S. HRG. 111–1243 

OVERSIGHT: EPA’S PROPOSAL FOR FEDERAL 

IMPLEMENTATION PLANS TO REDUCE INTERSTATE TRANSPORT OF FINE PARTICULATE 

MATTER AND OZONE 

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UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

JULY 22, 2010 

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OVERSIGHT: EPA’S PROPOSAL FOR FEDERAL IMPLEMENTATION PLANS TO REDUCE INTERSTATE TRANSPORT 

OF FINE PARTICULATE MATTER AND OZONE 
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S. HRG. 111–1243 

OVERSIGHT: EPA’S PROPOSAL FOR FEDERAL 

IMPLEMENTATION PLANS TO REDUCE INTERSTATE TRANSPORT OF FINE PARTICULATE 

MATTER AND OZONE 

HEARING 

BEFORE THE

SUBCOMMITTEE ON CLEAN AIR 

AND NUCLEAR SAFETY 

OF THE

COMMITTEE ON 

ENVIRONMENT AND PUBLIC WORKS 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

JULY 22, 2010 

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

( 

Available via the World Wide Web: http://www.fdsys.gov 
(II) 

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

BARBARA BOXER, California, Chairman 

MAX BAUCUS, Montana 

THOMAS R. CARPER, Delaware 

FRANK R. LAUTENBERG, New Jersey 

BENJAMIN L. CARDIN, Maryland 

BERNARD SANDERS, Vermont 

AMY KLOBUCHAR, Minnesota 

SHELDON WHITEHOUSE, Rhode Island 

TOM UDALL, New Mexico 

JEFF MERKLEY, Oregon 

KIRSTEN GILLIBRAND, New York 

ARLEN SPECTER, Pennsylvania 

JAMES M. INHOFE, Oklahoma 

GEORGE V. VOINOVICH, Ohio 

DAVID VITTER, Louisiana 

JOHN BARRASSO, Wyoming 

MIKE CRAPO, Idaho 

CHRISTOPHER S. BOND, Missouri 

LAMAR ALEXANDER, Tennessee 

BETTINA POIRIER, Staff Director 

RUTH VAN MARK, Minority Staff Director 

SUBCOMMITTEE ON CLEAN AIR AND NUCLEAR SAFETY

THOMAS R. CARPER, Delaware, Chairman 

MAX BAUCUS, Montana 

BENJAMIN L. CARDIN, Maryland 

BERNARD SANDERS, Vermont 

JEFF MERKLEY, Oregon 

BARBARA BOXER, California (ex officio) 

DAVID VITTER, Louisiana 

GEORGE V. VOINOVICH, Ohio 

CHRISTOPHER S. BOND, Missouri 

JAMES M. INHOFE, Oklahoma (ex officio) 
(III) 

C O N T E N T S 

Page 

JULY 22, 2010 

OPENING STATEMENTS 

Carper, Hon. Thomas R., U.S. Senator from the State of Delaware ................... 1 

Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma .................... 4 

Cardin, Hon. Benjamin L., U.S. Senator from the State of Maryland ................ 6 

Voinovich, Hon. George V., U.S. Senator from the State of Ohio ........................ 8 

Alexander, Hon. Lamar, U.S. Senator from the State of Tennessee, prepared 

statement .............................................................................................................. 242 

WITNESSES 

McCarthy, Regina, Assistant Administrator, Office of Air and Radiation, U.S. 

Environmental Protection Agency ...................................................................... 161 

Prepared statement .......................................................................................... 163 

Responses to additional questions from: 

Senator Sanders ........................................................................................ 174 

Senators Inhofe and Voinovich ................................................................. 176 

Senator Alexander ..................................................................................... 188 

Snyder, Jared, Assistant Commissioner for Air Resources, Climate Change 

and Energy, New York State Department of Environmental Conservation ... 254 

Prepared statement .......................................................................................... 257 

Response to an additional question from Senator Alexander ....................... 267 

Korleski, Chris, Ohio Environmental Protection Agency ..................................... 268 

Prepared statement .......................................................................................... 270 

Svenson, Eric, Vice President, Policy and Environment, Health and Safety, 

Public Service Enterprise Group ........................................................................ 273 

Prepared statement .......................................................................................... 275 

Responses to additional questions from Senator Alexander ......................... 282 

Schneider, Conrad G., Advocacy Director, Clean Air Task Force ........................ 284 

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

(1) 

OVERSIGHT: EPA’S PROPOSAL FOR FEDERAL 

IMPLEMENTATION PLANS TO REDUCE 

INTERSTATE TRANSPORT OF FINE PARTICULATE MATTER AND OZONE 

THURSDAY, JULY 22, 2010 

U.S. SENATE, COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS, SUBCOMMITTEE ON CLEAN AIR AND NUCLEAR SAFETY, Washington, DC. 

The Subcommittee met, pursuant to notice, at 10 a.m. in room 

406, Dirksen Senate Office Building, Hon. Thomas R. Carper 

(Chairman of the Subcommittee) presiding. 

Present: Senators Carper, Inhofe, Voinovich, and Cardin. 

OPENING STATEMENT OF HON. THOMAS R. CARPER, 

U.S. SENATOR FROM THE STATE OF DELAWARE 

Senator CARPER. This hearing will come to order. 

I welcome one and all for joining us today, our colleagues, our 

witnesses, and those that are in the audience. 

Today’s oversight hearing is focused on the EPA’s proposal for 

Federal implementation of plans to reduce interstate transport of 

fine particulate matter and ozone. Senators will have 5 minutes for 

their opening statements, and I will recognize after our colleagues 

have made their opening statements, recognize our panel of witnesses. 

Following panel statements we will have two rounds of questions. 

There is a signing ceremony at the White House later this morning on a piece of legislation I worked on for 6 years, and I think 

I am going to go to that. 

[Laughter.] 

Senator CARPER. But that means we are going to move along 

fairly expeditiously, not rushed, but we are going to move expeditiously. 

As most of the folks in this room know—11:30. The bill signing 

is at 11:30. 

Almost 20 years have gone by since Congress last passed significant revisions to the Clean Air Act. And in those 20 years we have 

made real progress in reducing our Nation’s air pollution. 

However, many of our dirtiest polluters have kept polluting, albeit at a somewhat slower rate. Reductions have not kept pace with 

the public health risks and costs attributed to this harmful air pol-
2 

lution. Simply put, we have to do better, a lot better. And the good 

news is, we can. 

When Senator Alexander and I began working together to clean 

up our Nation’s air about 6 years ago, we faced many challenges. 

I would just hasten to add that Senator Voinovich and I—and Senator Inhofe as well—were working on it even before Lamar and I 

teamed up on these issues. 

But I want to mention two of the challenges that we face today. 

The first major challenge that we face is that air pollution causes 

serious health effects, as we know, including asthma, cancer, brain 

damage, even death. According to the American Lung Association 

the majority of Americans, that is more than 175 million people, 

live in areas where there is enough air pollution to endanger their 

lives or threaten their health. 

The second challenge that we face is that air pollution knows no 

State boundaries. Air pollution emitted by our oldest and dirtiest 

fossil fuel power plants doesn’t just affect the State in which they 

are located and the health of the people in those States in which 

they are located. In fact Mid-Atlantic and Northeastern States like 

Delaware, like Maryland, like New Jersey, Connecticut, and Rhode 

Island are located in what I call the end of America’s tailpipe. We 

are among the States that receive a heavy dose of pollution from 

other States’ dirty power plants. 

To ensure that States are good neighbors, regional and national 

regulations of air emissions are crucial. That is what brings us all 

here today. Over the past 10 years the EPA has attempted to regulate harmful power plant emissions that transport across State 

boundaries, but the court challenges have stood in their way. In 

2005 the EPA issued the Clean Air Interstate Rule, affectionately 

known as CAIR, to reduce sulfur dioxide and nitrogen oxide emissions in 28 eastern States. 

After multiple lawsuits in 2008 the District of Columbia Circuit 

Court vacated CAIR in its entirety but later modified its decision 

to remand, allowing CAIR to remain in effect until a new rule was 

promulgated by the Environmental Protection Agency. The proposed Transport Rule is EPA’s response to the Court’s concerns. 

I believe the EPA has done a good job with the tools that they 

have to address interstate air pollution. To meet the Court’s challenge, the Transport Rule is complex and limits business flexibility. 

However, it is clear this rule can make possible real gains in further cleaning our air and protecting public health. 

Today we will hear more details from EPA about how this complex rule will work. We will also hear from the States, from the environmental community, and from business on what they expect 

the impacts to be once this rule is implemented. 

I believe that EPA has written a rule that meets the Court’s demands, but like other rules I expect we will see this rule litigated 

before the courts in the not too distant future. This is a rule to help 

meet the 1997 standards, 1997 standards. As we all know it is not 

1997 anymore. It is 2010, and it is time we have clarity and certainty on clean air reductions. I believe this Congress needs to pass 

bipartisan legislation that I co-authored along with Senator Alexander and 14 others of our colleagues, Democrats and Republicans. 

Legislation that cuts mercury emissions by 90 percent and tightens 
3 

national emissions of sulfur dioxide and nitrogen oxide. This legislation, as shown by EPA modeling, will save even more lives than 

the EPA’s Transport Rule, at a very low cost to the consumer. 

However, it is clear that we should be debating how to strengthen the Clean Air Act so we can save thousands of lives and billions 

of dollars in health care costs rather than debate whether we 

should be weakening our ability to clean up the air. 

So that is the statement I wanted to offer today. 

I am going to call on Senator Inhofe next for his statement. I am 

glad that you are here, and thank you for your efforts in these 

venues. 

[The prepared statement of Senator Carper follows:] 

STATEMENT OF HON. THOMAS R. CARPER, 

U.S. SENATOR FROM THE STATE OF DELAWARE

Ladies and gentlemen, almost 20 years have gone by since Congress last passed 

significant revisions to the Clean Air Act. In those 20 years, however, we have made 

real progress in reducing our Nation’s air pollution. 

However, many of our dirtiest polluters have kept polluting—albeit at a somewhat 

slower rate—but reductions have not kept pace with the public health risks and 

costs attributed to this harmful air pollution. 

Simply put, we’ve got to do better. Much better. And the good news is we can. 

When Senator Alexander and I began working together to clean up our Nation’s 

air about 6 years ago, we faced many challenges. I’ll mention two of these challenges 

today. 

The first major challenge we face is that air pollution causes serious health effects, including asthma, cancer, brain damage—even death. 

According to the American Lung Association, a majority of Americans—more than 

175 million people—live in areas where there is enough air pollution to endanger 

their lives or threaten their health. 

The second challenge we faced is that air pollution knows no State boundaries. 

Air pollution emitted by our oldest and dirtiest fossil fuel power plants doesn’t 

just affect the State in which they are located. In fact, mid-Atlantic and northeastern States like Delaware, Maryland, New Jersey, Connecticut, and Rhode Island 

are located at what I call ‘‘the end of America’s tailpipe.’’ 

We are among the States that receive a heavy dose of pollution from other States’ 

dirty power plants. 

To ensure that States are ‘‘good neighbors,’’ regional and national regulations of 

air emissions are crucial. And that is what brings us all here today. 

Over the past 10 years the EPA has attempted to regulate harmful power plant 

emissions that transport across State boundaries, but court challenges have stood 

in their way. 

In 2005 the EPA issued the Clean Air Interstate Rule (CAIR) to reduce sulfur dioxide and nitrogen oxide emissions in 28 eastern States. After multiple lawsuits, in 

2008 the D.C. Circuit Court vacated CAIR in its entirety but later modified its decision to remand—allowing CAIR to remain in effect until a new rule was promulgated by the EPA. 

The proposed Transport Rule is EPA’s response to the Court’s concerns. 

I believe the EPA has done a good job with the tools they have to address interstate air pollution. 

To meet the Court’s ruling, the Transport Rule is complex and limits business 

flexibility; however, it is clear this rule can make possible real gains in further 

cleaning our air and protecting public health. 

Today, we will hear more details from the EPA about how this complex rule will 

work. We will also hear from the States, environmental community, and business 

on what they expect the impacts to be once this rule is implemented. 

I believe that EPA has written a rule that meets the Court’s demands, but—like 

other rules—I expect we will see this rule litigated before the Court in the not too 

distant future. 

This is a rule to help meet 1997 standards. 1997. As we all know, it’s not 1997 

anymore. It’s 2010, and it’s time we have clarity and certainty on clean air reductions. 

I believe this Congress needs to pass bipartisan legislation that I’ve authored 

along with Senator Alexander and 14 of my other colleagues. Legislation that cuts 
4 

mercury emissions by 90 percent and tightens national emissions of sulfur dioxide 

(SO2) and nitrogen oxides (NOx). 

This legislation—as shown by EPA modeling—will save even more lives than the 

EPA’s Transport Rule, at a very low cost to the consumer. 

However, it’s clear that we should be debating how to strengthen the Clean Air 

Act so we can save thousands of lives and billions of dollars in healthcare costs rather than debate whether we should be weakening our ability to clean up the air. 

OPENING STATEMENT OF HON. JAMES M. INHOFE, 

U.S. SENATOR FROM THE STATE OF OKLAHOMA 

Senator INHOFE. Thank you, Mr. Chairman. Thank you for having this hearing and also working together. I said the same thing 

about Senator Cardin, when he had his legislation here, that we 

have more of a spirit of cooperation than people on the outside 

want. 

Let me say at the outset, when it comes to reducing real air pollution from power plants the best way to accelerate environmental 

progress and institute certainty for businesses is through 3-P legislation. I am pleased that our staffs have been working across the 

aisle to find that common ground. Even if we fall short of reaching 

agreement we are laying the groundwork for bipartisan legislation 

in the next Congress. 

This is not something that is new for me, as everyone here 

knows. I supported the 3-P legislation when I was Chairman of the 

whole Committee, the Environment and Public Works Committee. 

I tried to advance the Clear Skies Bill, not all that dissimilar from 

what we are talking about now. 

Because that effort eventually failed for reasons we don’t need to 

get into now, we got regulations under the Clean Air Act that the 

D.C. Circuit ultimately rejected. That is something that Senator 

Voinovich and I predicted was going to happen. Here is what I said 

when the Bush administration’s Clean Air Interstate Rule was promulgated, the CAIR Rule, and I am quoting now from what I said 

at that time: ‘‘This Clean Air Interstate Rule is significantly more 

vulnerable to court challenges than legislation and will undoubtedly be held up. Trying to litigate the way to cleaner air only 

delays progress, often yields little or no result, and wastes millions 

of taxpayers’ dollars.’’ 

