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THE IMPACT ON U.S. MANUFACTURING: SPOTLIGHT ON THE ENVIRONMENTAL PROTECTION

AGENCY

HEARING

BEFORE THE

SUBCOMMITTEE ON REGULATORY AFFAIRS

OF THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

SEPTEMBER 28, 2005

Serial No. 109–191

Printed for the use of the Committee on Government Reform

(

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html

http://www.house.gov/reform

(II)

COMMITTEE ON GOVERNMENT REFORM

TOM DAVIS, Virginia, Chairman

CHRISTOPHER SHAYS, Connecticut

DAN BURTON, Indiana

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

JOHN L. MICA, Florida

GIL GUTKNECHT, Minnesota

MARK E. SOUDER, Indiana

STEVEN C. LATOURETTE, Ohio

TODD RUSSELL PLATTS, Pennsylvania

CHRIS CANNON, Utah

JOHN J. DUNCAN, JR., Tennessee

CANDICE S. MILLER, Michigan

MICHAEL R. TURNER, Ohio

DARRELL E. ISSA, California

GINNY BROWN-WAITE, Florida

JON C. PORTER, Nevada

KENNY MARCHANT, Texas

LYNN A. WESTMORELAND, Georgia

PATRICK T. MCHENRY, North Carolina

CHARLES W. DENT, Pennsylvania

VIRGINIA FOXX, North Carolina

JEAN SCMIDT, Ohio

HENRY A. WAXMAN, California

TOM LANTOS, California

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

DANNY K. DAVIS, Illinois

WM. LACY CLAY, Missouri

DIANE E. WATSON, California

STEPHEN F. LYNCH, Massachusetts

CHRIS VAN HOLLEN, Maryland

LINDA T. SANCHEZ, California

C.A. DUTCH RUPPERSBERGER, Maryland

BRIAN HIGGINS, New York

ELEANOR HOLMES NORTON, District of

Columbia

———

BERNARD SANDERS, Vermont

(Independent)

MELISSA WOJCIAK, Staff Director

DAVID MARIN, Deputy Staff Director/Communications Director

ROB BORDEN, Parliamentarian

TERESA AUSTIN, Chief Clerk

PHIL BARNETT, Minority Chief of Staff/Chief Counsel

SUBCOMMITTEE ON REGULATORY AFFAIRS

CANDICE S. MILLER, Michigan, Chairman

GINNY BROWN-WAITE, Florida

CHRIS CANNON, Utah

MICHAEL R. TURNER, Ohio

LYNN A. WESTMORELAND, Georgia

STEPHEN F. LYNCH, Massachusetts

WM. LACY CLAY, Missouri

CHRIS VAN HOLLEN, Maryland

EX OFFICIO

TOM DAVIS, Virginia HENRY A. WAXMAN, California

ED SCHROCK, Staff Director

ROSARIO PALMIERI, Deputy Staff Director

ALEX COOPER, Clerk

KRISTA BOYD, Minority Counsel

(III)

C O N T E N T S

Page

Hearing held on September 28, 2005 ..................................................................... 1

Statement of:

Mannix, Brian, Associate Administrator, Office of Policy, Economics and

Innovation, U.S. Environmental Protection Agency; and Tom Sullivan,

Chief Counsel, Office of Advocacy, U.S. Small Business Administration 8

Mannix, Brian ............................................................................................ 8

Sullivan, Tom ............................................................................................. 19

Wagener, John D., P.E., corporate director of environmental affairs,

Mueller Industries, Inc.; Chris Bagley, regulatory compliance manager,

Dan Chem Industries, Inc.; B.J. Mason, president, Mid-Atlantic Finishing Corp.; and Scott Slesinger, vice president for governmental affairs,

the Environmental Technology Council ...................................................... 47

Bagley, Chris ............................................................................................. 56

Mason, B.J. ................................................................................................ 65

Slesinger, Scott .......................................................................................... 73

Wagener, John D. ...................................................................................... 47

Letters, statements, etc., submitted for the record by:

Bagley, Chris, regulatory compliance manager, Dan Chem Industries,

Inc., prepared statement of .......................................................................... 58

Mannix, Brian, Associate Administrator, Office of Policy, Economics and

Innovation, U.S. Environmental Protection Agency, prepared statement

of ..................................................................................................................... 11

Mason, B.J., president, Mid-Atlantic Finishing Corp., prepared statement

of ..................................................................................................................... 67

Miller, Hon. Candice S., a Representative in Congress from the State

of Michigan, prepared statement of ............................................................. 3

Slesinger, Scott, vice president for governmental affairs, the Environmental Technology Council, prepared statement of ................................... 76

Sullivan, Tom, Chief Counsel, Office of Advocacy, U.S. Small Business

Administration, prepared statement of ....................................................... 21

Wagener, John D., P.E., corporate director of environmental affairs,

Mueller Industries, Inc., prepared statement of ........................................ 50

(1)

THE IMPACT ON U.S. MANUFACTURING: SPOTLIGHT ON THE ENVIRONMENTAL PROTECTION AGENCY

WEDNESDAY, SEPTEMBER 28, 2005

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON REGULATORY AFFAIRS,

COMMITTEE ON GOVERNMENT REFORM,

Washington, DC.

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

2154, Rayburn House Office Building, Hon. Candice Miller (chairman of the committee) presiding.

Present: Representatives Miller, Lynch, Westmoreland, Clay, and

Van Hollen.

Staff present: Ed Schrock, staff director; Rosario Palmieri, deputy staff director; Erik Glavich, professional staff member; Dena

Kozanas, counsel; Joe Santiago, detailee; Alex Cooper, clerk; Krista

Boyd, minority counsel; and Cecelia Morton, minority office manager.

Ms. MILLER. Good morning, everyone. I am sorry I am a few minutes late here.

I would like to call the meeting to order. We are here today to

discuss the overall progress of the Environmental Protection Agency in responding to the public’s reform nominations that were included in the Office of Management and Budget’s 2005 Report on

Regulatory Reform of the U.S. Manufacturing Sector. This is actually the third in a series of hearings that we have had discussing

these regulations and policy areas that do have an impact on domestic manufacturing.

Manufacturing, of course, has widely been acknowledged as a

critical component of our economy. Manufacturing creates goods,

but it also creates progress, innovation and economic and human

prosperity. For many years, hopefully most of us in Government

have understood that we do not create jobs; rather, the private sector creates jobs. The role of Government, of course, has been to try

to create an environment that attracts business investments and

encourages job creation.

The manufacturing industry has come under attack lately, unfortunately by the very Government that once held it together and

tried to help it. Manufacturing in the United States provides employment to 14 million people. It provides 13 percent of the GDP.

It is responsible for 62 percent of all exports and accounts for 60

percent of all industrial research and development spending. More

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than any other sector, manufacturers bear the highest share, the

highest burden, of Government regulation. At $10,175 per employee, domestic manufacturers assume almost

twice the average cost for all U.S. industries. Very small manufacturers, categorized as those that have fewer than 20 employees, actually bear a cost of almost $22,000 per employee, which is twice

the average for manufacturing overall.

The main factor in these dramatic disparities is due to the high

compliance costs of environmental regulations in many cases. Fully

three-fourths of the regulatory costs to very small manufacturers

come from environmental regulations. These small manufacturers

account for 75 percent of all manufacturing firms. Regulatory compliance costs are the equivalent of a 12 percent excise tax on manufacturing. Such domestically imposed costs are harming manufacturing and adding almost 23 percent, 23 points, actually, to the

cost of doing business in the United States.

The high cost of regulation, the increase in the cost of health

care and the often unwarranted tort litigation have all altered the

dynamics of domestic manufacturing. These new dynamics have

hindered the international competitiveness of manufacturers and

as well have constrained the demand for workers in U.S. facilities.

Now, make no mistake. I believe that I am a defender of regulations that protect worker health and safety. I would like to think

I am a defender of regulations that watch over consumers and safeguard our natural resources. In fact, I have spent almost three decades in public service. One of my principal advocacies has always

been protecting our environment.

