollution from power plants and vehicles, the 

Obama administration has updated drinking water standards and taken steps to ensure both urban and rural communities have access to clean drinking water. I’d like 

to see us do more in this area by updating the Safe Drinking Water Act. 

The Obama administration played a central role in the historic Paris Agreement. 

The strong international support for this agreement demonstrates the commitment 

to fight global climate change, adapt to new conditions and to accelerate the shift 

to a clean energy economy. In addition to this agreement, the U.S. also formed partnerships with a number of nations to reduce global greenhouse gas emissions and 

transition to renewable energy sources. This includes an agreement with China for 

both countries to reach targets to reduce greenhouse gas emissions in the coming 

decades. The U.S. has also dedicated funds to reducing carbon pollution and 

strengthening resilience in developing nations. 

The Obama administration also set new energy efficiency standards for a variety 

of appliances and equipment. These will result in significant cuts to consumers’ electricity bills and will lead to a reduction of more than two billion metric tons of carbon emissions by 2030. 

And then there’s the topic we are here to discuss today: the settlement agreement 

for Volkswagen’s two-liter vehicles. VW has committed to removing harmful vehicles 

from the road or reducing their emissions by 2019. The company must also fund a 

$2.7 billion mitigation trust fund and invest $2 billion in Zero Emission Vehiclecharging infrastructure and in the promotion of Zero Emission Vehicles. This agreement holds VW accountable for its Clean Air Act violations and secures significant 

investments for clean air and clean cars. 

This list is just a small sample of the environmental accomplishments we have 

seen in the last 8 years. These efforts are improving air quality, reducing childhood 

asthma attacks, and reducing premature deaths. They are also creating jobs for 

American workers and new economic opportunities for American businesses. 

A responsible Congress and President would take advantage of this forward 

progress and continue to build on these efforts. Unfortunately, I fear the next administration will not build upon that progress, but try to reverse much of it to the 

detriment of public health and the environment. 

The President-elect campaigned on the promises to do away with the Clean Power 

Plan and to withdraw from the Paris Agreement. He also said that he plans to dismantle environmental rules around coal power, open public lands to oil and gas 

drilling, and weaken fuel economy standards. Finally, he has vowed to abolish the 

EPA, or at least, dramatically limit its ability to regulate. 

Unfortunately, I fear that we cannot count on the Republican-led Congress to 

work with us to stop these destructive plans. House Republicans have passed bills 

to cut EPA funding, cut research funding for renewable energy, and block implementation of rules that would aid our environment and public health. The Senate 

Republicans have similarly proposed legislation to cut EPA’s budget and block critical environmental regulations. 

This is alarming. Every day, we see the signs that climate change is harming the 

world around us. And the longer we fail to act, the worse the consequences will be. 

According to a Gallup survey earlier this year, concern in the U.S. about global 

warming is at an 8-year high. 

We need to send a clear and unambiguous message that we are committed to 

working with the rest of the world to combat climate change. Such a commitment 

would help us leave our children a healthy and sustainable planet, and help us embrace the deployment of newer, cleaner and cheaper technology that will grow our 

energy economy. 

There is so much work to be done, and we cannot afford to take steps backwards. 

33 

I again thank both of our witnesses for being here today and for their longtime 

dedication to protecting our environment. We need committed public servants like 

you in this fight. 

I yield back. 

PREPARED STATEMENT OF HON. DIANA DEGETTE

Thank you, Mr. Chairman. 

This is the last EPA hearing this committee will hold with the Obama administration. 

The EPA has not always received the support it deserves from Congress. Even 

as the Agency has worked to fulfil its mission of protecting human health and the 

environment, it has faced criticism and attack. 

Despite sometimes unfair opposition, EPA has commendably responded to unprecedented environmental challenges facing the country and the planet. I would like 

to highlight some of the agency’s accomplishments. Under the Obama administration: 

• The EPA has helped bring more than 190 countries together to adopt the Paris 

Agreement, now considered the most ambitious climate change agreement in history; 

• The EPA has set new standards to reduce mercury and other pollutants from 

industrial air pollution, including boilers, cement plants, and large waste incinerators; 

• The EPA has enacted the first-ever fuel economy standards for medium and 

heavy-duty trucks and put in place new fuel standards for passenger vehicles by the 

year 2025; 

• And, the EPA has developed the Clean Power Plan, which will play a major role 

in reducing carbon pollution and enhancing air quality. 