So here we sit, debating EPA’s replacement regulations that, 

though admirable in their intent, are onerous and complex and vulnerable to the same lawsuits that stymied previous attempts to reduce emissions of SOx and NOx. 

Like the Bush administration’s Clean Air Interstate Rule, EPA’s 

transport rule addressees the transport of fine particles, the PM, 

and ozone across State lines. This rule, to put it mildly, is not a 

model for simplicity. For example, as the Clean Air Task Force has 

noticed under the rule, ‘‘EPA will issue four discrete types of new 

emission allowances for four different cap and trade programs corresponding to four different control regimes.’’ Utilities will also face 

moving and uncertain emission targets as EPA further tightens national ambient air quality standards, or the NAAQS, for ozone and 

PM over the next few years. 

In my State of Oklahoma this issue of uncertainty, uncertainty 

over the pending NAAQS revisions and future transport rules, is 
5 

causing substantial concern. I look forward to addressing this issue 

with questions to our Assistant Administrator McCarthy. 

Also to address legal problems identified by the Court EPA greatly restricted the ability of the utilities to trade emissions rights. I 

am afraid that these trading restrictions and the resulting and devaluing of the previous banked allowances from the acid rain program have created a lack of confidence in emission trading markets. 

Now, on the question of trading, I want to quickly address the 

argument that trading for SOx and NOx is the same as trading for 

CO2. This is simply false. We have talked about this in this Committee many times. When the 1990 Clean Air Act Amendments 

were passed we had commercially available technology as well as 

low sulfur coal to meet emissions reductions requirements. As two 

EPA attorneys have noticed with acid rain, ‘‘Little new technology 

or infrastructure was needed, and little was created.’’ 

Now, with CO2 we don’t have emission-specific technology. Compliance would come in many cases from shutting down coal. That 

is why passing restrictions on CO2 will mean, among other things, 

higher electricity prices, especially in the Midwest and the South. 

Serious reliability problems and fewer jobs. 

So let’s avoid the temptation to re-introduce CO2 into this debate. 

I think we have pretty much agreed on that now. We can pass a 

straightforward 3-P bill that sets clear targets, and I would say 

achievable targets. We may have to get together and talk about 

these things, that sets clear targets and timetables and avoids endless litigation that enriches lawyers at the expense of obtaining certain public health and environmental benefits. 

We could surprise many in this city who don’t think passing bipartisan legislation of this kind is possible. I stand ready to make 

it happen. And I thank you, Mr. Chairman. 

[The prepared statement of Senator Inhofe follows:] 

STATEMENT OF HON. JAMES M. INHOFE, 

U.S. SENATOR FROM THE STATE OF OKLAHOMA

Chairman Carper, thank you for holding this hearing today to discuss EPA’s new 

Transport Rule. 

Let me say at the outset that when it comes to reducing real air pollution from 

power plants the best way to accelerate environmental progress and institute certainty for businesses is through 3-P legislation. I’m pleased that our staffs are working across the aisle to find common ground that could lead to passage of 3-P legislation this year. Even if we fall short of reaching agreement we are laying the groundwork for bipartisan legislation in the next Congress. 

This is not something new for me. I supported 3-P legislation when as chairman 

of EPW I tried to advance the Clear Skies bill. Because that effort eventually failed 

for reasons I won’t get into now, we received regulations under the Clean Air Act 

that the D.C. Circuit ultimately rejected—something Senator Voinovich and I predicted would happen. Here’s what I said when the Bush administration’s Clean Air 

Interstate Rule was promulgated: ‘‘This Clean Air Interstate Rule is significantly 

more vulnerable to court challenges than legislation and will undoubtedly be held 

up. Trying to litigate the way to cleaner air only delays progress, often yields little 

or no result, and wastes millions in taxpayer dollars.’’ 

So here we sit, debating EPA’s replacement regulations that—though admirable 

in their intent—are onerous and complex and vulnerable to the same lawsuits that 

stymied previous attempts to reduce emissions of sulfur dioxide and nitrogen oxides. 

Like the Bush administration’s Clean Air Interstate Rule, EPA’s Transport Rule 

addresses the transport of fine particulate matter (PM) and ozone across State lines. 

This rule is, to put it mildly, not a model of simplicity. For example, as the Clean 

Air Task Force has noted, under the rule, ‘‘EPA will issue 4 discrete types of new 
6 

emission allowances for 4 different cap-and-trade programs corresponding to the 4 

different control regimes.’’ 

Utilities will also face moving and uncertain emissions targets as EPA further 

tightens National Ambient Air Quality Standards (NAAQS) for ozone and PM over 

the next few years. In my State of Oklahoma this issue of uncertainty over the 

pending NAAQS revisions and future transport rules is causing substantial concern, 

and I look forward to addressing this issue with questions to Assistant Administrator McCarthy. 

Also, to address legal problems identified by the Court EPA greatly restricted the 

ability of utilities to trade emission rights. I am afraid that these trading restrictions and the resulting devaluing of previously banked allowances from the Acid 

Rain Program have created a lack of confidence in emissions trading markets. 

Now, on the question of trading, I want to quickly address the argument that 

trading for SO2 and NOx is the same as trading for CO2. This is simply false. When 

the 1990 Clean Air Act amendments were passed we had commercially available 

technology as well as low sulfur coal to meet emissions reduction requirements. As 

two EPA attorneys have noted, with Acid Rain, ‘‘Little new technology or infrastructure was needed, and little was created.’’ 

With CO2 we don’t have emissions specific technology; compliance would come in 

many cases from shutting down coal. That’s why passing restrictions on CO2 will 

mean, among other things, higher electricity prices, especially in the Midwest and 

South, serious reliability problems, and fewer jobs. 

So let’s avoid the temptation to re-introduce CO2 into this debate. We can pass 

a straightforward 3-P bill that sets clear targets and timetables and avoids the endless raft of litigation that enriches lawyers at the expense of attaining certain public 

health and environmental benefits. We could surprise many in this city who don’t 

think passing bipartisan legislation of this kind is possible. And I stand ready to 

make it happen. 

Thank you. 

Senator CARPER. I thank you for that spirit and very much for 

your statement. 

We have been by one of our co-sponsors of our legislation. I want 

to thank Senator Cardin for becoming a co-sponsor, and I want to 

thank you very much for being here today. 

Thank you. Welcome. You are recognized. 

OPENING STATEMENT OF HON. BENJAMIN L. CARDIN, 

U.S. SENATOR FROM THE STATE OF MARYLAND 

Senator CARDIN. Mr. Chairman, let me congratulate you; as I 

have said before, you have taken steps, I think, to bring us together on an extremely important legislation with 3-Ps. Senator 

Inhofe, thank you for your kind comments at the beginning of your 

testimony. You are right; when we work together we get things 

done. We also get better bills. 

So I hope that what we are doing here in this Committee in trying to bring us together on important environmental legislation can 

be a model for the type of civility that yields good results for the 

people of this Nation. Thank you both, and Senator Carper, as you 

know, you have been a real champion on this issue. 

And I thank you for your patience. We are getting closer, and we 

are making a lot of progress. Maryland has taken aggressive steps 

to reduce air pollution emissions within the State. In 2007 Maryland passed the Healthy Air Act, the country’s most aggressive 

clean air legislation. Using 2002 as its emission baseline the 

Healthy Air Act has Maryland well on its way to reducing the 

State NOx emissions by 75 percent by 2012 after already achieving 

an interim goal of 70 percent reduction targets on NOx in 2009. 

SOx emissions will reduce by 80 percent this year with the second phase of controls in 2013 achieving 35 percent SO2 emission 
7 

reductions. Despite Maryland’s successful efforts to reduce its inState emissions of ground level ozone and PM2.5-causing emissions, 

pollution from upwind States prevent Maryland from reaching attainment under the Clean Air Act. On most bad air days somewhere between 50 percent to 75 percent of Maryland’s air pollution 

originates in upwind States. 

This June the Baltimore and Washington metropolitan areas experienced 22 moderate and unhealthy air days. Mr. Chairman, that 

is why your bill is just so important to this country and Maryland. 

More than 2 million Marylanders suffer from respiratory and cardiovascular diseases like asthma, emphysema, and diabetes. 

Unhealthy air days exacerbate health problems for at-risk populations that cost Americans billions of dollars in health care costs, 

loss of wages due to illnesses triggered by bad air that leads to absences from work and school. 

EPA’s new proposed Transport Rule is a step toward addressing 

the persistent clean air issue Mid-Atlantic and Northeast States 

face. The Rule requirements for power plants to finally install modern pollution control technology across most of the eastern half of 

the United States is long overdue. 

However, EPA acknowledges that even with the new Clean Air 

Transport rules in place there will still be municipalities that will 

continue to struggle with meeting attainment as indicated throughout our region. Baltimore City and Anne Arundel County, Maryland, are two jurisdictions that are projected to have maintenance 

problems even with the new Transport Rules in place. This new 

rule is an important first step, but clearly there is more work that 

needs to be done. 

Fortunately, there are opportunities on the horizon to achieve 

emission reductions needed to allow all States to achieve attainment. I am committed to working with Chairman Carper and the 

members of this Committee so that we can achieve the type of national legislation to assist EPA in the work that it is doing and the 

work that is being done by many of our States. 

Mr. Chairman, again, thank you for your leadership. I look forward to working with you. 

[The prepared statement of Senator Cardin follows:] 

STATEMENT OF HON. BENJAMIN L. CARDIN, 

U.S. SENATOR FROM THE STATE OF MARYLAND

Thank you, Senator Carper, for holding this hearing today to examine EPA’s proposed Clean Air Interstate Rule. I appreciate our witnesses taking the time to come 

before your Subcommittee to discuss the important work that is being done to better 

protect our air quality. 

I know, Senator Carper, this is an issue you care deeply about and have spent 

a great deal of your career working on. I appreciate the time and attention that you 

and this Subcommittee spend on this important human health issue. 

Senator Carper and I understand the importance of addressing air pollution 

transport as it affects the health of our constituents living in or neighboring downwind States located at ‘‘America’s Tailpipe.’’ For this reason I appreciate that EPA 

is in the process of addressing the issue of air pollution transport through its new 

Transport Rule. 

Maryland has taken aggressive steps to reduce air pollution emissions within the 

State. In 2007 Maryland passed the Healthy Air Act, the country’s most aggressive 

clean air legislation. 

Using 2002 as its emissions baseline the Healthy Air Act has Maryland well on 

its way to reducing in-State NOx emissions by 75 percent by 2012 after already 

achieving an interim goal of 70 percent reduction target for NOx in 2009. 
8 

1 According to the American Lung Association’s ‘‘2010 State of the Air’’ Report Card for Maryland. 

SO2 emissions will be reduced by 80 percent this year with a second phase of controls in 2013 to achieve 85 percent SO2 emission reductions. 

Despite Maryland’s successful efforts to reduce in-State emissions of ground level 

ozone and PM2.5 causing emissions, pollution from upwind States prevents Maryland from reaching attainment under the Clean Air Act. 

On most bad air days somewhere between 50 percent and 75 percent of Maryland’s air pollution originates in an upwind State. This June the Baltimore and 

Washington metropolitan areas experienced 22 moderate and unhealthy air days. 

More than 2 million Marylanders suffer from respiratory and cardiovascular diseases like asthma, emphysema, and diabetes. 1 Unhealthy air days exacerbate 

health problems of at-risk populations and cost Americans billions of dollars in 

health care costs and lost wages due to illnesses triggered by bad air that lead to 

absences from work and school. 

EPA’s newly proposed Transport Rule is a step toward addressing the persistent 

clean air issues Mid-Atlantic and Northeast States face. The rule’s requirement for 

power plants to finally install modern pollution control technology across most of the 

eastern half of the United States is long overdue. 

However, EPA acknowledges that even with the new Clean Air Transport Rule 

in place there will still be municipalities that will continue to struggle with meeting 

attainment, as indicated on this map. 

Baltimore City and Anne Arundel County, Maryland, are two jurisdictions that 

are projected to have ‘‘maintenance problems’’ even with the new Transport Rule in 

place. This new rule is an important first step, but clearly there is more work that 

needs to be done. 

Fortunately, there are opportunities on the horizon to achieve emissions reductions needed to allow all States to achieve attainment. 

I am committed to working to make sure that the Federal Government’s efforts 

keep pace with and support the hard work Maryland is doing at the State level to 

protect Marylanders from unhealthy air. 

I want to urge EPA and my colleagues to continue working toward the goal of 

eliminating bad air days. I look forward to working with Senator Carper and other 

members of this Committee to achieve this end. 

Thank you, and I look forward to hearing the testimony of our witnesses. 

Senator CARPER. We look forward to being your partner, and 

again, thanks very, very much. 

Senator Voinovich has worked on these issues I think probably 

for longer than I have. Unfortunately he is thinking of leaving us 

at the end of the year. He is on a mission—and I am, too—to make 

sure that a number of items on his agenda list get completed. This 

could be part of his legacy, and I think part of the legacy of this 

Committee. So thank you very much for all the work and the effort 

you have put into this. My hope is that we will find by the end of 

this year it will have been for a very, very good purpose. 

Senator Voinovich. 

OPENING STATEMENT OF HON. GEORGE V. VOINOVICH, 

U.S. SENATOR FROM THE STATE OF OHIO 

Senator VOINOVICH. Thank you, Senator Carper. I smile because 

I can still remember when Senator Jeffords was Chairman of this 

Committee, and we were talking about the same thing 8 years ago. 

I just would like to start out right now with a big picture thing. 

If you look at what we have done in health, we have looked at financial regulations, we are talking about climate change, this air 

rule, the CAIR Rule, issue of taxation, there is more uncertainty 

today in this country than I have ever seen in my entire life. There 

was a recent article in Newsweek by Fareed Zakaria who talked 

about the fact that we are sitting on about $2 trillion—businesses 

are, not doing anything because they just don’t know where we are 
9 

going. So they are just kind of sitting back and trying to figure out, 

where are we going. 

I think that is kind of a backdrop. The other is that I heard Senator Cardin’s statement about all of the health problems that we 

have. From my side you will be hearing a lot about what the costs 

are for the companies and the people and so on and so forth. 