But I do think that the common standard, the common element,

always has to be what is actually reasonable. That is the purpose

of our hearing today. I am eager to have a dialog about how best

to improve Federal regulations for the benefit of all Americans, and

in particular, I am hopeful that this hearing will have a positive

impact on those regulations highlighted by OMB that are still outstanding.

I am very troubled by the adverse effects that some of these regulations are having on our ability to remain competitive with our

key trading partners around the glove. By acting on the 42 nominations from the Environmental Protection Agency, I do believe that

we could be one step closer to reducing the costs and burden on domestic manufacturing firms, and the savings created by reducing

the regulatory burden on U.S. manufacturers could be redirected

into hiring new workers, growing our economy, investing in new

equipment, and protecting American jobs.

I do know that by working together, we can do the right thing

for workers as well as our environment, at the same time leveling

the playing field and improving the competitiveness of American

manufacturers.

[The prepared statement of Hon. Candice S. Miller follows:]

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Ms. MILLER. At this time I recognize the ranking member, Mr.

Lynch.

Mr. LYNCH. Thank you, Chairman Miller. I appreciate it.

First of all, no one understands more readily than I do the importance of the manufacturing industry to the economy. I have

been employed, prior to coming to Congress, I spent most of my

adult life working in the manufacturing industry for General Motors, for General Dynamics, working the Shell Oil facility down in

Norco, LA. So I certainly understand the importance of the manufacturing industry to the Nation’s health and economy.

I am also very aware that the regulations that are applied to

manufacturers are also very important to the health of our citizens

and to our environment. It is important for us to keep in mind, as

we discuss how environmental regulations affect the manufacturing

industry, that the duty of Government to protect the citizens and

the workers in those industries is also a noble cause and a primary

responsibility.

Today’s hearing will look at how EPA is responding to various

industry proposals to change environmental regulations. We will

hear today much about how these EPA regulations are affecting industry.

I would like to take a minute to talk about why, as a threshold

matter, some of those regulations are in place to begin with and

why they are so important for industry and for the public. One example is the Toxic Release Inventory Program. The Toxic Release

Inventory Program is one of the country’s most successful environmental programs. It provides communities with information about

toxic chemicals released in their neighborhoods and held at facilities, stored at facilities in their neighborhoods. It holds industry

publicly accountable for the toxic pollution that it releases.

The Toxic Release Inventory framework only requires companies

to report how much of a certain toxic chemical they are releasing.

It does not require them to actually reduce pollution. However, the

public notification aspect of this does put, I think, a positive pressure on reducing those amounts. It can lead to voluntary reductions in pollution, based on public scrutiny and the review of these

industry practices.

Last week, EPA announced a proposal to only require companies

to report their toxic releases every 2 years, rather than every year,

as they are currently required to do. EPA also proposed allowing

companies to release up to 5,000 pounds of some chemicals, excluding dioxin, thank goodness, without having to make public the

amount of those chemicals being released into the environment.

I would be very concerned about any changes to the Toxic Release Inventory program that would reduce the amount of information communities have about toxic releases. The Toxic Release Inventory Program was created by the Emergency Planning and

Community Right to Know Act, because communities have the

right to know what companies are putting into their air, water and

land.

In my own neighborhood and in my own family, when I was a

State Senator, we had a persistent problem with one of the oil storage facilities in my neighborhood. It was first owned by White

Fuel, which was a subsidiary of Texaco. Later it was purchased by

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Coastal Oil. It is a tank farm, which is a subsidiary of El Paso Natural Gas, I believe.

When I was State Senator, we had a rash of cases of lupus in

my neighborhood, lupus and scleroderma. One of its victims was

my cousin, Sean, 32 years old, who passed away from complications

of lupus. We had a study done by the Massachusetts Department

of Public Health in which they confirmed, we went door to door to

families finding out who had lupus or scleroderma in their families.

The report came back that it was a statistically significant number,

very high for that population. The number of fatalities and the

number of instances of that disease were remarkably high.

The problem is that much of that problem is now being connected, through investigative work, with oil spills in that neighborhood. We have some very old storage facilities. Now the oil has

seeped underneath houses for blocks and blocks of densely populated three-deckers in south Boston. It is a growing problem. Now

we have detective work that we need to do. If we did not have reporting such as is required under TRI, we wouldn’t be able to find

out the connection between the toxic releases and the diseases it

is now causing.

Additionally, Toxic Release Inventory data can be essential in

the event of a disaster such as Hurricane Katrina. Toxic Release

Inventory data provides easy to access information about the chemical plants and petroleum refineries that were flooded by the hurricane.

As I said, I worked at the Shell Oil Refinery in Norco, LA. I was

onboard the U.S. Iwo Jima last week with the FEMA Director

down there. They reported that we had 14 offshore oil rigs destroyed during the storm. Six of them were still pumping oil and

gas into the Gulf. This is 18 days after the original disaster.

When I asked how many oil spills on the land-based rigs, they

said those were not ascertained, but they were in the hundreds.

The exact number was not ascertained. The number of major refineries and oil storage facilities above ground, above ground, these

are not in vessels, these are not in tanks, were in the dozens. Now,

all those storage facilities are underwater or have been underwater

for about 3 weeks. So you see the need for that information.

Some of the suggested changes that are before us here today

would allow those storage facilities to not report what they have

onsite, or the quantities they have onsite, so that in an event like

Katrina or Rita, we would be totally at a loss in determining the

amount of toxics released into the environment. That is a situation

we do not want to be in.

Hurricane Katrina also highlights the importance of some of the

other environmental protections we will hear about today. For example, EPA’s spill prevention and counter-measure rule requires

certain facilities to prepare and implement plans to prevent and

contain oil spills and to prevent the contamination of coastal waterways. EPA has reported at least five major oil spills and upwards

of a hundred small oil spills.

By the way, I asked the Admiral down there, how much oil are

we talking about here that has been spilled because of Katrina.

And he said, well, at that point, on that Sunday afternoon, he said,

we have six oil wells still pumping into the Gulf, we have hundreds

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of smaller. He said that the amount right now, as of last Sunday

morning, was over 10 million gallons. I said, well, quantify that for

me in terms of other spills.

He said, the Exxon Valdez was 11 million gallons. He said that

we are at 10 million gallons and still pumping, still pumping into

the Gulf, still pumping into the coastal waterways of Louisiana and

Mississippi. So I think it is fair to assess that that we have a greater spill right now on the Gulf Coast.

Another example is EPA’s rules on hazardous waste management under the Resource Conservation and Recovery Act. We will

hear from witnesses today how the industry that this individual

represents is working with Gulf Coast communities to clean up

hazardous waste left behind by Hurricane Katrina.

As we can see from the damage caused by the recent hurricanes,

we should not focus on rolling back environmental protections without careful thought. We should look at how environmental protections can protect communities, especially in the event of a disaster,

and how we can ensure that people and businesses affected by

Hurricanes Katrina and Rita get back on their feet without having

to face avoidable public health and environmental problems.

I look forward to hearing from Mr. Mannix about EPA’s efforts

in that regard. I want to thank all of the panelists here today for

helping this subcommittee with its work. I yield back.

Thank you, Chairwoman Miller.

Ms. MILLER. Thank you, Representative Lynch.

Because we are an oversight committee, and we do have subpoena authority, it is our practice to swear in all of our witnesses.

So if you will please stand and raise your right hands.

[Witnesses sworn.]

Ms. MILLER. Thank you.

To the witnesses as well, you will see that the little black boxes

in front of you, there are various lights on them. When you see a

yellow light, you will know about 4 minutes has elapsed, and the

red light is for 5 minutes. Although I won’t hold you to that exactly, just to give you an idea for purposes of time.

The subcommittee first of all is going to hear from Brian Mannix.