I would like to thank both of our witnesses for your agency’s work. 

I would also like to commend both of you for your work on the Volkswagen settlement agreement, which we are here to discuss today. I am supportive of efforts to 

scrutinize this agreement and ensure that VW is held accountable, and I want to 

ensure that is the purpose of today’s hearing. 

We are here because of VW’s decision to cheat. For years, VW put tens of thousands of cars on the road that emitted nearly 40 times the NOx levels allowed by 

law. VW’s decision hurt not only its own customers, who thought they were buying 

clean cars, but all Americans now faced with dirtier air. 

The California Air Resources Board, the EPA, and the Department of Justice 

quickly brought action against VW. Their aim was to both make VW’s customers 

whole and to mitigate the effect that these cars are having on the environment. 

The Obama administration recently reached a partial settlement with VW to accomplish a mitigation strategy. The settlement, which addresses only 2.0-liter diesel 

vehicles, requires that VW spend nearly $15 billion to settle allegations of cheating 

emission tests and deceiving customers. It also orders VW to remove from commerce 

in the United States or perform an approved emissions modification on the vast majority of the affected vehicles. Finally, it requires VW to designate a $2.7 billion 

mitigation trust fund to pay for NOx reduction projects and invest $2 billion in 

charging infrastructure for Zero Emission Vehicles. 

I applaud EPA for its work. They have taken meaningful steps to make consumers whole and reverse the harm that was caused to the environment. 

As I said, I support efforts to investigate this settlement. But I believe we cannot 

fully understand the issues if VW is not represented here. They were the perpetrators of the fraud that necessitated this action in the first place. We need to hear 

how they will be following through on their new commitments to do right by their 

customers and the American people. I would encourage the committee to hold a future hearing with VW at the table, possibly joined by some other companies and 

individuals affected by this settlement. 

I want to conclude with a message about the next Congress. As we are all aware, 

the President-elect has not been supportive of the EPA’s mission. He has promised 

to abolish the agency and to back out of global treaties to reduce greenhouse gases. 

He has declared climate change a hoax. 

These statements should give us pause. There is undeniable proof of climate 

change. Our planet is getting hotter. Natural disasters are more frequent and more 

severe. Sea ice is at record lows. We need a strong EPA to address these challenges 

and to work with our international partners to ensure the whole world takes these 

problems seriously. 

34 

So as this year winds down and we look toward the 115th Congress, it is incredibly important that this committee support the EPA in its critical role. This committee has the tradition of working in a bipartisan way to work in the public interest. This should include addressing environmental challenges before it’s too late. I 

hope we can work together to accomplish this mission. 

I thank our witnesses for being here today and for your agency’s work. I applaud 

your work on this settlement to ensure consumers and the environment are protected. And more broadly, I thank the Obama administration as a whole for its work 

in prioritize environmental issues and make the world safer and healthier for future 

generations. 

Thank you. 

PREPARED STATEMENT OF HON. JANICE D. SCHAKOWSKY

Over a year ago, this subcommittee held a hearing after revelations that Volkswagen had cheated on emissions testing and defrauded American consumers. I had 

several questions in that hearing for Michael Horn of Volkswagen about how quickly 

its cars would be repaired and how the company would make its customers whole 

again. 

I would like to follow up on those questions today. Unfortunately, I cannot because—while this is a hearing on a settlement in the Volkswagen cheating scandal—no one from Volkswagen is here to testify. In fact, of the four parties in the 

settlement (Volkswagen, Department of Justice, California Air Resources Board, and 

Environmental Protection Agency), the Republican majority only invited the EPA. 

This should not be our last hearing on the Volkswagen scandal, and I hope the 

relevant parties will be better represented in future hearings. 

Cheating on emissions test has real consequences for Americans’ health. We must 

hold Volkswagen to account. I want to thank EPA for its ongoing efforts to mitigate 

the problems caused by Volkswagen vehicles. 

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