The problem is that in terms of the cost-benefit, we don’t get into 

that. According to what I know Ms. McCarthy doesn’t have to consider that part of it. She has to consider the health part of it. When 

you do the Water Rule you have cost-benefit analysis, you have 

peer review, you have alternative regulations, et cetera. So we have 

never got there. And frankly, when I first came here, the first couple of years, I tried to get cost-benefit put in the air and just got 

blasted out. Just a terrible thing, we should never do it and so 

forth. 

But that is a fundamental thing that I think we all need to talk 

about one of these days. Because that is what we are running into. 

Senator CARPER. When we get into questions, one of the questions I will be asking of the Administration is about cost and benefit. 

Senator VOINOVICH. So I would like to say that I am glad that 

you are calling this today. I am glad that Chris Korleski, head of 

Ohio’s Department of Environmental Protection, is one of the witnesses. And I am anxious to hear everyone’s thoughts about the 

EPA’s proposed Transport Rule. 

As the Chairman knows, I have long sought a national policy 

that implements a comprehensive air quality strategy that helps 

attain our Nation’s Ambient Air Quality Standards and streamlines Clean Air Act requirements. I have been working—the first 

thing I did when I became Governor was to get Ohio to comply 

with the Ambient Air Standards because I knew its impact when 

I was Mayor, and we needed to get on with this. It had real, not 

only health benefits, but it also had economic benefits. 

I did sponsor the Clear Skies Act, and the Chairman and I 

know—we spent a lot of time on it. When the Court overturned 

EPA’s first Interstate Transport Rule, CAIR, and the mercury rule, 

it left us with no comprehensive or cost effective policy to reduce 

emissions or untangle the complicated web of overlapping and redundant regulations affecting power plants. Senator Inhofe said 

this, we both feared, and it happened. 

EPA’s Transport Rule does not allay these concerns. In fact, the 

proposal presents a string and inflexible regulatory regime that 

may be unworkable as a practical matter. If the agency finalizes 

its rule on schedule, spring of 2011, it would allow for little more 

than 6 months for compliance. Then a mere 2 years later a second 

phase of caps would kick in, reducing SO2 and NOx by 71 and 52 

percent, respectively. 

These timeframes do not recognize the realities associated with 

designing, permitting, and installing the equipment to meet the 

mandates. Because the proposal virtually eliminates emission trading the regulatory hurdles will be all that much greater. Adding to 

the challenge, EPA is proposing to revise the emission caps as new 

NAAQS are promulgated. This means that the electric sector will 
10 

face ever changing compliance hurdles that will provide little clarity for business planning. 

With the added uncertainty of future greenhouse gas controls, 

the potential regulation of coal ash as a hazardous waste, the electric power industry is facing an uncertain and chaotic situation 

that I believe is incumbent upon Congress to fix. And the chart behind me is an indication of what they are going to be confronting, 

2008 over here to 2017. 

This is what I am looking at, if I am running a utility company. 

Just think about this. Senator Carper, if we could work something 

out, we could eliminate all of this stuff, or most of it, so that people 

know where they are going, what am I going to have to do, how 

much am I going to have to invest, what am I going to have and 

so forth. 

And this fear that I have is not unfounded. The 2009 National 

Energy Technology Laboratory analysis titled GDP Impacts of Energy Costs found that if 25 percent of the Nation’s coal generating 

capacity is replaced with natural gas or renewables, electricity 

prices would increase by 25 percent, GDP would decrease by 2.6 

percent, and the economy would shed nearly 3 million jobs. I would 

like to submit a copy of that report for the record. 

Senator CARPER. Without objection, so ordered. 

Senator VOINOVICH. Then you compare this to a recent Edison 

Electric Institute analysis that depicts the cumulative effect of 

pending EPA rules on the electric power sector. This analysis 

shows that the agency’s actions have the potential to shutter over 

120,000 megawatts of coal-fired generation by 2015. This is over 38 

percent of our country’s coal fleet. And I would like to submit a 

copy of that report for the record. 

Senator CARPER. Without objection, so ordered. 

Senator VOINOVICH. Indeed, a major service provider in Ohio, 

AEP, projects that pending EPA regulations would cause them to 

shutter 4,000 to 6,000 megawatts, 20 to 35 percent of their coalfired capacity, in their near eastern service area in the 2014–2015 

timeframe. I have detailed testimony from AEP, and I would like 

to have that submitted for the record. 

Senator CARPER. Without objection, so ordered. 

Senator VOINOVICH. We can alleviate these concerns by properly 

coordinating the compliance obligations for the electric power sector while giving the industry a predictable compliance road map 

over the next 10 to 20 years. This would promote efficiency, allow 

companies to make strategic error investments to reduce emissions 

and provide electric reliability. 

For these reasons a 3-P strategy continues to make sense. I am 

appreciative of the Carper-Alexander legislation. As you know, we 

are trying to work together to see if we can’t get something done 

in that arena. I would love to do it, because maybe we wouldn’t be 

here 5 years from now talking about the same subject. 

Thank you. 

[The referenced material follows:] 
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Senator CARPER. Thank you very much. 

That would be a good goal to work toward. You and I have put 

a lot of time and energy into this. I know so has our former Chair, 

Senator Inhofe, and Lamar Alexander and others on the Committee. 

A lot of people think we can’t get much done this year and that 

we are just going to ride it out and just end up with delay and inability to find common ground. I am more hopeful, particularly in 

this area, that we can surprise some people. So let’s give it a shot. 

Our first witness, the entire panel is one person, one woman. It 

is Regina McCarthy, and she has been here a number of times before. We are grateful that you are willing to come back and to talk 

with us today. 

EPA Assistant Administrator for the Office of Air and Radiation, 

I think you have been in this job for almost 18 months. It probably 

seems like 18 years. We thank you for your service and for your 

leadership, Gina. 

Ms. McCarthy, you have 5 minutes to read your opening statement. The full content of your written statement will be included 

in the record, and you are recognized. Please proceed. Thank you 

for joining us. 

STATEMENT OF REGINA MCCARTHY, ASSISTANT ADMINISTRATOR, OFFICE OF AIR AND RADIATION, U.S. ENVIRONMENTAL PROTECTION AGENCY 

Ms. MCCARTHY. Thank you. It is great to be here, Chairman Carper, members of the Subcommittee. I thank you for inviting me to 

testify today on EPA’s recently proposed Federal implementation 

plans to reduce interstate transport of fine particulate matter and 

ozone, which we call the Transport Rule, which we believe is an 

important step toward protecting public health, to helping States 

reduce their pollution, and to meeting our clean air standards. 

Millions of people continue to breathe unhealthy air that does 

not meet our National Ambient Air Quality Standards. This is due 

to a combination of pollution from local and in-State sources as 

well as pollution from upwind States that cross State lines. As a 

result the Clean Air Act assigns responsibility to meet the Clean 

Air Standards to both upwind and downwind States. EPA’s recently proposed Transport Rule addresses upwind States’ responsibilities while States and local agencies must continue to work on 

local and in-State pollution control measures. 

This transport rule represents a significant step that EPA is taking to help States implement the good neighbor provision of the 

Clean Air Act on an ongoing basis. It also fulfills our commitment 

to address interstate transport with the exact same urgency that 

we and other State partners bring to the local non-attainment 

planning obligations. From now on, each time a NAAQS is changed 

EPA will evaluate whether interstate pollution transport contributes to the air quality problem, and if so, whether new emissions 

reductions will be required from upwind States. 

Our proposed Transport Rule would require significant reductions in SO2 and NOx emissions from power plants in 31 States and 

the District of Columbia. The first phase would take effect in 2012 

in all 31 States and DC, with a second phase that would take effect 
162 

in 15 States in 2014. By 2014 we project that power plant SO2

emissions in the covered area will be 71 percent lower than 2005 

levels, and power plant emissions of NOx emissions will be 52 percent lower than 2005 levels. 

The emission reductions required by the Transport Rule in 

upwind States will provide health and environmental benefits both 

in-State and in downwind States. We estimate that by 2014 it will 

prevent 14,000 to 36,000 premature deaths annually and provide 

more than $120 billion to $290 billion annual savings and benefits. 

These benefits will far outweigh the estimated annual cost of $2.8 

billion in 2014. It will help all but a very few areas in the eastern 

part of the country come into attainment with the 1997 PM2.5 and 

ozone standards and make major strides toward attaining the 2006 

24-hour average PM2.5 standard. 

When final, the proposed rule will replace the Clean Air Interstate Rule which was remanded back to EPA in 2008. In response 

to the Court decision EPA went back to the drawing board and developed a new rule that reflects the Court decision. Compared to 

CAIR some of the major differences in the Transport Rule include 

more emission reductions in 2012 and 2014 and a definition of significant contribution that is based both on cost as well as downwind air quality impacts. We are closely adhering to the 2008 

Court opinion with regard to establishing State budgets, interstate 

trading, use of title IV allowances, fuel factors, and other issues 

that the Court spoke to as well as developing a new methodology 

that can be applied to current and future NAAQS revisions. 

As you are all well aware, this proposal is the first of several 

rules that EPA intends to issue over the next 2 years that will 

yield substantial public health and environmental benefits and 

maintain a reliable and affordable supply of electric power across 

the country. In developing and promulgating these rules the agency 

will be providing States with the help that they need to attain the 

NAAQS and providing the power industry with a much clearer picture of what EPA will require of it in the next decade. 

As I have stated here before, my top priority is to work with you, 

with the power industry, with the other industry sectors, States, 

community groups and environmental groups, and with the full 

range of experts from government, business and universities to find 

the right path forward in crafting the laws and regulations we need 

to protect public health and the environment. I still believe that 

that is the most important responsibility I have right now. 

And to that end, let me note before I close how much I appreciate 

the substantial contribution that Senator Carper and S. 2995 have 

made to the debate and to our shared goal of clean air. S. 2995 offers emission reductions that would provide significant benefits to 

the public, and it would maintain critical authorities in the current 

Clean Air Act that are designed to ensure that every American 

breathes air that meets health-based National Ambient Air Quality 

Standards. 

I am confident that together we can make great strides to meet 

our shared goal. Thank you very much, and I am here to answer 

questions. 

[The prepared statement of Ms. McCarthy follows:] 
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Senator CARPER. Thank you very much for your comments, especially that last paragraph. 

Ms. MCCARTHY. I appreciate that. Maybe I should have started 

with that one. 

[Laughter.] 

Senator CARPER. Senator Alexander is not here. He and I were 

together earlier this morning. He is in a markup. I think he is the 

only Republican at the markup; he needs to be there. He is submitting a statement for the record. But this is something he and I 

worked on very closely, as I have with my colleagues to my right 

over the years. So this is a shared effort on our side. We are really 

pleased with what you just said. 

[The prepared statement of Senator Alexander follows:] 

STATEMENT OF HON. LAMAR ALEXANDER, U.S. SENATOR FROM THE STATE OF TENNESSEE

I am pleased that the Committee is holding this hearing today on an issue that 

I believe is of great importance. I see no reason why we cannot continue to improve 

on the significant reductions in harmful pollutant emissions from our coal-fired 

power plants. The EPA’s efforts to improve air quality by reducing power plant 

emissions of SO2 and NOx are a positive step, but they are too regional, too complicated, and too weak to be a permanent solution for public health and for the certainty and flexibility that utilities need to keep electric rates down. 

While I applaud the fact that the EPA’s Transport Rule requires greater reductions than under the previous Clean Air Interstate Rule, I am concerned about several things in the proposed rule. 

First, this rule will not address the issue of mercury. While I know that the EPA 

intends to propose a rule on mercury reductions in the future, the patchwork of regulations coming out of the agency reduces the certainty for electric utilities and 

their customers. It would be more efficient to discuss these proposals simultaneously 

so that we could better understand their interaction as well as the ultimate costs 

and benefits. 

Second, I am concerned that this rule will wipe out allowances that have been 

traded or purchased among the various regulated utilities, opening up the EPA to 

lawsuits for taking assets. Already we have seen the allowance values plummet in 

the SO2 and NOx markets. 

Next, I am concerned that the EPA’s preference to only allow intrastate trading 

of allowances will increase the costs to customers. One needs to look no further than 

the home States of our colleagues on this Committee to see this disparity. Senator 

Voinovich’s State of Ohio will end up with allowance costs far greater than those 

of Senator Sanders’ utilities in Vermont. If these allowances were able to be traded 

across State lines we could see the evolution of a more efficient market and lower 

costs overall. 

I am also fearful that the EPA’s rule will face legal challenges on the basis that 

it may not be in compliance with the 2008 ruling reinstating the Clean Air Interstate Rule. The continued legal and regulatory back and forth has resulted in a very 

uncertain regulatory environment for our Nation’s electricity providers, and it is 

time to move forward on a path to certainty. 

My concerns lead me to believe that this EPA action is even more reason for Congress to pass the Carper-Alexander legislation that would establish a national program with stronger permanent reductions in SO2 and NOx emissions and eliminate 

90 percent of mercury emissions. 

The bipartisan Clean Air Act Amendments of 2010 is cosponsored by 6 Republicans, 8 Democrats, and an Independent Senator. We have worked hard to provide 

a program that is nationwide, provides strong targets for emission reductions, and 

establishes an allowance and trading system that keeps costs down. 

The legislation puts strict limits on three noxious emissions—sulfur dioxide, nitrogen oxide, and mercury—that are produced when we burn the coal which provides 

50 percent of our Nation’s electricity. These pollutants affect the health of millions 

of Americans. The Environmental Protection Agency (EPA) estimates that 24,000 

premature deaths a year from lung diseases are caused by coal pollution. Fortyeight States have issued fish consumption advisories due to mercury pollution, covering 14 million acres of lakes, 882,000 river miles, and the coastal waters of 13 

entire States. 
243 

Our legislation will also direct the EPA, for the first time, to reduce mercury 

emissions by at least 90 percent no later than 2015. By 2018 our bill will cut SO2

emissions by 80 percent from current levels and by 2015 will cut NOx emissions by 

53 percent from current levels. That should save more than 215,000 lives and more 

than $2 trillion in health care costs by 2025 according to EPA’s analysis. It will combine stronger national standards on these two pollutants with existing emissions 

trading systems so the market will determine the cheapest way to reduce emissions. 

The original trading system imposed on sulfur emissions in 1990 has cut emissions 

in half while the real cost of electricity at the same time decreased. The first estimates of the cost of our bill by the EPA and a recent study on mercury control technologies by the General Accounting Office show that the new standards in our bill 

will equal an increase of about $2–$3 per month on the average Tennessean’s utility 

bill. 