He is the Associate Administrator for Policy, Economics and Innovation at the Environmental Protection Agency. Mr. Mannix has

nearly 30 years of scientific and policy experience, including most

recently a position as a senior research fellow in regulatory studies

at the George Mason University.

Previously, he was also the Director of Science and Technology

Studies at the Manufacturers Alliance for Productivity and Innovation. Mr. Mannix has come full circle and returned to the EPA

where he began his career in 1977 at their Office of Policy and

Management. Mr. Mannix, we appreciate your appearing today before the hearing, and we look forward to your testimony, sir.

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STATEMENTS OF BRIAN MANNIX, ASSOCIATE ADMINISTRATOR, OFFICE OF POLICY, ECONOMICS AND INNOVATION,

U.S. ENVIRONMENTAL PROTECTION AGENCY; AND TOM SULLIVAN, CHIEF COUNSEL, OFFICE OF ADVOCACY, U.S. SMALL

BUSINESS ADMINISTRATION

STATEMENT OF BRIAN MANNIX

Mr. MANNIX. Thank you, Madam Chairman and members of the

subcommittee.

I appreciate the opportunity to appear before you today to discuss EPA’s regulatory reform efforts included in OMB’s 2005 Report on Regulatory Reform in the Manufacturing Sector. I believe

the subcommittee will be pleased to hear about the significant

progress the Agency has made in meeting our commitments.

I noted until recently you were expecting the EPA witness at this

hearing to be our Deputy Administrator, Marcus Peacock. Although

he was scheduled to be here, he is leading the Agency’s response

to Hurricanes Katrina and Rita. As you can imagine, this is an allconsuming effort. I would like to thank the subcommittee for allowing me to be here in his place, and for all the earlier work to accommodate Mr. Peacock’s schedule.

If it would please the subcommittee, Madam Chairman, I would

like to summarize my statement today and request that the full

written statement be included in the hearing record.

Ms. MILLER. Without objection, so ordered.

Mr. MANNIX. Thank you.

EPA shares the President’s appreciation and the subcommittee’s

appreciation for the key role played by the manufacturing sector in

sustaining the health of our national economy. The Agency is actively pursuing a variety of reforms to our regulations that were

suggested by the OMB report. The manufacturing initiative offers

an opportunity for EPA to reduce unnecessary and burdensome requirements on our Nation’s vital manufacturing sector, while accelerating the pace of environmental progress.

As you know, each spring OMB publishes a draft report to Congress on the costs and benefits of Federal regulations and solicits

public comments on the contents of the report and on any regulatory actions or guidance documents the public believes should be

nominated for reform. This year, OMB focused the report on regulatory reforms of most interest to the manufacturing sector; 189 responses were submitted to OMB from 41 different commenters,

most of which pertained to actions being taken by EPA and the Department of Labor. OMB referred 90 proposed reforms to EPA in

December 2004 for our review and consideration.

EPA evaluated the merits of each of the reform nominations, considering a variety of factors on a case by case basis. Among these

factors were: one, whether the action is based on sound science;

two, whether the action is the most effective way to manage for environmental results; and three, whether the same or an even better

environmental outcome could be achieved through a cooperative

partnership, rather than command and control regulations.

After considering these and other factors, in January 2005, the

Agency submitted its reform recommendations to OMB. Ultimately,

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42 EPA reforms covering a wide range of issues were included in

OMB’s final report.

Two recently completed actions illustrate the principles supporting our selection of reform candidates. Today, EPA is announcing

a rule streamlining the general pre-treatment regulations that establish requirements for local publicly owned treatment works

[POTWs]. The changes give POTWs greater flexibility to oversee

the dischargers whose effluent they treat, but preserves EPA’s

backstop authority to ensure that the pre-treatment program continues to protect both the POTW and the environment. The result

will be less paperwork for POTWs and the manufacturing sources,

since local regulators can now eliminate burdensome paperwork requirements without running afoul of EPA rules.

The reforms underway related to the Toxic Release Inventory

Program also demonstrate the application of the Agency’s principles. Many people have expressed a concern that TRI reporting

is unnecessarily burdensome and that the usefulness of the resulting data is not commensurate with its costs. Last week, EPA announced a proposed rule that will reduce the TRI burden by allowing thousands of reporters to use a streamlined form.

In addition, the Agency has notified Congress that it intends to

initiate a rulemaking to modify required reporting frequency from

annual to biennial reporting. This would not only substantially reduce the burden but also enable EPA and the States to use their

saved resources to improve the TRI data base and conduct additional analyses that would enhance the value of the data to the

public.

I would also like to highlight for the subcommittee a few important reform actions we expect to complete by the end of this year.

For instance, the Agency currently plans to issue new guidance and

propose a rulemaking concerning the Spill Prevention, Control and

Countermeasures rule. The guidance document will provide clarification and compliance assistance to facilities subject to that rule.

It will also propose compliance flexibility for facilities that store

small amounts of oil while continuing to prevent potential discharges. Also by the end of the year, the agency intends to issue

a proposed rule to promote additional recycling in the electroplating industry. I will refer the subcommittee to the manufacturing

initiative report attached to my testimony for additional details

and for additional actions that we have underway and progress

made to date.

In conclusion, under this administration, EPA has taken significant steps to improve the quality and credibility of our regulations

and guidance documents. The reforms that are included in the

manufacturing initiative are an important part of that improvement process. EPA is committed to implementing and completing

the reforms outlined in OMB’s manufacturing initiative. This effort

affords us the opportunity to evaluate and act on the reforms that

promote stewardship and innovation and that produce environmental results.

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I expect that the Agency will be totally successful in responding

to the 2005 manufacturing sector reform initiative. Thank you for

the opportunity to testify today. I would be happy to answer any

questions the committee might have.

[The prepared statement of Mr. Mannix follows:]

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Ms. MILLER. Thank you very much.

Our next witness is the Honorable Tom Sullivan. Mr. Sullivan is

the U.S. Small Business Administration’s fifth Chief Counsel of Advocacy. Upon his confirmation in January 2002, Mr. Sullivan began

opening up channels for small business concerns to be heard at the

highest levels of Government.

Prior to his joining the U.S. SBA, Mr. Sullivan had established

his dedication to small business concerns with the NFIB, where he

promoted a pro-small business agenda in the Nation’s courts. In

the year 2000, Mr. Sullivan was named by Fortune Small Business

Magazine as one of the Power 30 most influential folks in Washington.

We certainly thank you, Mr. Sullivan, for joining us today and

we look forward to your testimony, sir.

STATEMENT OF TOM SULLIVAN

Mr. SULLIVAN. Thank you, Chairwoman Miller and members of

the subcommittee. Good morning. It is an honor to appear before

you today.

Congress established my office, the Office of Advocacy, to advocate the views of small business before agencies in Congress. My

office is an independent entity within the Small Business Administration. The views expressed here and in my written statement do

not necessarily reflect the position of the administration or the

SBA.

My testimony was not circulated for clearance with OMB, but

upon its submission to this subcommittee, I did share it with OMB

and EPA as a courtesy. With the Chair’s permission, I would like

to summarize my written statement and ask that it be completely

entered into the record.

Ms. MILLER. Without objection, so ordered.

Mr. SULLIVAN. In 2004, OMB and agencies undertook the process

designed to reduce the regulatory burden on U.S. manufacturers

through 76 targeted regulatory reforms. More than half of these reforms involved rules issued by the EPA.

A study released by my office a week ago Monday, done by Professor Mark Crain, called the Impact of Regulatory Costs on Small

Firms, found that in general, small business are disproportionately

impacted by the total Federal regulatory burden. It is a compliment

to my office that the Chair cited these figures in her opening statement.

Those figures are revealing in that the overall regulatory burden was estimated to exceed $1.1 trillion in 2004. For manufacturing

firms employing fewer than 20 employees, the annual regulatory

burden was estimated to be $21,919 per employee.