I fear that the EPA’s Transport Rule and an expected EPA rule on Hazardous Air 

Pollutants such as mercury will be more expensive for the country and yield more 

modest emissions reductions than our bill. 

As has already been stated this rule is over 1,000 pages, and we are just beginning to understand it. I look forward to learning more from our witnesses today regarding the costs and benefits of this proposed rule and will focus my questions on 

a comparison with the bipartisan legislation authored by Senator Carper, me, and 

14 other cosponsors. 

Senator Carper and I have introduced clean air legislation every session I have 

been a Senator. We have a better chance to succeed this year because of stronger 

bipartisan support, more public understanding of the dangers of emissions, and improved technology for controlling these pollutants. Bipartisan support for the Clean 

Air Act Amendments shows that when it comes to air pollution we can find a way 

forward, and the American people will all be better for it. 

Senator CARPER. We will have two rounds of questions, 5 minutes each. I want to go back, the first question, just to go back to 

a point raised by Senator Voinovich. I think it is one of the most 

important issues that we are going to discuss today. 

On page 2 of your testimony you talk about how the proposed 

Transport Rule would prevent 14,000 to 36,000 premature deaths 

annually. And you suggest that the health and welfare benefits 

could be quantified. And you put a range on it, $120 billion to $290 

billion annually. That is annually in 2014. 

Ms. MCCARTHY. That is correct. 

Senator CARPER. And you go on to say that the benefits will far 

outweigh the estimated annual cost of $2.8 billion. I want my colleagues—and I am going to ask Senator Voinovich, I am just going 

to ask you if you could just bear with me here on this one point. 

You raised the issue of cost-benefit; great question. It is one that 

we have to be focused on. And in the testimony that we have 

heard, in the year 2014 the range of the benefits anywhere from 

$120 billion forecast to as much as $290 billion. 

Let’s take the low end of that range. Let’s say it is not even the 

mid-range. Let’s say that it is $120 billion. It is not $290 billion, 

it is $120 billion, the low end of the range. The costs that were projected were for the $2.8 billion. Let’s say that is low. Let’s say it 

is actually $3 billion. 

And what I want you to do is sort of using that information, talk 

to us about the cost-benefit of doing this. We are not interested in 

doing something, or taking an approach where the costs just are 

out of sight and really inconsistent with the benefit. Just talk to 

us about why this is important. 

Is it just 1 year? Do the numbers—going forward, do the numbers get worse in terms of the cost-benefit? Or do they get more 

favorable? Share with us. This is an important point. 
244 

Ms. MCCARTHY. It is an important point. Let me just clarify, to 

begin with, that the standards that we set under the National Ambient Air Quality Standards are health-based standards. But costbenefit analysis is always applied in the implementation of those 

standards. And the Transport Rule is the implementation of a variety of NAAQS standards to try to address upwind contributions. 

When we apply cost-benefit analysis what we see here is overwhelming public health benefits. Just to express that a little bit 

more specifically, we are talking about in 2014 avoiding 14,000 to 

36,000 premature deaths, 21,000 cases of acute bronchitis, 23,000 

cases of non-fatal heart attacks, 26,000 hospital and emergency 

room visits. I could go on and on. And those benefits translate into 

at least $120 billion annually. Those costs begin in 2014, and they 

continue every year. 

To compare that with the cost of this bill, the costs associated with this bill are $2.8 billion. It is not even close. This bill is overwhelmingly beneficial when you do it from traditional cost-benefit 

analysis. The simple reason for that is that there are very cost effective reductions available to us in the power sector that we 

should have taken advantage of many years ago. But we have not, 

and we plan to now. I think this is a reasonable and cost effective 

approach. 

Senator CARPER. Let me follow up with this, if I could. 

When you analyze the impacts of this rule, what they might have 

on fuel use, the impacts on plant closures, the impact on electricity 

prices, do you see any significant changes over current status in 

those particular areas, please? 

Ms. MCCARTHY. We have looked at all of those issues. What we 

know is the average electricity prices could increase somewhere 

less than 2 percent. Our estimate is about 1.5 percent. That would 

be by 2014, which means if you pay $100 now in your electric bill, 

you could pay $1.50 more. And our natural gas prices will increase 

less than 1 percent by 2014. And we don’t see significant shifting 

away from the use of coal, although there will be some shifting to 

cleaner coal use. 

The simple fact is that as we looked at these reductions in detail 

we not only did a cost-benefit analysis, but we factored costs into 

decisions in terms of where the most, the highly most cost effective 

reductions could be achieved. There are many of them in the power 

sector. 

So we have an ability to get highly cost effective reductions 

there, and they provide tremendous public health benefits without 

significant impacts to consumers on electricity prices, but significant public health benefits. 

Senator CARPER. Good. 

My time is expired. 

Senator Inhofe. 

Senator INHOFE. Thank you, Mr. Chairman. 

As I said in my opening statement, Ms. McCarthy, the concern 

I have, a lot of concerns I have are on uncertainty. Just now I 

wrote down what you said, and they said that was also in your 

printed statement. You said, we supply the power industry with a 

clearer picture as to what to expect over the next 10 years. That 

is what I would like to achieve. Predictability is the problem. 
245 

And I know that we go through this discussion all the time. 

While I agree with Senator Voinovich in his concern over how we 

can and how we cannot use cost-benefit analysis, nonetheless there 

is a cost to this stuff. Anything that we are doing and any level 

of uncertainty in the power industry is going to be paid for by everybody in this room. We are the ones who are going to have to 

be absorbing this. 

So I would start off by, how do you think the Transport Rule provides certainty to the regulated community? If you could comment 

to that. 

Ms. MCCARTHY. Senator, thank you for asking the question. I 

share your goal of trying to understand what the rules are that are 

moving forward and how they could impact the power sector, particularly to ensure that we continue to have a reliable and affordable energy supply. 

The best thing that I thought that we could do with this Transport Rule, which is what I think we accomplished, is to make it as 

legally defensible as we possibly could, to listen to the Court carefully and then to use as much of our technical ability as we could 

to identify the lowest cost opportunities to achieve the reductions 

we need not for the emission reductions but for the air quality impacts. 

So what you have here is a rule that is legally defensible, that 

we believe will—even though we expect it to be challenged—will 

hold up in court. We think it is a smart rule and it is cost effective. 

Senator INHOFE. First of all, would one of the staff hold up the 

chart that Senator Voinovich used there? This chart assumes that 

there is no litigation. That would have to be added on to all of 

these timelines that are in there. I am in a kind of position where 

I would say I don’t think it is going to be litigated. I don’t think 

it is. I know it is. This is going to happen. With the Bush administration’s CAIR rule, that litigation took almost 3 years to get resolved. 

Is there any way that you can guarantee that litigation this time 

around will be dealt with more expeditiously? We know it is going 

to happen. But is there anything that you can think of that is going 

to be different now in terms of the litigation that we know is going 

to come? 

Ms. MCCARTHY. I fully expect that it will be litigated. I think the 

difference that I am trying to point out is I think it adheres much 

more closely to the requirements in the Clean Air Act. I think it 

is much more tied to the ability to achieve the air quality reductions that the Clean Air Act is requiring. 

Senator INHOFE. In my State of Oklahoma—it is included among 

the States in this Transport Rule. It wasn’t under the CAIR rule. 

The EPA apparently included Oklahoma in the summer ozone season due to transport from the Dallas-Fort Worth areas and the impacts from that. The EPA modeling shows that approximately two 

parts per billion impact from transport on the Dallas-Fort Worth 

area. Yet your slide show of the Transport Rule indicates that Dallas and Fort Worth will be in attainment with the 1997 ozone NOx

of 80 parts per billion by 2014 even without the Transport Rule. 

I have a couple of charts; they are not large enough to use, but 

they come from the EPA, and you are very familiar with them, 
246 

showing where we are going to be with and without. So my question is, why would you include Oklahoma in the summer season regime if Dallas-Fort Worth will get into attainment even without 

the Transport Rule? 

Ms. MCCARTHY. My understanding, Senator, is that there are 

three States that actually were added into the transport region 

that will be impacted by this rule. Oklahoma is clearly one of them. 

If I could just step back, one of the ways in which we had to address the Court’s challenge back to us was to very clearly articulate 

what significant contribution means for an upwind State in terms 

of the ability for downwind States to both achieve air quality reductions that are required as well as maintain them. My understanding is that for Oklahoma it wasn’t a very close call in terms 

of the ozone level. 

Senator INHOFE. You say it was not? 

Ms. MCCARTHY. It was not. One percent is what we are using as 

a threshold for significant contribution. And Oklahoma actually 

does contribute to the air quality impacts associated with Dallas. 

So we are asking Oklahoma to pay its fair share and contribute to 

the relief of that downwind State in that area. 

Senator INHOFE. OK, my time has expired, but what are the 

other two States? You said it impacted three States. 

Ms. MCCARTHY. Nebraska and Kansas. 

Senator INHOFE. Thank you, Mr. Chairman. 

Senator CARPER. Thank you. 

Senator Cardin. 

Senator CARDIN. Thank you, Mr. Chairman. 

In the interest of continuing this bipartisan cooperation, Senator 

Inhofe, we have blown up that one chart. So if you need it blown 

up, you can certainly use our copy. Just want you to know we are 

all working together on this. 

But it is the same point; I guess I want to take it from a little 

bit different angle. I certainly support what EPA is trying to do 

with these transport rules. I certainly support what Senator Carper 

is trying to do with congressional authority. And I think certainty 

is an important issue here. Having clear authority under the Clean 

Air Act would also, I think, help in certainty. 

I come at this, though, from a little bit different angle. That is 

if the new Clean Air Transport Rules go into effect, and we achieve 

what we expect to be able to, there still will be gaps, including in 

my State of Maryland. There will be counties struggling to maintain attainment. Baltimore City, Anne Arundel County just south 

of Baltimore City are two counties that EPA projects will struggle 

to maintain air quality attainment. 

My point is, what else do we need to do either through the regulatory authorities that EPA currently has or through congressional 

authority or action? What more do we need to do in order to be able 

to achieve what science tells us we should achieve to protect the 

health of the people of our community? 

Ms. MCCARTHY. Senator, let me respond first by telling you that 

I share your interest in making sure that we actually, through 

these measures, achieve the air quality reductions that the Clean 

Air Act requires. I think we did our best in this Transport Rule to 

make it very clear that in the interest of getting the rule out in 
247 

a timely way and capturing the reductions that we knew were 

going to be available to us in 2012, that we put out the best rule 

that we could on the basis of the modeling that we had the time 

and the technical expertise to run. 

What we did find was that on the NOx reductions there would 

need to be additional NOx reductions, clearly, to get into compliance with the 1997 standard because there are two areas, as you 

say, that still remain in non-attainment, even with these reductions. 

But we also acknowledge that we are working very hard at updating an ozone standard. As a result we have made a commitment 

that we will look at additional NOx reductions when we see a 

NAAQS standard is being revised. Because too often when the 

NAAQS standards have been revised we have put considerable 

pressure on each State to develop plans for attainment, but we 

haven’t put commensurate pressure on the upwind States to contribute to that attainment challenge. And this is a model to be able 

to do that. And it is a clear commitment from EPA that we are 

going to also seek additional NOx reductions. We wish we had been 

able to do more with this rule. 

But given the time constraints that we had what we best did was 

achieve the reductions we thought we could as quickly as we could 

and put the challenges out there. We have asked for comments on 

how we could do better with these rules. We have asked for comments on the structure of the rule. And we have made a commitment that we need to do more; we know we need to do more, and 

we will. 

Senator CARDIN. And I support your response. It is clear to me 

that you do have that authority under the Clean Air Act to take 

additional steps provided you follow the process that the Court has 

indicated needs to be followed. And you have the documentation to 

demonstrate the results that can be obtained. 

I know that Senator Carper in his efforts wants to make sure 

that although we give you clear guidance and we have some predictability we don’t want to undermine the authority of EPA to act 

under the authority under the Clean Air Act itself. I will welcome 

your thoughts as we go through this legislative process, particularly as it relates to NOx, that yes, we want to make legislative 

progress here, but we don’t want to undermine your authority to 

do what you are required to do currently under the Clean Air Act. 

Ms. MCCARTHY. Thank you, Senator. I guess the big challenge 

for us is that emissions reductions are welcome when they are cost 

effective. But the real challenge for us is the ultimate air quality 

that we are actually producing for the American people. 

Senator CARDIN. Absolutely. I agree with Senator Voinovich. This 

is clearly, I think it is required by the courts anyway. But it is certainly a part of the process here. 

Thank you, Mr. Chairman. 

Senator CARPER. Thank you, Senator Cardin. 

Senator Voinovich. 

Senator VOINOVICH. Thank you. 

Mr. Korleski is going to be testifying in the next panel, but I 

would like to get your reaction to a paragraph in his testimony. 

‘‘Next, we are concerned with the concept that each time USEPA 
248 

promulgates a new, more restrictive air quality standard, USEPA 

intends to revise the Interstate Transport Rule by changing the 

emission budgets.’’ 

We have two main concerns with this approach. First, we expect 

that at some point it will be difficult or impossible to develop and 

implement technology that can achieve the new, more restrictive 

budgets. Second, the regulated community must have some degree 

of certainty to timely plan investments and controls, fuels and operations at generating facilities in order to achieve necessary emission levels by the relevant deadline. We would recommend that 

anything USEPA promulgates for an emission sector would not 

change for at least 10 years, and then only if USEPA demonstrates 

that additional controls are technically achievable and cost effective. 

How do you respond to what Mr. Korleski says here in his testimony? 

Ms. MCCARTHY. First of all, Senator, I would like to tell you that 

the next panel is represented by four close colleagues of mine, one 

of which is Chris Korleski. I respect his judgment tremendously. 

We are close colleagues. 

What I would suggest to you is that what we are doing in the 

Transport Rule is I believe doing what the courts tell us we must 

do under the Clean Air Act and what we believe we must do under 

the Clean Air Act. I think Mr. Korleski is providing you with his 

understanding of what he believes would be a better approach to 

that. But what we do in the Clean Air Act is on a 5-year basis 

where we are obligated to look at the National Ambient Air Quality 

Standards, identify those standards, and then if reductions are necessary to achieve those, we are required to implement them. 

I don’t believe that the addition of the Transport Rule, which is 

really an obligation to address the upwind States’ contributions, 

would do anything but fill in what has been a gap in the system 

in terms of how we have implemented the Clean Air Act. But Mr. 

Korleski is clearly sending Congress a signal that he would prefer 

a different approach. 

Senator VOINOVICH. I think we would recommend any budget 

USEPA promulgates for an emissions sector would not change for 

at least 10 years, and then only if USEPA demonstrates that additional controls are technically achievable and cost effective. I think 

that gets at the whole issue of this business of uncertainty about 

where are we going. 

Ms. MCCARTHY. The only thing I would clarify, Senator, is that 

EPA has made a commitment to using this model that we are proposing, when it is finalized, and that it is a good model to get at 

upwind contribution. Not every NAAQS might require that. But we 

are obligated to take a look at it. 

And the last issue I would indicate is that over the 40 years of 

the Clean Air Act I think one of its major values has been that it 

has not waited for technologies to be available to achieve required 

air quality reductions but has driven those technologies forward. 

The Clean Air Act has really pushed the envelope in terms of developing new technologies that are now readily available, that now 

offer cost effective opportunities. Those are very technologies we 

are looking to take advantage of in this Transport Rule. 
249 

Senator VOINOVICH. That is interesting, and I don’t have the history of it, but I am going to look into it. When AEP put on a scrubber in 1992 or 1993, when I was Governor, at a cost of $650 million, the technology was there for them to do that. That is one of 

the big hang ups I have with EPA and many other people, is that 

the technology—for example, for greenhouse gas emissions—is not 

available today, not commercially deployable. If you are going to 

ask somebody to meet a standard, the technology ought to be there. 

What happened was, it was, and you guys mandated that it take 

place. 

But it wasn’t, for example, you are talking about some new rulemaking based on MACT rulemaking. One of the things that we are 

all concerned about here is that we have the feeling that EPA is 

going to go in and look at other pollutants as it moves forward. The 

issue is, are they going to study whether or not these things really 

are making a difference, and are they going to have alternative 

control strategies, or are they just going to come down and say, 

here it is, and you do it. We run into this almost everywhere we 

go. It is, well, we have these MACT standards, back with the 

Water Act. They mandated MACT standards, and all hell broke 

loose in the country. 

Then we came back, and we amended the Water Act to say that 

if the technology that you have is getting the job done, that is fine. 

But the EPA said, they originally said no, you have to do this 

other. And in many instances, what they asked them to do was 

more expensive than the property values in the town that they 

were asking them to do it. It is a reasonableness thing that comes 

into play here. 

Ms. MCCARTHY. I appreciate that, Senator. I know there is a lot 

of concern in particular about the utility MACT standard which we 

are planning to propose under a court timeline next spring. But I 

will assure you that the MACT standards are based on already 

available and in-use technologies. There is a very serious requirement to look at costs associated with that. So we will do our best 

to balance as the Clean Air Act requires and that you are seeking. 

Senator CARPER. All right, Senator Voinovich. There will be another round for 5 minutes of questions. 

Let me kick off that second round, Ms. McCarthy, by following 

up on some comments and questions from Senator Cardin. When 

you state that the EPA plans to move forward on an additional 

Transport Rule next year to help States meet the new ozone standards that will be finalized, I think, in August, are you saying that 

EPA will be looking to tighten the seasonal ozone cap, the seasonal 

ozone cap and not the annual NOx cap? 

Ms. MCCARTHY. That is correct, Senator. 

Senator CARPER. Thank you. 

In your statement, you mention that there will be limited trading 

allowed under the Transport Rule. If a utility has any banked sulfur dioxide or nitrogen oxide credits from the old CAIR program or 

from the acid rain program, can they be used under this new system that you have envisioned? 

Ms. MCCARTHY. The Court was pretty clear to us, Mr. Chairman, 

that the title IV SO2 allowances associated with the acid rain program cannot be used as currency to achieve compliance with the 
250 

Transport Rule. Concerning the CAIR NOx allowances, our proposal is that those allowances also not be used as currency in this 

program, but we are taking comment on that. The main concern 

with that was making sure that there was no legal vulnerability 

in the rule. Those allowances benefited by the fuel adjustment factor. They were based on the fuel adjustment factor. That was determined to not be legally defensible by the Court. 

So we felt that the most appropriate decision to make was to listen to the Court and to abide by that as closely as we could. 

Senator CARPER. You talked earlier in your opening statement 

about trying to find a way for regulation to work with legislation. 

Is that an area where perhaps that could be brought to bear? 

Ms. MCCARTHY. I believe that the legislation that you have proposed and the way in which you have proposed does leave us considerable opportunity to marry those two to the benefit of the 

American public. 

Senator CARPER. Just a follow-on. Are you worried about utilities 

increasing their emissions before 2012, emitting their bank, if you 

will, because the banks aren’t worth anything? Is that a concern 

that you might have? 

Ms. MCCARTHY. Could you repeat the question? 

Senator CARPER. Yes. Are you worried about the utilities increasing their emissions before 2012, sort of emitting their bank, if you 

will, because the banks aren’t worth much of anything? 

Ms. MCCARTHY. Yes. We have been watching that very closely. 

We are not seeing that that has been the trend. One of the reasons 

why we felt it was pretty important to get a rule out quickly was 

so that it wouldn’t allow backsliding. That is basically one of the 

considerations, was our 2012 targets in this rule are very much 

about making sure that we take advantage of the technologies that 

have been put in place as a result of CAIR phase one and that 

those technologies be run as much as they can so we can take advantage of those inexpensive reductions. 

Senator CARPER. You may have responded to this question, but 

I want you to do it again, if you have. Will companies or will utilities be able to bank emissions in the future? 

Ms. MCCARTHY. Yes. 

Senator CARPER. OK, thanks. Those were my questions. 

Senator Inhofe. 

Senator INHOFE. I just have, for clarification on the issue that I 

brought up, it appears to me, and as I am looking at this chart, 

as to what is going to happen without the proposed Transport Rule, 

you are familiar with this chart, that the Dallas-Fort Worth area 

will come into compliance with the 1997 ozone NAAQS without the 

significant contribution you referred to of Oklahoma and you are 

requiring with this Transport Rule. 

Now, at least according to the chart, why would we go, why 

would you be listing Oklahoma, or counties in Oklahoma, if they 

are going to be in compliance without the rule? I don’t understand 

that. 

Ms. MCCARTHY. Senator, I apologize if I don’t have all the information that I need to provide you the best answers. But let me give 

you my understanding. That is that the courts told us one of the 

deficiencies of CAIR was that it first of all didn’t look at contribu-
251 

tion as well as it needed to State by State. But it also didn’t look 

at the issue of maintenance. Because there are two obligations of 

upwind States. One is that you don’t contribute to non-attainment, 

and second that you don’t make it more difficult for a downwind 

State to maintain their attainment. 

My understanding is that in an effort to respond to the courts 

we established a significance threshold for both States that contribute to non-attainment and to address this maintenance issue. 

My understanding is that the State of Oklahoma does have an impact downwind in the Dallas area because it makes it more difficult 

for that area to maintain compliance with the NAAQS even if it is 

currently in attainment. 

Senator INHOFE. OK, now explain to me how this happens, then. 

I am not familiar with your modeling. You have come to some conclusions that I sit here and I wonder. We are talking about ozone; 

we are talking about the summertime. And where we have nothing 

but south winds. How does Oklahoma make this contribution? 

Ms. MCCARTHY. Senator, again, I’ll be happy to sit down and our 

technical staff can walk through it. But our air quality modeling 

looks fully at all meteorological data. And it is very sophisticated. 

In the effort to do the work we needed to do for the courts to both 

identify contributions for non-attainment and for maintenance, we 

actually looked unit by unit at every power plant in the country. 

We looked at what obligations they had, what State obligations 

they had. We identified where we thought the reductions needed to 

be achieved upwind so that States could just look at their in-State 

compliance requirements and we could take care of some of those 

upwind challenges that they were facing. 

In your area, my understanding is that in looking at that in detail, that Oklahoma units would challenge Dallas in terms of their 

ability to maintain compliance because of emissions that were 

being generated there that would be contributing to—— 

Senator INHOFE. In Oklahoma? 

Ms. MCCARTHY [continuing]. Dallas, to the Dallas area. 

Senator INHOFE. I am seeing behind you, you are flanked by a 

lot of people who I am sure know a lot more about this than I do. 

But when I am asked that question, I go back to the State of Oklahoma. What I would like to get from you is, for the record, is something that I can look at and analyze, see if I agree with it, and if 

not, call you up, and then something that I can pass on and explain. Because right now I am not able to do that. 

So if we could do that, and let us kind of get into the weeds on 

this thing, that would be helpful. 

Ms. MCCARTHY. I think that would be great. One of the reasons 

why we have a good comment period on this is that I am sure other 

States are going to have similar questions. We certainly want to 

know that we have done the right technical modeling to make the 

right decisions. 

Senator INHOFE. That is fair enough. Thank you. 

Senator CARPER. Thank you. 

Senator Voinovich. 

Senator VOINOVICH. One of the things that I am doing is we are 

negotiating with Senator Carper right now on this legislation. And 

trying to see just what all the facts are. But I am going to read 
252 

you from this paper that was done by American Electric Power. Assuming the proposed rule goes final a little less than a year from 

now, i.e., EPA’s current schedule is spring of 2011, phase one of the 

program would allow only a little more than 6 months in total to 

implement the new emission budgets, establish emission trading 

programs, and for companies to make the needed investments to 

comply with these limits. Six months, let alone a year or 2, is not 

nearly enough time for this. 

Having a brand new emission cap, State budgets and allowance 

allocations in 2012 creates major logistical challenges for the electric power sector and for the States that must implement the programs. Companies will not have sufficient time to design, permit, 

fabricate, and install emissions controls that may be necessary for 

meeting the new reduction requirements. 

Moreover, additional time is necessary to coordinate installation 

of major pollution control equipment during spring and fall outage 

schedules to ensure reliability of the entire utility system. While 

the EPA claims that phase one will require little investment in the 

way of new controls, its assumption is predicated upon high level 

modeling and not the actual physical, contractual, and financial 

constraints at these facilities during such a short timeframe. 

We are talking now about numbers, NOx, SOx, mercury, and if 

you are going to take the numbers and agree to them, then it 

seems to me that you need to talk about implementation of how 

long it is going to take for this to be put in place. What is your 

reaction to what they have suggested here in terms of this Transport Rule and the timing needed to get the job done? 

Ms. MCCARTHY. Senator, I think we need to look at the comments when they come in to the Rule. So I appreciate that people 

could differ in terms of whether or not they think the timing is too 

tight. But my understanding is that the reductions we are looking 

to achieve in 2012 are primarily based on running the equipment 

that has already been invested in and that we believe will be installed and in place as a result of phase one of CAIR. 

So we really were looking at 2012 as locking in the investment 

that have already been made and should be in place and 2014 as 

a second opportunity to achieve some additional SO2 reductions, 

which will require investments. But that time line should provide 

an opportunity for those investments to be fully made and for companies to be able to comply. 

We did also in the rule indicate that we would love to have 

States come in to us and indicate how they would like the State 

allocation to be made, which gives an opportunity for a closer look, 

unit by unit, at where these investments have been made and what 

kind of reductions can be expected. We do allow a little bit of inState trading as well. So there is an opportunity there. 

And I guess the last issue, Senator, is if any facility believes that 

they are in good faith trying to comply as best they can and cannot 

achieve that compliance, there are always opportunities for us to 

enter into consent agreements that will acknowledge real barriers 

that they may be facing, and take care of it in that way. 

Senator VOINOVICH. I have been watching the face of Mr. 

Korleski during your testimony. Mr. Korleski, you have listened to 

that, and I am expecting you when you come up to respond. 
253 

Ms. MCCARTHY. I am sure he will be as nice to me as I was to 

him. 

[Laughter.] 

Senator VOINOVICH. You are both good friends, but there seems 

to be some difference of opinion. I know for example, EPA has assumed that AEP will have scrubbed its 585-megawatt Muskingum 

River Unit No. 5 in Ohio by January 1st, 2011, or only 6 months 

from now. However, while preliminary engineering was begun several years ago there is no ongoing construction activity associated 

with this retrofit project. 

Even with engineering and construction recommended today, the 

actual in-service date for the scrubber would still be at least 3 

years from now. As such, the EPA assumption that this unit would 

be scrubbed by 2011 is completely infeasible and inaccurate. That 

is what they have to say about it. 

So there is some real difference of opinion here about how fast 

the technology is, how much it will cost, how much time it is going 

to take. It seems to me if we work something out there is going to 

have to be some compromise on both sides in terms of the numbers, 

as to the reduction in emissions and also the timeline that you put 

in to get it done. Or, the alternative is, let’s just keep what we 

have been doing for the last 12 years: lawsuits, delays, what the 

ambient air standards in 1997 just finally went in. There has to 

be some kind of meeting of the minds if we expect to get it done. 

My experience has been over the years—we could have done a 

3-P bill 6 years ago. But the environmental groups, they wanted 

four Ps. If you don’t have four Ps, we won’t go with three Ps. The 

Adirondack Council comes along and says—and Senator Clinton 

was there at the time—hey, let’s do the three Ps. We can get started reducing NOx, SOx, mercury. It will help us in the Adirondacks, 

the Smoky Mountain people came in and said, hey, that is going 

to help us. Oh, no, we didn’t get it done. So we just meandered 

down the stream, lawsuit after lawsuit after lawsuit. It is not good 

for anybody. 

But the real issue is—— 

Senator INHOFE. Only the attorneys. 

Senator VOINOVICH. Oh, yes, the attorneys make a lot of money, 

sure. But anyhow, the point is that these are some practical things 

that I think we have to deal with if we expect to get some kind 

of meeting of the minds. I won’t be happy, maybe Senator Carper, 

you may not be happy. Utilities won’t be happy. But I think it is 

worth it to try and get it done. 

Senator CARPER. Thank you very much. That is a good note to 

end on. We have a lot at stake here. I think there is good will on 

all sides. Let’s make as much progress as we can. 

I appreciate the spirit that I think everybody’s participated in 

today. Thank you so much for coming today. Thank you not just 

for your testimony but for the work that has taken place to led up 

to this day as we try to find a way where regulation and legislation 

can lead to the kind of cost effective results that we all want. 

Senators will have 2 weeks to submit questions to you in writing. 

We ask that you respond as promptly as you can so we can publish 

our hearing in a timely manner. With that having been said, you 

are excused. Again, thank you so much for joining us. 
254 

Ms. MCCARTHY. Thank you so much, Mr. Chairman. 