Looking specifically at environmental costs, the difference between small and large manufacturing firms is even more dramatic

than the overall 45 percent disproportionality. Small manufacturing firms, as the Chair noted in the opening statement, spend four

and a half times more per employee for environmental compliance

than large businesses do.

With regard to the manufacturing reform, regulatory reform initiative, my office has worked particularly closely with EPA on three

of their reforms: reporting and paperwork burden in the Toxics ReVerDate 11-MAY-2000 12:23 Nov 14, 2006 Jkt 000000 PO 00000 Frm 00023 Fmt 6633 Sfmt 6633 D:\DOCS\30593.TXT HGOVREF1 PsN: HGOVREF1
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lease Inventory program; spill prevention, control and countermeasure rule, and lead reporting burdens under the Toxics Release

Inventory.

EPA’s proposed revision to the TRI rule to encourage greater use

of the simpler form, the equivalent in the tax world of the 1040-

EZ, was announced last week. That proposal will allow Form A to

be used for the first time by business that handle PBTs but that

release none of them to the environment. The proposal also allows

facilities that use 5,000 pounds or less of non-PBT materials in a

year to use the short or simplified form.

In total, it is estimated that the proposal would provide a measure of regulatory relief for about 33 percent of all TRI reporters

and is anticipated to save about 165,000 hours of filing burden

each year. At the same time, the proposal ensures that the toxic

materials management activities of concern to the public will continue to be reported through Form R. If implemented as proposed,

EPA’s reform would provide paperwork relief to some 8,000 businesses, most of whom are small.

The TRI reforms have a long history. I am happy to answer questions about that history with regard to public comment, in particular, small business comment. Most of it is up on my office’s Web

site, that details public input to OMB and EPA for over a decade.

So we are pleased that EPA is moving forward with these reforms.

These reforms announced last week and some that lay ahead are

perfect examples of what happens when small businesses engage in

a constructive dialog with EPA, so that rules can be finalized that

are sensitive to their economic impact without compromising the

mission of EPA to protect human health and the environment.

When planned rules are evaluated by my office under the Regulatory Flexibility Act, we look for ways to reduce small business

burdens without compromising the regulatory objectives intended

by agencies. We believe that EPA’s regulatory reform efforts can

achieve the same result, and they will be extremely beneficial for

small manufacturing firms.

Thank you for allowing me to present these views, and I would

be happy to answer any questions.

[The prepared statement of Mr. Sullivan follows:]

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Ms. MILLER. Thank you very much, both of you. I think I will

just pick right up on what Mr. Sullivan was speaking about, the

TRI. Mr. Mannix, you mentioned that as well.

It was part of one of our previous hearings, we did talk about

that particular rule in depth, had some testimony about it. So I

was particularly pleased, last week, actually, to get a phone call

from Ms. Nelson saying that you were going to be announcing that.

She sort of led me through what your announcement was going to

be.

One of the options of that particular rule that I think small businesses had testified to us previously that they had quite a bit of

consternation about was restoration of the de minimis exemption

for the PBT reporters. Could you expand a bit on that? Do you

have any knowledge of why that was not part of the final rule?

Would you like me to come back to that?

Mr. MANNIX. I would have to get back to you on that, talk to Ms.

Nelson and get back to the committee on the details of that. Because I am not prepared to testify on that. There was a substitution of the short form for the long form, there are some changing

thresholds and then there is the proposed, the separate notification

to Congress of a future rulemaking action to go biennial. But I will

get back to you.

Ms. MILLER. If you could, we would appreciate that. The de minimis exemption wa something that was talked about, as I say, at

this committee, and I know we have had quite a bit of conversation

about it as well. So I would appreciate an answer at a later time

on that, if you could.

Also, Mr. Sullivan was mentioning about the SBA study on the

cost of regulation, the new study that you released there. I guess

I would ask Mr. Mannix whether or not you are familiar with that

study, if you have had an opportunity to evaluate it. I am taking

some notes here, as Mr. Sullivan was explaining, an estimate of

over $1 trillion in costs, of annual regulatory costs. And $22,000

per employee for small businesses, which is unbelievably startling,

quite frankly.

I am just wondering whether or not you have had an opportunity

to evaluate that study, if you agree with the findings of it and if

you could expand a little bit on what your agency might be prepared to do to decrease that $22,000 number down.

Mr. MANNIX. Yes, Madam Chairman. I have been at EPA 8 days

now, so I have not had time to review this new study. But as you

know, I was at the Mercatus Center at George Mason. Professor

Crain was a colleague. I have seen previous studies, and one of the

earlier studies came from the Mercatus Center on the cost of labor

regulation.

So I am familiar with the series of studies. And I am looking forward to seeing this one. Yes, I can assure you that at EPA, we will

be paying attention to these costs and these SBA studies.

Ms. MILLER. I might ask Mr. Sullivan, then, as a follow-up to

that question, at the beginning of this year, I sort of had in my

mind that the cost of the regulatory burden for small businesses

was a little less than $10,000. People talked about $7,000 to

$8,000. Now we are hearing this number of $22,000 per employe,

again, unbelievably startling.

34

Could you flesh out a bit how the construct of that number came

about in your study?

Mr. SULLIVAN. Certainly. I should explain to the subcommittee

that it is through this committee’s deliberations that has improved

this study in three successive iterations. This is the latest of three,

and at each time it is published, it gets better from an economic

perspective. The last time this study was released, this committee

actually was critical that it was not peer reviewed. For the first

time, this past year the study released last week was in fact peer

reviewed. It is a better study, the methodology is better off for it.

As far as comparing the past costs of regulation, which was roughly about $6,975 per employee, with the current, it is a little

bit of apples and oranges. Because again, the methodology is better. And when I say better, it is a little bit different.

I think the easiest way to characterize the growing cumulative

regulatory burden is a good news/bad news. The good news is that

there is likely to be a more level playing field when you compare

the costs borne by small versus large. The bad news is that playing

field is at a higher altitude, because the cumulative regulatory burden is growing.

Ms. MILLER. Perhaps I could ask you both to talk a little bit, and

Mr. Mannix in particular, even though you are newly back to the

EPA, about how the EPA in their decisionmaking actually does the

cost benefit analysis as you are looking at some of these rules and

regulations of keeping those competitive. We have heard studies

that have said that the structural costs of American manufactured

goods are 22, 23 points higher than any of our foreign competitors,

even Canada, not just China and Mexico, and much of it due to the

regulatory burden. How does that impact the decisionmaking as

the EPA is looking at some of these regulations?

Mr. MANNIX. The EPA uses benefit cost analysis in accordance

with OMB guidelines in support of its regulatory decisions. On

major regulations, we do regulatory impact analyses. We also comply with the regulatory Flexibility Act and SBREFA, Small Business Regulatory Enforcement and Fairness Act, to look at impacts

on small businesses.

But beyond that, as you mentioned, there is a concern about the

cumulative burden of regulations on American manufacturing.

That is what prompted the manufacturing initiative, the focus of

the OMB report this past year and the activities we are talking

about today.

There are other changes going on at the Commerce Department.

The staff has been retasked with looking at regulations affecting

manufacturing and also services. I expect to be working with the

economists at the Commerce Department to see what we can do

about ensuring the competitiveness of U.S. industry.

Ms. MILLER. Mr. Sullivan, do you have any comment on that?

Mr. SULLIVAN. I think Brian Mannix actually summed it up very

well.

Ms. MILLER. Very well. I would like to recognize the ranking

member, Representative Lynch.

Mr. LYNCH. Thank you, Madam Chair.

I have to say right at the outset, Mr. Mannix, I am a little surprised. Some of the questions that you were unable to answer are

35

pretty central to the inquiry here. If you have only been there 8

days, perhaps we should have had someone else testify. That is all

I am suggesting. We have been preparing this for a while.

The very study that some of these recommendations are based

upon should be known by someone on your staff. Maybe you could

refer to other people. But to come up here and say, I have only

been here 8 days, I can’t answer the questions, I will get back to

you, that is not really the level of cooperation that we are expecting.