Senator CARPER. And I would invite our second panel to come 

forward. While they are coming forward, I am looking at the clock 

up here. As much as I would like to ask the President to wait until 

I get there to sign this legislation, he is probably not going to be 

inclined to do that. They are going to kick off the signing ceremony 

about 11:25. And we are not going to have a police escort going to 

the White House. So we will have to move along here smartly. I 

am anxious to hear the testimony of each of our witnesses. 

I am going to go ahead and start the introductions, if I could. 

First of all, Jared Snyder, Assistant Commissioner of Air Resources, Climate Change and Energy, at the New York State Department of Environmental Conservation. Good morning and welcome. Mr. Chris Korleski, Director of the Ohio Environmental Protection Agency. We have a couple of Buckeyes up here at our side 

of the table, Senator Voinovich and myself. Whenever we have 

folks come in from Ohio, I usually start off in introducing them by 

saying two letters, O-H, and see what they say in response. 

Mr. KORLESKI. I-O. 

Senator CARPER. That is good. That is good. 

Eric Svenson, Vice President of Environmental Health and Safety at PSEG. Delighted to see a neighbor across the Delaware River. 

Happy you are here. 

Finally, Conrad Schneider, Advocacy Director for the Clean Air 

Task Force. We are happy to see you today. Thank you for coming. 

Again, we would ask you to limit your statements to about 5 

minutes each. The full content of your written statements will be 

included in the record. 

With that, Mr. Snyder, you are recognized. Please proceed. 

STATEMENT OF JARED SNYDER, ASSISTANT COMMISSIONER 

FOR AIR RESOURCES, CLIMATE CHANGE AND ENERGY, NEW 

YORK STATE DEPARTMENT OF ENVIRONMENTAL CONSERVATION 

Mr. SNYDER. Thank you, Senator Carper. 

Good morning, Senator Carper and members of the Subcommittee. I am Jared Snyder. I am the Assistant Commissioner 

for Air, Climate Change and Energy at the New York State Department of Environmental Conservation. 

I have been involved in efforts to reduce transported air pollution 

for approximately 15 years, first as an attorney for New York, then 

in my current capacity as a policymaker. Based on that experience 

I can say that as a result of your leadership, Senator Carper, and 

the hard work of EPA over the last couple of years, the forecast for 

clean air is much brighter now than it has been for a long time and 

certainly brighter than it was 2 years ago when I last testified before this panel. 

So I thank you for your leadership, Senator Carper, and for the 

opportunity to testify today on this important transport proposal of 

EPA’s. 

Now, even a cursory review of this proposal reveals that it is an 

improvement over the CAIR Rule. The Transport proposal requires 

substantial reductions of sulfur dioxides. Those will help in reducing fine particulate pollution through the eastern half of the coun-
255 

try. These reductions will have dramatic public health benefits, 

saving the lives of thousands of Americans annually. 

The proposal will also set specific emission caps for each State, 

requiring that each covered States reduces its SO2 emissions substantially. Because it does not allow sources to use banked emission allowances the required emission reductions will occur sooner 

under this proposal than they would have occurred under CAIR. 

This is just part of the good news. It actually gets better. Next 

month EPA will finalize a new ozone standard which will set the 

Nation on a path to having the cleanest air in decades. 

But the bad news is that there is a disconnect between those two 

actions. Although EPA recognizes that much lower ozone levels are 

needed to protect public health, it has designed the Transport Rule 

only to meet the obsolete and unprotective 1997 standard. 

I understand why EPA did that, but that is not providing the 

protection that we need. Simply put, the proposal will do very little 

to address the elevated levels of ozone that still plague the eastern 

half of the country. 

To its credit EPA does commit to a second transport rule, but 

more is needed now. This summer so far has provided irrefutable 

evidence in the forms of dozens of exceedances of EPA’s ozone 

standards across the eastern half of the United States. Over the 

July 4th weekend in New York alone, we saw 27 exceedances of 

that 2008 standard. And that standard is more lenient than the 

one that EPA is announcing next month. So more NOx reductions 

are needed. 

Now, we know from experience that control of NOx emissions 

from the power sector is one of the most cost effective ways of reducing ozone levels. And we know now that the technology and 

labor resources are available to achieve those reductions now. For 

New York and other States burdened by elevated ozone levels this 

is a very important issue. Once EPA finalizes the new standard 

next month, we will have our work cut out for us in meeting this 

standard by the statutory deadlines. 

In the Northeast we have harvested the low hanging fruit years 

ago. Like Maryland, New York has reduced NOx emissions 80 percent from the power sector over the last decade and a half. And although we have already implemented dozens of strategies to reduce 

ozone levels in the Northeast, we are going to have to dig even 

deeper to meet the new standard, requiring the implementation of 

ever more costly standards. 

But under no circumstances will we be able to meet a new, tighter standard without substantial regional reductions from the power 

sector as well as the implementation of other regional and national 

programs. 

We have urged EPA to address this important issue now in its 

Transport proposal. We had hoped that EPA would base this proposal on the 2008 NAAQS. Now, EPA has another option available, 

which is basing the final rule’s emission reductions when this rule 

goes final on the ozone standard that it will adopt next month. 

EPA’s alternate path forward, a second transport rule, will eventually result in the reductions needed if all goes as planned. But 

as I explain in more detail in my written testimony that will in-
256 

volve a substantial delay during which the adverse health effects 

will continue. 

We believe that those reductions can be achieved within the next 

2 years. The technology is available. And those reductions will also 

have benefits; greater NOx reductions will have benefits that greatly exceed the cost. So we look forward to working with EPA to accelerate the reductions needed to enable us to meet the ozone 

standard. 

Thank you again for the opportunity to testify. 

[The prepared statement of Mr. Snyder follows:] 
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Senator CARPER. Thank you, Mr. Snyder. Good to see you, 

thanks for your testimony and for working with us. 

Chris Korleski, please proceed. Welcome. Your entire statement 

will be made a part of the record. 

STATEMENT OF CHRIS KORLESKI, OHIO ENVIRONMENTAL 

PROTECTION AGENCY 

Mr. KORLESKI. Good morning. I am Chris Korleski, Director of 

the Ohio EPA. I would like to thank the Chairman, Ranking Member, and all the members of the Subcommittee for the opportunity 

to discuss the proposed Interstate Transport Rule. 

First, I do—just in light of Senator Voinovich’s comments, Mr. 

Chairman, I do want to commend USEPA in general and Gina 

McCarthy. I do have the greatest respect for Gina McCarthy. She 

works very hard; we are good friends, and I commend them for the 

work that they have done here. 

Senator CARPER. We will note that in the record. I saw members 

of her staff writing that down. 

[Laughter.] 

Mr. KORLESKI. As you know, the Clean Air Act requires States 

to develop approvable State Implementation Plans, SIPs, which set 

for the emission reduction measures that States will implement to 

achieve attainment within the NAAQS and address the transport 

of air pollutants downwind from upwind States. This now soon to 

be moribund CAIR served as an integral component of Ohio’s plans 

to achieve necessary reductions in NOx and SOx from power plants. 

Without question the NOx and SOx emissions under CAIR would 

have greatly assisted Ohio and other States in attaining the standards for both PM and ozone and in addition were an essential component of USEPA’s plan for addressing regional haze. 

Before I go into detail about the Interstate Transport Rule, it is 

very important that the panel be aware of the significant progress 

that Ohio has made in achieving ambient air quality standards. In 

the late 1970s the highest 8-hour ozone values we were measuring 

were over 140 parts per billion. Now, the worst sites in the States 

are in the range of 80 parts per billion. Currently the entire State 

is designated attainment for the 1997 ozone standard of 84 parts 

per billion, something that was unthinkable even 5 or 6 years ago. 

This progress has come primarily as a result of the hundreds of 

millions of dollars invested in air pollution control equipment in 

the State. However, we also recognize that more dollars and more 

effort will be needed to meet the seemingly ever increasingly restrictive air quality standards for ozone and other pollutants as 

well. We strongly support the concept of regulating the interstate 

transport of air pollution, and therefore we supported USEPA’s 

promulgation of CAIR. 

We also understand USEPA’s mandate to address judicially recognized flaws in CAIR. As we know, recently USEPA announced 

the proposal of the new interstate Transport Rule as a replacement 

for CAIR. Now, as has been pointed out I think by everyone, due 

to the length and complexity of the proposal, and it is very long, 

my comments must reflect a first impression of the proposed rule. 

But we do have some concerns that we would like to address today. 
269 

First, we note that USEPA plans to implement a Federal implementation plan, or a FIP, for the Interstate Transport Rule. Although we understand the need for emission reductions as soon as 

possible, this concept of FIP first appears to usurp the fundamental 

right of the States to develop their own SIPs. The USEPA proposal 

goes into detail on how States are free to develop State plans as 

alternatives to the FIP, but it also makes clear that USEPA is unsure about and taking comment on the appropriate criteria for approval of these plans. 

In other words we are free to start work on our SIPs, but we cannot be certain as to their approvability until USEPA finalizes those 

criteria, which is going to take time. In our view this FIP first approach is not consistent with the spirit of cooperative federalism 

which has historically reflected how the Clean Air Act has worked. 

Second, we do not understand the significant differences in 

USEPA’s approach to the proposed budget for SO2 as compared to 

the proposed budget for NOx. Under CAIR the State budget for SO2

for electric generating units in 2010 was roughly 333,000 TPY. And 

in 2015 was roughly 233,000 TPY, that is tons per year. 

Under the Interstate Transport Rule USEPA is proposing a 

much more restricted limit of 178,000 TPY in 2014. In 2009 Ohio 

utilities emitted over 600,000 tons per year of SO2. Achieving these 

substantial SO2 reductions to meet this proposed SO2 limit will be 

a difficult task in the timeframe proposed. Additional time may be 

needed. Further, additional tightening of the SO2 budget in the future may simply not be technically feasible. 

Conversely, with respect to NOx we believe that the proposed 

limits can actually be tightened. The CAIR NOx budget for Ohio 

was roughly 45,000 tons during the ozone season of 2009, dropping 

to 39,000 tons in 2015. The Interstate Transport Rule proposes a 

budget of 40,000 tons in 2012. In contrast Ohio utilities emitted 

roughly 36,000 tons in 2009, due in part to a cool summer. 

In short the 2009 NOx emissions from Ohio utilities were less 

than the proposed 2012 NOx emissions budget. It would be our 

preference to see a more restrictive NOx budget, adequate time to 

reach that lower NOx level, and most importantly, have those NOx

levels maintained for an extended time period. 

Next, we are concerned with the concept—and this is the concept 

that Senator Voinovich homed in on earlier—we are concerned with 

the concept that each time USEPA promulgates a new, more restrictive air quality standard USEPA intends to revise the Interstate Transport Rule by changing the emission budgets. To cut my 

testimony short I will just say we are concerned about continual 

changes, continual whiplash on our part and the regulated entities’ 

part due to continual changes, and that is a concern to us. 

Senator CARPER. I would ask you to go ahead and wrap it up if 

you would, please. 

Mr. KORLESKI. We continue to believe that the best approach to 

reducing SO2 and NOx emissions would include a surgical legislative fix that will allow USEPA to mandate a reasonable level of 

control and would clearly grant USEPA the authority to set up a 

more comprehensive trading program. 

I apologize for going over, and I thank you. 

[The prepared statement of Mr. Korleski follows:] 
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Senator CARPER. We very much appreciate your being here 

today. Thanks for your work. Our best to Ohio. 

Mr. Svenson, of the PSEG, please proceed. 

STATEMENT OF ERIC SVENSON, VICE PRESIDENT, POLICY 

AND ENVIRONMENT, HEALTH AND SAFETY, PUBLIC SERVICE 

ENTERPRISE GROUP 

Mr. SVENSON. Thank you very much, Mr. Chairman. 

Mr. Chairman and members of the Subcommittee, I am pleased 

and honored to appear before you today on behalf of Public Service 

Enterprise Group. 

PSEG is one of the Nation’s largest independent power producers 

with more than 16,000 megawatts of electric generating capacity in 

the Northeast and in Texas. This includes 2,400 megawatts of coalfired generation capacity and 3,700 megawatts of nuclear capacity. 

We offer the following reactions to the EPA’s draft Transport Rule, 

which we believe is essential to meet the air quality goals of the 

Clean Air Act. 

First, PSEG believes that the electric power industry can meet 

the emission caps and the timelines proposed by the Transport 

Rule. Second, we believe the Rule’s preferred approach of a cap and 

trade with intrastate and limited interstate trading provides a reasonable compliance structure given the constraints imposed on EPA 

by the D.C. Circuit Court’s opinion. 

However, we believe the program would be better served by providing for a more robust trading market and better integrating the 

program with the existing title IV SO2 allowances. We recognize 

that it might require legislation to address these issues. 

Third, regulatory certainty is critical for the electric power industry to be able to make long-term capital investments. Given the repeated litigation delays surrounding the EPA’s air regulations we 

believe comprehensive legislation limiting power plant emissions 

with a robust trading mechanism that ensures achievement of National Ambient Air Quality Standards would provide the certainty 

our industry needs to make the right investment decisions. 

So let me elaborate briefly on each of these points. PSEG’s electric generating fleet is among the cleanest in the country through 

significant investments in pollution control technologies such as 

scrubbers, SCRs and new clean generation. In the past 5 years we 

have invested more than $2 billion to improve the environmental 

performance of our generating fleet. 

As a result, we are very familiar with the technologies, the capital costs, and the logistics needed to comply with the proposed 

transport rule. Now, while the transport rule is quite complex and 

we continue to evaluate its details, we are supportive of the proposed emission caps for NOx and SO2 as well as the proposed compliance timelines. This program is essential to help States attain 

the current ozone and fine particulate National Ambient Air Quality Standards while providing substantial human health and environmental benefits as projected by EPA. 

In addition, it provides a reasonable compliance construct for updating emission caps to meet the new National Ambient Air Quality Standards. We believe that the electric power industry is capable of meeting its obligations under the Transport Rule while main-
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taining electric system reliability. The industry already has made 

substantial investments in air pollution technologies. The industry 

has excess generating capacity available to absorb the potential 

power plant retirements associated with this rule. 

And electric market operators in the industry sector have broad 

ranges of strategies available to them for reducing emissions while 

maintaining electric system reliability, including energy efficiency, 

load management strategies and the addition of renewable energy 

capacity. PSEG alone is investing over $1.25 billion in energy efficiency and renewable energy capacity. 