I sympathize with your position and I have an utmost respect for

the Mercatus Center at George Mason, and no doubt you are a

wonderful reflection of that institution. No question. But just in

terms of efficiency and being able to help the committee with its

work, it would have been helpful if we had somebody who could

really answer some of these questions, with all due respect.

Mr. MANNIX. I did check with my staff in the interim. I will give

you a partial response now, to the best of my ability, to the question I was asked. The reason the de minimis exemption was not included in the TRI rule is that after looking at it and comparing it

to the proposal that they have also made to shift to biennial reporting, they determined that it would be far more effective in terms

of lowering the burden and yet maintaining the data quality to go

with biennial reporting.

So they left out de minimis from the proposed rule that was just

published in favor of the biennial reporting, which is a year away.

The law requires a notification to Congress before changing the period of reporting.

So the plan is over the next year to have outreach events, to talk

to stakeholders, talk to communities, explain what the thinking is

behind that proposal, and also, since the law requires notification

to Congress, we expect to hear from congressional committees what

their views are. So that rulemaking will be a year away. We do expect it to be more effective than the de minimis proposal that has

been discussed.

Mr. LYNCH. Fair enough. One of the proposed changes to the

Toxic Release Inventory Program announced last week would allow

companies to use the shorter form, the A form. I have the A form

and the R form up here. The A form is two pages and the R form

is five pages. If form A was allowed in those cases, companies

would be allowed, approximately, according to the National Environmental Trust, this would mean that approximately 4,400 facilities across the country would no longer have to report at least 25

percent of their toxic chemicals that they are releasing into the environment.

You realize, currently under the annual reporting, it goes by reporting year. So if I am a company and I am releasing 4,500

pounds just underneath the 5,000 pound limit, I can do that yearly

without telling people what I have on my site in terms of quantity,

whether I am treating it or not, where I am shipping it, for what

purposes, any recycling efforts, any treatment efforts, all of that is

omitted on Form R.

So we are really hiding the ball here for a lot of people. We are

actually allowing a significant amount of companies to conceal

what they are actually releasing into the environment on an anVerDate 11-MAY-2000 12:23 Nov 14, 2006 Jkt 000000 PO 00000 Frm 00039 Fmt 6633 Sfmt 6633 D:\DOCS\30593.TXT HGOVREF1 PsN: HGOVREF1
36

nual basis. It can be, over 1 year it is not a significant amount. But

if it is an annual accumulation, it can be disastrous in some cases

where you have companies in operation for 10, 20, 30 years.

So I would just like your response to that. Why would that not

be a danger? Why would it be necessary to conceal that from the

public?

Mr. MANNIX. There is no intent to conceal anything from the

public. There are requirements that a company must meet before

it is allowed to use Form A in place of Form R.

Mr. LYNCH. What would those be?

Mr. MANNIX. For toxic chemicals, PBT chemicals, persistent biocumulative and toxic chemicals, those reporters may use Form A

but only if they have no releases to the environment. They must

not exceed a million pounds of manufacture, processing or otherwise use for the chemical, and must not exceed 500 pounds of recycling, energy recovery or treatment of the chemical.

Those are thresholds that the agency feels will be protective

while relieving the burden. They have looked at the Form Rs that

they have been getting from these companies and decided that for

those categories, the information, the extra information they get on

Form R is not useful. So that is the basis of the proposal that they

have come out with.

Mr. LYNCH. It would also allow expanded use of Form A for nonPBTs by changing the maximum annual reportable amount from

less than 500 pounds to less than 5,000. So we are going from a

500 pound limit to a 5,000 pound limit, though.

Mr. MANNIX. That is correct. For chemicals that are not persistent, biocumulative and toxic, they are raising the threshold for reporting.

Mr. LYNCH. In cases like what we are going through with

Katrina and we want to know what is on the site and how much

of it is on the site, all of that has escaped. I mean, I have Form

R here. It is fairly detailed with respect to the amounts, how it is

stored, how much is actually contaminating onsite property. It has

a lot of useful information.

The Form A that you are suggesting that these companies now

be able to use just says, tell us what the substances are on your

site.

Mr. MANNIX. The Agency is learning a lot from Katrina and Rita.

I am sure there will be cases where we think we need to collect

more information in advance of a disaster so we know what is

going to happen.

We have also found a lot of cases where our regulations have

been getting in the way of the recovery efforts. I am sure you are

aware of some of those. But those lessons will be incorporated into

our future decisions.

Mr. LYNCH. OK. Mr. Sullivan, you expressed a fondness for the

Crain study. I know that the last one you mentioned, it was roundly criticized, and I think rightly so. The Crain study before, we

could not get them to replicate their results, they would not release

their methodology, how they came up with the numbers that they

came up with before. It was a total mystery. And they couldn’t explain it or defend it.

37

They refused to quantify the benefit of regulations when lives

were saved or when people were not exposed to dangerous chemicals. That benefit got a zero, zero. There was no value to a regulation that prevented toxic substances from coming into contact with

the citizenry. It got zero in their study.

The methodology this time, did we talk about the benefit to the,

is that factored in, the benefit to the environment and to the people

in the area? Is that at all considered in this study?

Mr. SULLIVAN. Congressman, Dr. Crain, who at first worked with

Professor Hopkins on this study, did not actually flesh out the benefits. This is a cost impact study. The benefits that you are referring to are categorized by law once a year by OMB’s Office of Information and Regulatory Affairs in an annual report on the costs and

benefits of regulations.

The Crain study that my office pays for is very narrow. It has

its blinders on specific to the regulatory burden. We do not estimate costs. When I talk about its constructive criticism, Dr. Crain

has committed not only to laying out the methodology in greater

detail in the report, but also certainly would be willing to discuss

the methodology with this committee and anyone else. We had him

down here actually last week for that specific purpose.

He is anxious not only in showing folks how the methodology is

stronger in this study, but he also wants to know how it can be

even better 4 years from now. I think this committee deserves credit for looking into what are some of the glitches in the methodology

of the report. Because of that in part, the report gets better every

time. I think one acknowledgement that the committee made last

time we met was, it may not be the best study, but it is the only

study that documents the impact, the disproportionate impact on

small versus large. It is because of that has gotten as much attention as it has.

Mr. LYNCH. But the——

Ms. MILLER. Excuse me. The gentleman’s time has expired. We

will come back for a second round of questioning.

I would like to recognize Mr. Westmoreland.

Mr. WESTMORELAND. Thank you, Madam Chairman.

Mr. Mannix, I apologize for you only being here 8 days. Are you

the only Associate Administrator at the EPA?

Mr. MANNIX. No, I am not. Several people bear that title. I am

the Associate Administrator for Policy, Economics and Innovation.

Mr. WESTMORELAND. I agree with Mr. Lynch, I think it is a

shame that you had to come here, only being on the job for 8 days.

Let me ask you a question. In your testimony, you talk about the

diesel requirements for off-road and the stringent fuel requirements. As I have been questioned about high fuel prices and regulations and stuff, I think that the one Government agency I point

my finger to the most for the high price of fuel is the EPA. If people ask me about the high cost of manufacturing, I point my finger

to the EPA.

Because I think the EPA is an agency that took legislative intent

of the Clean Air Act and wrote rules and regulations that have put

a burden on this country that we are continually trying to dig out

of when it comes to competing with manufacturers across this

globe. When it comes to burning all the different types of fuels that

38

we have to burn, our refineries, and of course, you know, our infrastructure system was never set up to carry 50, 60, 70, 80 different

types of fuels that we make.

And now we are going to come up with something different for

the construction business, off-road use of diesel. What part sulfur

content is in off-road diesel compared to on-road diesel now, and

will this off-road diesel go to the on-road diesel content?

Mr. MANNIX. That is a question I don’t know the answer to.

Mr. WESTMORELAND. Well, it is in your statement about how

good it is.

Mr. MANNIX. I will have to get back to you with details on the

specific content level in diesel regulations. Your general point about

the variety of fuels is one that the EPA is very sensitive to and has

been particularly sensitive to in the wake of the hurricanes and the

constraint on our fuel supply. We have put in place several waivers

to allow fuels to reach the public and reach where they are needed

without damaging catalytic converters and causing public health

problems.

We are in the process of taking a serious look at the effect of

EPA’s regulations on fuel supply in the short run and the long run.

At the same time, we have to move forward with the regulations

and programs that we are charged to pursue to protect public

health and the environment and help the States achieve the National Ambient Air Quality Standards. But we are sensitive to that

variety of fuels question.

Mr. WESTMORELAND. I would like to give you a list of questions

you can come back with some answers. One of them would be, what

would you say the total cost has been on the oil companies, refineries or whatever, automobile manufacturers and others, power

plants, the total cost of cleaning the air to the point it is now? And

how many lives do you think it has saved up to this point?

And the next question is this: How clean is clean? Right now, we

have a lot of people that have to use oxygen. They can’t breathe.

The way we are going, right now if you hook yourself up to a hose

in your car, it kills you, carbon monoxide poisoning. Pretty soon we

will have people that will just be able to hook up to their exhaust

pipe and breathe it rather than oxygen. Because it is going to be

cleaner.

So I think we need to understand how clean we want to get, not

only for our air but for our water, and at what cost we are willing

to get to that point and really, how many lives are we saving and

what is it doing, and would that money be better spent scanning

everybody for cancer, giving everybody an MRI, testing everybody,

all women for breast cancer, men for prostate, colon cancer, all

these other things?

So I think those are some answers, some real world answers that

the EPA needs to look at, rather than coming up with political answers to real problems.

Thank you, ma’am.

Ms. MILLER. Mr. Van Hollen.

Mr. VAN HOLLEN. Thank you, Madam Chairman.

Let me thank both of you for your testimony. I have some questions related to the proposed changes to the RCRA rules on the

transport of handling of hazardous waste, particularly with respect

39

to hazardous waste when it is headed to a recycling facility. Are

you familiar with that rule proposal, Mr. Mannix?

Mr. MANNIX. Only superficially, I am afraid.

Mr. VAN HOLLEN. OK, well, let me ask you this. Do you know,

under the proposed rule, how much hazardous waste that is currently subject to the reporting and tracking requirements under

RCRA and the manifest rules that apply, in order to protect the

public health from hazardous materials, how much of that hazardous waste, under your proposal, would no longer be subject to that

regulation?

Mr. MANNIX. I will have to submit an answer for the record, Mr.

Van Hollen.

Mr. VAN HOLLEN. All right. My understanding is it is about 3 billion pounds of hazardous waste. But I would be interested in your

information for the record on that.

Do you know with respect to, do you know the general scheme

of this proposal that has been made, in other words, what it is designed to do?

Mr. MANNIX. In this report, we have a couple of regulations in

the hazardous waste area. I am not sure which one you are referring to.

Mr. VAN HOLLEN. This is a proposal that has been described in

68 Federal Register, pages 61562, actually I think beginning 61560.

And the notice says, ‘‘Today’s proposal is deregulatory in nature, in

that certain recyclable materials that have heretofore been subject

to hazardous waste regulations would no longer be regulated under

the Hazardous Waste Regulatory System.’’ You go on to change the

definition of hazardous waste, essentially exempt hazardous wastes

that are intended to be recycled, as I understand it, from many of

the RCRA regulations with respect to reporting and training of the

personnel involved in the transport of those kinds of materials in

order to——

Mr. MANNIX. Yes, I am familiar with that one, and the intent is

to encourage recycling, so that the waste is not disposed of in the

environment. Those wastes are generally, for example, if they meet

a certain threshold, if they have valuable metals content above a

certain threshold, and if they lack contaminants that we would be

concerned about, we would want to encourage those metals to be

recycled, rather than disposed of as waste.

The regulations were getting in the way, and I think we will get

a better environmental outcome by modifying the definition.

Mr. VAN HOLLEN. There is no doubt that we want to encourage

recycling. I am not sure why you need to change the definition to

do that. Can you tell me why it will encourage more recycling to

eliminate the protections that are currently in place regarding the

training of personnel, requirements for handling of hazardous

waste, the information you are supposed to keep on the transport

of hazardous waste from the generator to, in this case, the recycler?

Those protections are in place to make sure the companies are

doing and disposing of it as they say they are. Can you tell me why

that is in the public interest, to eliminate those requirements?

Mr. MANNIX. Because those, by discouraging recycling, we are

encouraging, inadvertently, the regulations are encouraging the

production of more hazardous waste.

40

Mr. VAN HOLLEN. How does it discourage recycling to require

someone to report where they are transporting the hazardous

waste and how it is being disposed of in some detail? Doesn’t that

in fact ensure that it is going to the recycler as opposed to going

somewhere else?

Mr. MANNIX. Well, it may well be recycled onsite. It may not be

transported. The point is that to treat it as hazardous waste raises

the cost of both disposing of it as waste and recycling it. The recycling process is not, cannot always economically be done and comply with all the requirements that you are treating, what is essentially a product in process. By treating it as a hazardous waste you

raise the cost and it makes it no longer worthwhile to try to recover

those metals.

We think we will get a better environmental outcome by allowing

recycling and that we are not reducing protection.

Mr. VAN HOLLEN. Let me ask you this, I see my time is almost

up. I can understand making an exemption for recycling onsite. I

understand, and there is a court case to that effect. But we are

talking about, as I understand your rule, it is wide open. You can

be transporting the hazardous waste cross-country, to any other facility.

Are you aware of the fact that many of the current Superfund

sites are in fact recycling sites?

Mr. MANNIX. Yes.

Mr. VAN HOLLEN. Why wouldn’t we therefore want to make sure

that the hazardous wastes that are generated and disposed of at

those sites, that we know what is in that waste and we know that

it is being properly regulated, so we don’t create more Superfund

sites?

Mr. MANNIX. We certainly don’t want to create more Superfund

sites. I believe the rule has protections in it that are appropriate

for recycled materials, and when hazardous wastes are generated

and disposed of, the hazardous waste definitions and regulations

still apply. As I said, our expectation is that this will encourage recycling and reduce the amount of metals that are being disposed

of in the environment. So that is the better environmental outcome

we are seeking.

Mr. VAN HOLLEN. Madam Chairman, if I could, is it appropriate

to request that EPA provide us with a list of those recycling sites

which are now also Superfund sites?

Ms. MILLER. Certainly. We will ask that you respond to the committee with that.

Mr. VAN HOLLEN. Thank you.

Ms. MILLER. I just have one other question, Mr. Mannix, in regard to a follow-up to Mr. Van Hollen about recycling. Some of the

recommendations actually said to change the definition of some of

the different types, like changing the definition of solid waste to

make it easier to try to recycle that waste.

Do you have any comment? Are you knowledgeable about how

the EPA might be trying to make it easier to recycle waste from

electroplating operations?

Mr. MANNIX. We did get a request from the electroplating industry. We have, and I can’t tell you what this stands for, but F006

wastewater treatment sludges, which we are trying to encourage

41

recycling for. That is one of the major waste streams that I was

discussing with Mr. Van Hollen. This is part of a much larger effort

within the agency to look at where our regulations are discouraging

recycling. It is a theme we have heard in many contexts. We are

looking at all our programs to see where that might be the case

and where we can encourage materials to go to their highest and

best use when that is not to be disposed of in the environment.

Ms. MILLER. If you could, perhaps you could get back to me with

a more specific answer on that. I do have a number of electroplating operations in my district. I know they have been trying to comply with EPA regulations. In our particular area, they are all customers of the Detroit water and sewer system, and I know they

have been spending tens of thousands of dollars to try and comply

with EPA regulations about that.

So if you could get back to me with a more specific answer on

that, I would be interested.

Mr. MANNIX. I will. And the POTW regulations that are announced today will also affect those facilities that are connected to

publicly owned treatment works.