As I indicated earlier we do have some concerns that largely 

stem from the D.C. Circuit’s opinion. PSEG is a strong supporter 

of market-based regulatory approaches because of their cost effectiveness. We would encourage EPA to establish a robust trading 

market. 

We are concerned that some of the options proposed by EPA may 

significantly curtail the trading of allowances. Additionally, because the Rule’s preferred allocation method does not utilize existing title IV allowances, companies such as PSEG that have invested in pollution control equipment are effectively penalized as 

the value of their banked allowances are significantly reduced. 

Given the Court’s decision both of these issues may be better addressed through legislation which could restore confidence in the 

market and ensure the ongoing value of allowances. Mr. Chairman, 

PSEG was an early proponent of your Clean Air Planning Act. We 

continue to urge Congress to enact this year a market-based program that limits the electric sector’s greenhouse gas emissions. 

And we believe your proposed legislation, the Clean Air Act 

Amendments of 2010, would provide greater long-term business 

certainty than would otherwise be provided by the Transport Rule. 

So Mr. Chairman and members of this Committee, I thank you 

for the opportunity and your consideration of my comments and 

would welcome any questions you may have. 

[The prepared statement of Mr. Svenson follows:] 
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Senator CARPER. Mr. Svenson, thank you for those comments. 

Special thanks to PSEG for working with all of us on these important issues for years. Thank you so much. 

Conrad Schneider, welcome. Please proceed. 

STATEMENT OF CONRAD G. SCHNEIDER, ADVOCACY 

DIRECTOR, CLEAN AIR TASK FORCE 

Mr. SCHNEIDER. Thank you, Mr. Chairman, Senator Voinovich. 

My name is Conrad Schneider, Clean Air Task Force Advocacy Director. I appreciate the opportunity to speak to you today. 

We are based in Boston, and we have been working on cleaning 

up power plant pollution since our founding in 1996. I know you 

all have been working on that since you were Governors, as well. 

And I want to just acknowledge Senator Voinovich, whom I have 

been working with on this issue for so many years. I know he is 

retiring, and I wish him well; we all do. And I thank him and you, 

Mr. Chairman, for your persistence on this issue. 

The first thing I want to do today is bring you some good news. 

And that is regarding the substantial progress that has been made 

on SO2 emission reductions in the last 5 years. In 2004 SO2 emissions nationally were 11 million tons a year. Last year, they had 

fallen to 5.6 million tons. That is a 50 percent cut in 5 years. 

The cause? The cause was New Source Review enforcement actions by EPA and the States, effective new State regulations and 

compliance with the now-defunct CAIR rule. The economic recession did not cause these reductions. The installation of 130 scrubbers did. 

Health researchers estimate that reductions of this magnitude 

can save tens of thousands of lives a year and note that these reductions came without any noticeable increase in electric prices, 

electricity bills, switching to natural gas, and without raising any 

reliability concerns whatsoever. Let me just repeat that: these reductions came without any noticeable increase in electricity prices, 

bills, switching to natural gas, and without raising any reliability 

concerns whatsoever. 

However, continued progress is now in jeopardy because the D.C. 

Circuit struck down the CAIR Rule. Scrubbers have an operation 

and maintenance cost, so utilities will not run them unless they are 

required to do so. So without the Transport Rule, emissions will go 

up. 

But even at today’s pollution levels tens of thousands of American lives will be cut short, and there are still over 700 coal units 

that do not have scrubbers. It is high time for every coal plant in 

the U.S. to be well controlled. That is why it is so important for 

EPA to strengthen and finalize the Transport Rule. First, it will 

lock in the gains that we have seen over the last 5 years. But second, it goes further in 15 States and brings many if not all States 

into attainment. 

Senators Carper and Voinovich, as Governors, you used to see 

maps in which your States were full of red, full of red non-attainment counties like the one that is shown on the screen here. But 

under the Transport Rule proposal almost all the red is gone. With 

some tightening of the Transport Rule it looks like EPA can get the 

red out completely. Senator Carper, I would urge you to insist that 
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EPA provide you a comparable map for your bill to see what it 

would do with respect to attainment in these same areas. 

At a minimum EPA should complete the analysis it has begun 

relating to persistent non-attainment areas like Cleveland, Chicago, Houston, Baton Rouge, and New York City, requiring upwind 

controls to potentially solve these areas’ problems and save many 

more lives. As the proposed rule would only require 14 gigawatts 

of additional scrubbers, and the benefits outweigh the costs 50 to 

1, there is much more than can be done. 

In addition we agree that EPA should tighten the NOx cap in the 

east. These additional controls will be required to put those areas 

within striking distance of attainment. 

We do not support the so-called fix proposed by Mr. Korleski. 

Note that the old war between the States, that is between the 

Northeast and the Midwest, is largely over. All States have realized that their pollution contributes to their neighbors’ non-attainment. And Ohio is one of the biggest beneficiaries, if you see this 

particular map, in which 1,300 lives are saved per year, the most 

next to Pennsylvania. 

In addition to supporting EPA’s strengthening and finalizing the 

Transport Rule, we support passage of S. 2995, the Clean Air Act 

Amendments of 2010, sponsored by Senator Carper, you and Senator Alexander. We have long favored a comprehensive legislative 

solution of the problem of power plant pollution. We recognize that 

in producing the Transport Rule, EPA has done a good job of navigating the mine field laid for it by the D.C. Circuit. But we know 

that just as the CAIR Rule was challenged and struck down, so a 

new set of power plant regulations may be as well. 

To guarantee the certainty of environmental improvement and 

public health benefit and the regulatory certainty that the electric 

power industry craves, Congress should act now to pass the bill. It 

would codify stringent national caps for SO2 and NOx while providing a crucial backstop for EPA’s power plant air toxics rule. And 

your bill enjoys broad bipartisan support. 

A comparison of the two bills to each other shows that your bill 

would save 44,000 more lives by 2025. And importantly EPA’s 

analysis demonstrates that passage of the bill would result in no 

noticeable increase in electricity prices, natural gas prices and no 

appreciable decrease in coal generation or use. 

Now, let me make just one final point. There has been a lot of 

discussion over the past couple of weeks about a possible climate 

title to a Senate energy bill. The focus is now on a power sector 

only bill. Especially where we are in this session, the Clean Air 

Task Force supports this approach. However, apparently some electric utilities are asking the Clean Air Act requirements for nongreenhouse gas pollutants, like today’s Transport Rule and next 

year’s MACT Rule, be scrapped in exchange for their support for 

the bill. 

To this we believe you should say, no deal. Congress, in considering the Climate Bill, should lay down a firewall to ensure that 

no Clean Air Act rollbacks with respect to power plant, sulfur, nitrogen, or toxic emissions occur. We must continue to make 

progress and clean up our air as we address climate change. We 

should not trade off the right of our children today to breathe clean 
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air for the right of our grandchildren to live in a world without 

global warming. 

Senator Alexander said it best when he said last week: ‘‘You 

mean to spew more sulfur, nitrogen, and mercury and less carbon? 

That’s not my idea of progress.’’ And we agree with that statement. 

Thank you very much, and I would be happy to answer any questions. 

[The prepared statement of Mr. Schneider follows:] 
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Senator CARPER. Senator Alexander will be pleased to know that 

even though he wasn’t here, he was quoted. I think we have had 

excellent testimony from each of you, and we are grateful for that, 

for your contributions to the debate and hopefully the resolution of 

these issues in the months to come. 

I am just going to ask one question, and then I am going to head 

out the door and turn the gavel over to Senator Voinovich. 

A question, if I could, for Eric Svenson. In Mr. Korleski’s statement, he indicated he is concerned about any tightening of the sulfur dioxide budget in the future might simply be technically really 

infeasible. The Clean Air Act Amendments of 2010 that Senator Alexander and I and others have offered has much stronger sulfur dioxide marks than the Transport Rule. 

We have heard from utilities that tighter targets are feasible, although some would disagree on the timeline, as you know. But 

most agree that the reductions are feasible. 

Let me just ask, is PSEG on track to meet the levels and timetables in the Transport Rule, and second, do you believe that we 

can easily meet tighter targets in SOx and NOx than in the Transport Rule? 

Mr. SVENSON. Relative to the question—thank you, Mr. Chairman, for the question—one is, PSEG is definitely on track to meet 

the targets. As a matter of fact where we are today in our requirements, the status of our coal burning plants and other plants, I believe we are really 4 years ahead of schedule relative to what the 

Transport Rule is going to require by 2014. 

I actually also believe that PSEG’s fleet is actually well positioned for even the mercury MACT rule and as well as for meeting 

future maximum achievable control technology requirements for 

hazardous air pollutants. I believe there are a lot of things—at 

least what I can see there—that are doable. 

But having said that, always these things are case-specific and 

so on. So as far as, health-based standards are going to be continually evolving. What I liked about the Transport Rule is it is constantly reflecting that it is going to take that updated information 

and there will be new requirements. I would like to point out that 

in the industry—back between 1999 and 2008, the industry installed over 270 gigawatts—270 gigawatts— of natural gas-fired 

generation. In a period of 2001 to 2003, installed 163 gigawatts of 

that generation, of new natural gas-fired generation. 

So my answer to you about can the industry adapt to these new, 

more stringent requirements, it may not all come down to simply 

adding back in controls onto a coal plant. It may necessitate, under 

these caps, eventually phasing out a plant and repowering it with 

a new natural gas combined cycle plant or something of that sort. 

I believe that that is doable. 

Senator CARPER. Thanks very much. I apologize to our witnesses 

and my colleagues for slipping out on you. We all know we have 

problems, certainly challenges on the environmental front, on the 

health front. We also have challenges with respect to budget deficits. We are looking at a budget deficit; we basically doubled our 

Nation’s debt from 2001 to 2008. We are on track, if we are not 

careful, to double it again over the next decade. 
339 

One of the issues that we have worked on, Senators Coburn, 

McCaskill, Collins, and I, on this legislation, in a day and age 

where last year, almost $100 billion of improper payments, mostly 

overpayments, made by Federal agencies, not including Department of Defense, not including part of Medicare, $98 billion worth 

of improper payments. We are saying with this legislation that the 

President is going to sign in about 30 minutes that agencies, all 

Federal agencies have to report their improper payments. They 

have to stop making their improper payments. And they have to go 

out and recover money that has been improperly paid, overpaid in 

some cases, fraudulently paid. 

So that is what we are about to do. And if we can do, after 6 

weeks of effort, achieve a bipartisan consensus, bicameral legislation, that the President is going to sign, maybe, George, maybe, my 

friend, maybe we can hammer something out here before you are 

ready to ride off into the sunrise. 

So with that said, the hearing is yours. I look forward to talking 

with you this afternoon. Thank you. Thank you all. 

Senator VOINOVICH [presiding]. One of the observations that I 

have had even most recently is the issue of the various positions 

taken by utilities depending on the percentage of energy generated. 

In your particular case, according to this, you have 16,000 

megawatts produced, and about 2,400 comes from coal. So that is 

about 15 percent. 

I suspect that if you got First Energy and AEP in the same room 

with you they would have a different perspective on things just because of the fact of what they are burning in order to generate electricity. Just a comment that I make, and I would suspect that it 

is a little bit easier for you to meet some of these things than it 

may be for them because of their heavy reliance on coal. Would you 

think that that statement kind of reflects reality? 

Mr. SVENSON. I think that there is a reality to that. But what 

I would just say is that a lot of it is not simply do I have more 

coal or less coal. It is a matter of some of us have already put certain controls on sooner than others. So that is another reality, is 

that what you will find is quite a disparity even within those who 

are burning coal and have different levels of control, depending on 

where we are in the country. 

Senator VOINOVICH. The thing that would be interesting for me, 

just to follow up on that, I know for example, because I have this 

testimony from AEP, that they have spent $5 billion during the 

last decade. They have reduced their NOx 84 percent. That is probably reflective, Mr. Korleski, of what you are saying, that they have 

done a pretty good job in NOx. The rule could be, maybe not even 

tight enough for the NOx. 

On SO2, they are at 64 percent. Mr. Schneider, I was pleased 

that you have indicated that they have made some real progress 

on SO2. So the real issue, I think, is how do we make some sense 

out of this and get something done. As many of you know I have 

some real problems with the greenhouse gas emissions. I sometimes look at the emphasis that we are placing on greenhouse gas 

emissions because that is an international problem that we can impact upon. 
340 

But I also think about NOx, SOx and mercury, which we have 

some really good statistics on. One of the things that I am going 

to look at, and I have been thinking about doing this, is who are 

the people that, I think one of you said that we have 1,600 less— 

maybe it was you, Mr. Schneider—that died. One of you did. The 

issue is, where do those statistics come from? 

Can you comment on that, Mr. Schneider? You have been following this for a long time. Where do we get those statistics that 

say the State of Ohio health care costs have increased because of 

bad air? Or in Ohio, X number of people are dead because of NOx, SOx, and mercury? 

Mr. SCHNEIDER. Senator, thank you for the question. There are 

a number of different—actually there are hundreds of different 

peer reviewed published studies that relate air pollution levels to 

different diseases and death. There are obviously—there are both 

prospective studies that look at what the prediction would be. But 

in the last few years there have actually been retrospective studies 

because the air pollution has gotten less. They have been able to 

go back and look at the incidence of a lot of these deaths and diseases over time and tease out from that, using their methodologies, 

what would be attributable to the improvement in air quality. 

So a lot of this is put together by, synthesized by the U.S. Environmental Protection Agency when they do a recap for you of what 

the benefits have been of the Clean Air Act both in the past and 

going forward. 

So these methodologies have been reviewed both by EPA’s 

Science Advisory Board, which involves people from industry, people from academia, environmental groups, State governments, and 

so forth, but also by the National Academy of Sciences. So this is 

all very well reviewed information that has stood the test of peer 

review and publication. I think our view is that it is reliable. As 

you heard there is a range of numbers that EPA mentioned. So 

there is some uncertainty involved in the absolute magnitude depending on which study you follow. That is why you saw that range 

in Assistant Administrator McCarthy’s testimony. 

But in general there is a robust set of scientific literature that 

helps us put some numbers on the, I would phrase it the other 

way, the benefits of cleaning up the air. 

Senator VOINOVICH. I would appreciate it if you would share that 

with my office. I don’t mean reports like this, but if you have executive summaries from a couple of groups I would be appreciative 

of your giving them to me. 