Ms. MILLER. Thank you.

Mr. Sullivan.

Mr. SULLIVAN. Madam Chair, I think one thing that certainly deserves attention here is that EPA’s regulatory relief is done under

the acknowledgement that some of these definitions are out of date.

The definition of recycling and the definition of hazardous waste is

out of date. From a small business owner’s perspective, there is a

small company in Connecticut. I had the pleasure of meeting with

them a few years ago. Here is a small company that is taking in

computers from all over the United States, and trying to do the

right thing, trying to make sure that metals and other potentially

dangerous materials do not end up in landfills.

They were telling me that the laws, the definitions, treat them

as a polluter. And all of the rules and regulations, the RCRA Subtitle C definition that bumps you into the hazardous realm, are out

of date to discourage those types of companies from actually doing

the right thing, and quite frankly, turning a profit. Because it is

less expensive in redoing a circuit board, wiping out all of the confidential information and then putting that computer back into use.

It is much more environmentally sound to do that than to just

throw them all out in a landfill and then start all over again.

So I think this committee, to put things in a little bit of perspective, from the small business owners’ perspective that come to me

all the time, they are frustrated that some of these legal terms are

out of date and do not reflect the current industry practice, nor do

they incentivize these companies to do the right thing. From an

electroplating sludge perspective, here is the metals industry that

wants to do the right thing, but the laws get in the way, because

they don’t encourage the onsite recycling and other technological

advances that make their processes more environmentally safe.

Ms. MILLER. Thank you. Mr. Lynch.

Mr. LYNCH. Thank you.

Mr. Sullivan, I want to get right back to the Crain study. You

understand that, at least in my State, I will give you a good example, W.R. Grace, a chemical company in our State. I believe that

42

it might have been compliant with the regulations at that time, but

they released a lot of cancer-causing agents into the groundwater

about Woburn, MA. We had dozens of kids die of, it was near a

playground, and we had dozens of kids die of cancer as a result of

their negligence.

Now, that was a huge, what in economists terms is called an externality. In other words, it was cheaper for W.R. Grace to dump

their chemicals as a business. But the cost of their production was

borne by those families and by those kids.

Now, what you are telling me is that the Crain study doesn’t

take into any costs borne by the families, by those kids. You are

saying that they put the blinders on. Well, you are feeding this information to Congress, and we cannot put the blinders on, nor

should we.

So when you say the study is better than it was before, it was

because there was tremendous room for improvement. But until a

study is presented here that shows us the costs that are shifted

from the manufacturing industry onto regular families just trying

to raise their kids in a clean environment, until you quantify that,

and it is quantifiable, give us an estimate rather than just say, we

are not going to consider any of it.

Any proposal that suggested they are informing Congress should

consider all the costs, a cost benefit analysis that is so important

to this committee. We want to see the costs to everyone, not just

costs that are being shifted out of the industry that you represent,

but the costs that are also now being shifted to innocent families

because of the relaxation of some of these regulations.

So in fairness, we want the whole picture. We can’t put the

blinders on. You have that luxury, we do not.

Second——

Mr. SULLIVAN. May I respond to that, please?

Mr. LYNCH. Certainly, yes, sir.

Mr. SULLIVAN. First of all, your State is also my State. I am very

happy to have grown up in the Commonwealth of Massachusetts.

I couldn’t agree with you more about taking the blinders off. That

is why the annual report on the costs and benefits coming from the

Office of Management and Budget provides us with so much value.

The criticisms of the Crain study ironically, from a methodology

perspective, weren’t on what are characterized by economists as social regulation. The criticism was on the economic regulation,

which is a different part of the report. We haven’t talked much

about it. That methodology was tightened by using the OECD survey and information.

So the criticism of methodology that has come up in the past

really was not on environmental regulations. To respond to the

W.R. Grace situation, which is terrible, and also the communities

affected by spills and other situations, are terrible. That is one of

the problems about us having our blinders on the terms that we

are using today. It is the toxics release inventory.

I hear release, I think of Chernobyl. But that is not the case. Release, as it is defined legally, within TRI, is about the company’s

own management in-house of their chemicals. And also encouraging them to do the right thing, to send them to a licensed recycling

facility. Small businesses get very frustrated about trying to do the

43

right thing, and largely doing the right thing, but then be criticized

as being polluters because they have to fill out all these forms that

say, I am a polluter, when in fact they are not. They are effectively

managing their waste.

So the terminology I think that we get caught in as fellow attorneys I think does deserve to have the blinders kind of released a

little bit and put in the proper context. Because the TRI reforms

that EPA is showing leadership on will not cover up spills. What

it will do is encourage more folks to effectively manage the waste

they have in-house so that they become even better corporate citizens.

Mr. LYNCH. Thank you. I do want to say, in the first part, the

Crain study, if you read the criticisms that I read, it was very

broadly based about what the Crain Hopkins study considered,

what they didn’t consider, what methodology applied, their reluctance to publish the methodology, and also the inability of any

other scientist to be able to replicate the results, an objective one.

So there were round criticisms of that study.

Make no mistake, though, we have to agree that by going to

Form A versus Form R, less information, less information is available to the public. That is the plain and simple result of this. This

is a reduction in reporting, a raising of the thresholds in some

cases where you had to report 500 pounds before, now it’s 5,000,

you are raising the bar a little bit so they don’t have to report as

quickly. The other thing I want to talk about, RCRA, you are entirely right when you say the definitions are outdated. Definitions

are outdated.

But the industry proposal that you have put here is not about

refining definitions. The industry proposal that you have supported

by OMB is to eliminate, to do away with RCRA protections for any

hazardous material. It is a blanket wipeout. So you are not saying,

let’s fine-tune this, let’s fine-tune this, let’s change this, OK, we

have computers here, it is not that. It would wipe out any hazardous material that is being recycled.

Now, a company could say, we have targeted this group of substances or this amount of property, I am sorry, amount of substance on our property for recycling use, and that would take it out

from under RCRA regulations. Now, they may be legitimate in

their intent to do so, but again, it provides less information about

what is going on on their site, and we frankly think that more information to the public is beneficial.

We understand that the byproduct of manufacturing is in some

cases this pollution. We just want information to be able to guide

the opinions and the actions of local communities in dealing with

manufacturing facilities in their midst. That’s it.

Mr. SULLIVAN. I think that the community leaders certainly all

over the country who many times are small businesses find common ground in wanting to be rewarded for doing the right thing,

and that is to encourage recycling, to encourage bringing hazardous

materials and substances to licensed recycling facilities and so

forth.

I am pleased that we do have common ground in acknowledging

that many of the terms and laws are out of date. I would be happy

to work with this committee to make sure that the Crain study is

44

even better. We have no, we are not hiding the methodology at all,

I can assure the Congressman that there is nothing to hide in the

methodology.

I can give this committee assurances that while we will be focusing still on the cost aspect of it and leave it up to our colleagues

within individual agencies and OMB to flesh out the benefits, we

would like the methodology to be even better 4 years from now.

Ms. MILLER. Mr. Westmoreland.

Mr. WESTMORELAND. Thank you.

Mr. Sullivan, isn’t it true that sometimes a lot of these forms

that small businesses or businesses in general are required to fill

out are just kept in a file, may not ever be looked at and are really

used for ammunition for lawsuits?

Mr. SULLIVAN. I don’t know whether or not they are just ammunition for lawsuits. I think that the information that is provided in

forms, if it is used by EPA to gauge where hot spots are, where

they can better utilize their enforcement resources, then that is one

thing.

But to fill out a form that is either duplicative of other information already provided to the Federal Government or information

that has no contextual value to the State, Federal agency or the

community, I think is a waste of that business’s time. That is what

we hear more and more.

I think EPA’s reforms saying, let’s let more businesses use the

simple form, in conjunction with saying to all of the American public, maybe this information can be better contextualized by really

stepping back and not just pushing out data, but in fact examining

that data on a biennial manner and see whether or not the communities will have more useful information than they currently do.