Mr. SCHNEIDER. Sure. 

Senator VOINOVICH. Mr. Korleski, I see you have been, this is 

what, your fourth year in the EPA. I remember back when I was 

Governor, as I mentioned in my statement or comment and when 

I was the former mayor of Cleveland, and I noted that somebody 

mentioned Cleveland is still not doing its work. Interesting to find 

out if it is all because of automobiles or what the cause is. 

I know we wanted to get the ambient air standards taken care 

of as soon as possible because we did have businesses that were 

contemplating not expanding or even coming to the State because 

of the fact that we hadn’t met the—and that meant they would 

have to expend more money in order to do business in the State. 
341 

The question I have is, from your perspective, or maybe from, 

and I am sure you pay attention to the economic impact these 

have, and you just said you met the 1997 standards? 

Mr. KORLESKI. Yes, that is correct. 

Senator VOINOVICH. What impact, if any, has this had on Ohio’s 

economy and on its ratepayers? And I guess the next thing would 

be is that you have a little problem with the timetable of implementing these. I would also be interested in your perspective on 

that. So what has happened in terms of what we already are doing, 

and then if you look down the road, what impact do you think that 

has on our State? The reason I mention it is because, as you well 

know, we are one of the leaders in the United States in unemployment. 

Mr. KORLESKI. Thank you, Senator. First, may I also say thank 

you for your many years of service. I have always very much enjoyed working with you. I very much respect the work that you 

have done in the U.S. Senate. Thank you very much, and I shall 

personally miss your services. 

In answering your question, even 5 or 6 years ago, as I think I 

mentioned, it was considered unthinkable that Ohio, and in particular the Cleveland and/or Cincinnati corridors would be able to 

achieve the 1997 Ambient Air Quality Standard. We finally did it, 

I think, for a number of reasons. Certainly one was putting controls in over time, changing our rules to reflect more stringent requirements on VOCs, on volatile organic compounds. I think it is 

because you are seeing cleaner auto fleets. There is no question 

that transportation has historically been an enormous source, a 

contributory source to the ozone problem. And I think we are seeing our fleet slowly get cleaner, which is wonderful. 

Frankly, I think, if I look back at the summer when the gas was $4 a gallon, perhaps people were driving less and that made a difference. I think it is probably a whole suite of factors that allowed 

us to get the point where we are today. But there is no question 

that a lot of it has been more stringent rules, additional controls 

on VOC sources, enforcement actions to get people to comply with 

those VOC rules, certainly both Federal and State enforcement actions. It took a number of things to get there. 

The biggest point that comes to mind when you raise that issue 

is, while I am absolutely delighted to have finally achieved the 

1997 standards State-wide, I am also troubled—that is probably 

not the right word—I feel somewhat whipsawed by the fact that 

back in 2008 there was a lower standard promulgated, and we expected there would be a lower standard. We certainly, I think Ms. 

McCarthy is right, the Clean Air Act requires that the standard be 

reviewed and amended as appropriate every 5 years. 

So in 2008 the standard was lowered to .075, if I’m remembering 

my numbers correctly. And we were just beginning to gear up to 

figure out, what do we do now? More VOC controls? Let’s look at 

the transportation sector, et cetera. 

Then shortly after—and this is not about politics at all—but 

shortly after the new Administration took place, there was a decision that that needed to be reviewed. Based on a number of reasons it was reviewed, and I believe my colleague, Mr. Schneider, 

is right, that it is likely here when they propose or when they final-
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ize a standard it will be considerably lower than the 2008 standard. 

The difficulty that that places on Ohio, which undoubtedly is a 

heavy coal State, and you and I both know that, but the difficulty 

that that places on Ohio when you are changing standards that 

rapidly is we never have enough time. And I think industry and 

other regulated entities don’t have enough time to get their feet 

clearly on the ground to figure out where are we going, what are 

we going to have to do, let’s get a plan, let’s move forward, let’s fix 

this and meet the standard. 

It is difficult when you are constantly being asked to hit a moving target. I think anyone who has ever tried to any sort of a business, any sort of a regulatory agency, or anything realizes when 

you are hitting moving targets you are never on solid ground; you 

don’t know exactly what is coming next, how soon will it change 

again, what are we going to have to do, are we going to have start 

over, are we just going to have basically toss out our older implementation plans, even plans that we had submitted just a year or 

two ago, et cetera. It creates great uncertainty across the board, 

uncertainty which hampers my ability to regulate effectively, uncertainty which hampers businesses’ ability to function with a predictability and certainty that we all hear about so often. 

It also presents great economic uncertainty in terms of, for businesses, OK, what is going to happen in that State? Are those counties going to be in attainment or non-attainment? If they are nonattainment the issues that you raised a moment ago are still very 

much with us. Businesses are reluctant to locate or expand in nonattainment areas because it is more difficult. It is becoming more 

difficult to find the offsets. It is becoming more difficult and more 

expensive, certainly, to put on the additional controls that you 

would need in a non-attainment area. 

But I think with all that, again, I go back to the biggest problem 

that I struggle with as a director, is continuing uncertainty about 

where the Federal and consequently the State regulatory system is 

heading. What are the rules that we are going to live by? You commented earlier and pointed out a portion of my testimony where I 

suggested a 10-year timeline before we started changing budgets. 

Maybe 10 years is too long. I am happy to talk to Ms. McCarthy 

and anybody else about that. 

But if you talk about proposing or finalizing a standard and then 

within some very short period of time changing it again because of 

a change in the National Ambient Air Quality Standard, again we 

will continue to have this whipsaw effect, this uncertain foundation 

that everybody is trying to operate on. It will cause great confusion. 

And Senator, I will be very candid. I am the EPA Director of the 

State of Ohio. It is first and foremost my responsibility to protect 

the public health and welfare and to protect the environment. That 

is my job. But having gone through and still living through the recession that we are seeing in Ohio, and seeing those very realworld impacts with respect to job losses and unemployment and 

families being unable to hold body and soul together and children 

being unable to have appropriate nutrition and to be educated 

properly, et cetera, I view that my job as a director, I have to take 
343 

those real-world economic considerations into effect, well, I am not 

doing my job. 

I can be as theoretical as I would like to be, I can look at as 

many epidemiological studies and as many modeling activities as 

I can. But at the end of the day I have to look at what is happening 

on the ground in Ohio, and do people understand what the ground 

rules are, do they know where we are going. If the answer to those 

questions is no, I think we all suffer. 

I am sorry, that is a very long, long way around to answering 

your question, but I think that is how I would address it. 

Senator VOINOVICH. I would be interested, and Senator Carper 

has left the gavel to me, but you have heard Mr. Korleski’s testimony, all the other three witnesses. I will give you an opportunity 

to comment on what he had to say, and then we will end the hearing. 

Mr. SVENSON. Senator, if I could make a comment on Mr. 

Korleski’s comments. 

Senator VOINOVICH. By the way, one of the things that maybe I 

can get the staff to do, I would be interested in knowing how many 

other States find themselves in the predicament that you do, and 

that is that you did the 1997, then the 2008 came out, and that 

was lower. And now there is some revision of that in terms of their 

respective SIPs because you have to put the SIP together. It takes 

a long time to do that. Then you get the SIP done, and then somebody comes along and says, hey, we changed this; it is going to be 

lower. Then you have to go back and again look at the SIP to figure 

out how do you get it done. 

Mr. SVENSON. Senator, just a comment on Mr. Korleski’s comments. First of all, New Jersey, most of the Northeast, where I am 

from, has been persistently into a non-attainment situation. Just to 

put it into business perspective, there is a provision in the Clean 

Air Act that is called section 185. It is a fee provision that says if 

you were in a severe or extreme non-attainment area back in the 

original 1990 Act amendments for ozone, if you didn’t meet the attainment deadlines that were spelled out in the 1990 Act that there 

would be fees imposed, so much per ton per each source. It was 

$5,000 per ton, modified for a cost index. 

Today, even though the EPA is not yet collecting that or the 

States are not collecting that because that is a requirement that is 

in the, at least in the Act, there have been some court cases from 

California on this, we have looked, as a company, at a reserve for 

this. It is to the tune of about $6 million to $8 million a year, and 

we have been doing so for the past 2 years. That is a hard, real 

fact of being in a non-attainment area as to what it means. 

There are other businesses that are also NOx emitters and VOC 

emitters. They are likely booking the same in our State as well as 

other States that had severe or extreme ozone non-attainment. 

So that is why there is a real, you asked a while back about perspective, why do I hear different views from different utilities. It 

is not just simply the makeup of our fleet, but it is also where we 

are located. Nobody wants to be in a non-attainment area. There 

are not just simply the heath-based issues. There are economic 

issues. That is significant. 
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But quite frankly, your State is contributing to my State’s nonattainment. And you are causing jobs to flee my State. And they 

are hurting the Northeast. So said directly, when you are not doing 

what we think is required under the Clean Air Act you are hurting 

my State and making it more difficult and causing unemployment 

to occur. 

Put another way, too, we are talking about jobs. A lot of these 

control requirements are going to require retrofit of technologies. 

At the height of Mercer and Hudson’s construction for the back-end 

technologies of scrubbers, SCRs, bag-houses, the height of construction over a 3-year period, 1,600 construction jobs, I would suggest, 

by the way, 25 permanent operating positions have been created at 

each one of those coal plants for the back-end control technology. 

So there are, yes, there are costs in terms of costs borne in rates. 

The flip side of that is there are jobs created, needed construction 

jobs, as a result of this. I do agree with Mr. Korleski’s comment 

about whipsawing. There has to be some certainty. I believe that 

the Assistant Administrator has really reached out to try over the 

past year to bring in the industry, Department of Energy, FERC, 

and others in the environmental community to anticipate what 

these emerging requirements are going to be to provide a road 

map. And actually it is some of our members of industry and others 

that have actually created some of the uncertainty because of the 

litigation and other things that have actually derailed what otherwise would have been in place by now. 

Senator VOINOVICH. Well, the argument on that might be that 

because of the fact that they feel that it is arbitrary, that they go 

to court in order to do it, and if they felt that it was less arbitrary 

and had more time they might not be going into court. 

I am very familiar with what you are talking about. I was Chairman of the National Governor Association. One of the biggest mistakes I made was to put Christine Todd Whitman in charge of the 

environment when I was with the NGA. There has always been 

this problem that Ohio is responsible for our situation. 

I thought that when we came forward with the Clear Skies that 

there was some understanding that that would eliminate the need, 

I think what are they, 126 petitions that the States file that they 

are saying, they have to file a petition in order to kind of say to 

the EPA, our problem, we are not creating our problem, somebody 

else is doing it, and kind of give them some relief. I thought at that 

time, the way it all worked out, that that would have eliminated 

some of what you are talking about. 

Does anybody want to comment on that? 

Mr. SNYDER. I was actually going to respond to the previous 

question and respond to some of the comments. 

Senator VOINOVICH. The point is that the issue here is that you 

have States that feel that they are being penalized because other 

States aren’t doing what they are supposed to be doing. I guess in 

Ohio we could argue that maybe we have problems because of 

Gary, Indiana, or whatever. Everybody is being impacted, and you 

would argue that you are being more impacted than Ohio is from 

air transport. 

So the point is, how do you work that out? 
345 

Mr. SNYDER. I think we are beyond the point of State versus 

State in this. I think some of the maps that you see show that now 

we are all in this together. And we all need to do our part to reduce 

emissions, to provide the benefits of clean air to all of our residents. EPA has an obligation to set air quality standards that protect public health. And we take that seriously, just like Mr. 

Korleski. 

It is my job, it is my boss’s job, Commissioner Pete Grannis, to 

achieve, to meet those standards, to protect the environment of our 

people. That can be a difficult job when EPA lowers the standards—as we are already controlling the smallest products, consumer products, small sources—to find additional ways of getting 

the emission reductions. But we take that seriously, we do that. 

But what I think EPA recognizes with this Transport Rule is 

that we need the reductions on a regional basis, and it benefits all 

of us. It benefits us in New York if there are emission reductions 

in Ohio and Pennsylvania and New York. And as that map shows 

it benefits the people in Ohio, Pennsylvania, and New York also. 

It is a hard job to keep up with EPA’s standards. But EPA has 

its job, and we have our job. And so far we have succeeded in doing 

it. 

I would like to make just a couple of points about the certainty 

question that has been raised a couple of times. This Transport 

Rule leaves many of the large sources uncontrolled. And so when 

EPA takes the next step and promulgates another transport rule, 

that is not going to mean additional controls on a plant that already has a scrubber and already has SCRs in place. It means the 

next plant will put scrubbers and SCRs on its facility to control 

emissions. 

So I don’t think that the certainty issue is really that much of 

a problem. 

One final point on certainty is I think the best way of providing 

certainty is aligning all these obligations. EPA is doing a good job 

of that, especially with coming out with the mercury rule next year. 

I think the missing piece is climate. If Congress passes a climate 

bill then industry knows with greater certainty what the future 

holds, and it can make those investment decisions for the next 20 

or 30 years with more certainty. 

Senator VOINOVICH. Mr. Schneider, then we will wrap it up. 

Mr. SCHNEIDER. Senator, I really couldn’t add anything to what 

my colleagues have done. They have done a great job of explaining 

this issue. I guess, speaking to someone who is from Ohio, I would 

just say that Ohio stands to benefit the most from this, and I think 

it is in part because of what you said that this transport into Ohio 

from other States. I urged EPA to provide for this hearing a great 

map, which shows, we have a mental image in our mind that the 

air always blows from Ohio up to the northeast, that sort of the 

end of the tailpipe thing. But in fact, and that is the way weather 

systems move. 

But when there is a bad air day the systems as you know also 

are cyclonic. If you look at the weather maps, everything is in a 

circle. We are breathing all the same air in one big pool. And what 

actually gets emitted in the mid-Atlantic States blows back into 

you. 
346 

So what Mr. Snyder said is exactly right; we are really all in this 

together, and I hope we can get past the idea that it is a blame 

game and look at these provisions as a good neighbor policy. We 

are close, as these maps show. We are very close to a solution for 

a lot of this. I think if we can move incrementally forward to tighten the Transport Rule or to pass the legislation that you and Senator Carper have been working on and crafting, we can meet a lot 

of the objectives that we have been working on for over a decade. 

Senator VOINOVICH. I want to thank the witnesses for being here 

today. It has been enlightening for me. Thank you. 

[Whereupon, at 11:25 a.m., the Subcommittee was adjourned.] 

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