I will analogize it to the census. The census, the long forms come

out every 10 years, the short forms every 5 years. Many of you

have probably heard from your constituents when they get the long

form. There is a letter that says, under penalty of law, fill this out.

It is a tremendous burden.

But the information used to set your congressional districts, to

designate educational resources and others is valuable. But it is

valuable because the Census Bureau steps back after assessing

those forms and does tremendous things with the data. That same

type of attention and focus on the contextual information needs to

be borne in environmental reports, which is part of what EPA is

setting out to do now.

Mr. WESTMORELAND. So basically, the simpler the form in reality, it may be a safer form in that it makes the agency look closer

at the information that is on that form?

Mr. SULLIVAN. The simpler form, combined with making sure

that form for certain filers is filed every other year, so the agency

has a year and a half to really assess the data and contextualize

it. Yes, it would likely provide better community information.

Mr. WESTMORELAND. Thank you.

Mr. Mannix, let’s talk about hazardous waste for a minute. When

a company has hazardous waste and disposing of it is done in different manners, I am assuming some people have a jobber that

comes by and actually may pick up a 55 gallon barrel or a vat or

such into another compartment or whatever, once that jobber

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leaves the site, how do you have a record of what he does with that

hazardous waste?

Mr. MANNIX. I believe we have a manifest system in place that

allows the agency to track shipments and to determine the source

and determine the fate.

Mr. WESTMORELAND. So you have a manifest system that, the

jobber comes in, picks it up from XYZ coating facility, and he tells

them he is going to take this material to a certain location or a certain disposal site and dump it. Let’s say that guy just takes it and

stores it in a warehouse. Would responsibility fall on the manufacturer or on the jobber or on the guy that had the warehouse?

Mr. MANNIX. I am not sure I can answer questions about liability

in a hypothetical situation. But the manifest system allows the

agency to find out whether the waste reached its destination. The

handlers are required to have permits, the path can be tracked.

There are financial assurance requirements to make sure that

someone doesn’t just walk away from it and go bankrupt with no

ability to remediate it.

Mr. WESTMORELAND. So if the jobber would report to you where

it was disposed of, and to the place where he picked it up, and if

he didn’t do that, then he would be in trouble, correct?

Mr. MANNIX. Yes.

Mr. WESTMORELAND. OK. And exactly, and Mr. Sullivan, do you

all do a cost benefit analysis also? Does EPA, do both of you do

them independently of each other?

Mr. SULLIVAN. Actually, our office relies initially on the assessments by EPA. We bring small businesses to the table to find out

whether or not the cost assessments played themselves out in Main

Street small business from an accuracy perspective. But we rely

very much on the analysis done by every agency, including EPA.

Mr. WESTMORELAND. OK. Mr. Mannix, is that cost benefit analysis, is it made public and is your methodology, is it pretty much

listed out into how you do this?

Mr. MANNIX. We run a transparent process. We do benefit cost

analyses as appropriate for individual regulations. We also periodically do studies of the benefits and costs of say, the air programs,

to try to get a more global perspective on those programs. I am not

100 percent certain to state this categorically, but I believe we always include both the benefits and the costs.

Mr. WESTMORELAND. OK. One last question. Do you have one on

the off-road diesel initiative?

Mr. MANNIX. If we don’t, we will. [Laughter.]

Mr. WESTMORELAND. Could I get a copy of it?

Mr. MANNIX. Yes.

Mr. WESTMORELAND. Thank you.

Ms. MILLER. Mr. Van Hollen, do you have a second round of

questions?

Mr. VAN HOLLEN. I do, thank you, Madam Chairman.

First of all, Mr. Sullivan, you made the point about the computers. I think that is a good one, and I think that to the extent the

definitions need to be updated to make sure we don’t have unintended consequences, I think you are going to find agreement on

that.

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I don’t think that is what this EPA or OMB proposal, I think it

is much more broad than the issue you suggested we need to address. It is not a narrowly tailored solution. I would just pick up

on my colleague, Mr. Westmoreland, what he was saying with respect to the manifest.

Mr. Mannix, I assume you think that is a good idea, to have a

manifest so that we can track hazardous waste, would you agree

it is a good system to have?

Mr. MANNIX. Yes.

Mr. VAN HOLLEN. OK. My understanding is that this new proposal with respect to hazardous waste that is being transported to

a recycling facility would no longer be governed by that manifest

system, is that your understanding?

Mr. MANNIX. It would not be covered by the same manifest system. However, there will be requirements to ensure that the material really is being recycled.

Mr. VAN HOLLEN. Let me ask you this. Why would you put a less

protective system in place for the transport of the materials to

make sure that the materials arrived at the destination they said

they were going to arrive in, the recycling place, as opposed to

going somewhere else? Mr. Westmoreland described, and you responded to his question, said, we have this great manifest system.

Why do you want to throw that out with respect to 3 billion pounds

of hazardous waste annually being transported to recycling facilities?

Mr. MANNIX. I will give you the economist’s answer. With the situation Mr. Westmoreland described, where you have someone

transporting waste that has a negative value, you do have to worry

quite a lot that waste is going to disappear, and that he is going

to try to shed the liability associated with handling that waste.

That is why we have such a strict manifest system for waste.

When you are talking about a product that is being recycled that

has positive value, you still have to worry about whether it gets to

its destination and it is being recycled. But there is much less concern that someone is going to take this product that has value and

just dump it into a ditch on the side of the highway.

Mr. VAN HOLLEN. Well, let me just say, and I look forward to

getting the figures with respect to the recycling facilities that are

also Superfund sites. But my understanding is that of the first 60

filings under RCRA’s imminent and substantial endangerment authority, of those 60, 20 of them were recycling facilities.

So the suggestion that the recycling facilities always somehow do

the job of 100 percent transforming the incoming hazardous waste

into recyclable products, I think is wrong. I think there is a significant amount of non-recyclable and in some cases hazardous waste

that remains. There is an incentive, I think, to dump some of this

stuff.

It just seems to me that the current system that has been in

place with respect to the manifest is something that has worked

overall well for the protection of the public. While I think we can

certainly look at ways to improve and modernize the system, that

seems to me to open up a loophole that is not necessary to open

up.

Thank you, Madam Chairman.

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Ms. MILLER. Thank you very much.

We are going to excuse this panel and empanel our next group

of witnesses. We want to thank both of you gentlemen for your

time, and Mr. Mannix in particular. You have only been back to

the Agency for the last 8 days, so it is a sort of baptism by fire,

I think.

We are sorry Mr. Peacock was not able to come, but we certainly

do understand and appreciate his service in the horrific hurricane

attacks that are happening in the Gulf Coast region at this time.

Again, thank you very much.

We will take a quick recess while we get the next panel

empaneled. Thank you.

[Recess.]

Ms. MILLER. The committee will come to order.

If I could ask the witnesses to stand and raise your right hands.

[Witnesses sworn.]

Ms. MILLER. Thank you very much.

Our first witness the subcommittee will hear from today is Mr.

John Wagener. Mr. Wagener is the corporate director of environmental affairs with Mueller Industries. His manufacturing experience is clearly extensive, with involvement in chemicals, oil field

production, automotive and hot metal industries. Mr. Wagener has

served on several environmental committees, is presently the chairman of the Copper and Brass Fabricators Council’s environmental

committee.

He is also a professional engineer, registered in five States. He

is a certified safety professional and is a registered environmental

manager. He actually comes from the city of Port Huron, which is

in my congressional district, so we appreciate your transiting today

to our Nation’s Capital and look forward to your testimony, Mr.

Wagener.

STATEMENTS OF JOHN D. WAGENER, P.E., CORPORATE DIRECTOR OF ENVIRONMENTAL AFFAIRS, MUELLER INDUSTRIES,

INC.; CHRIS BAGLEY, REGULATORY COMPLIANCE MANAGER,

DAN CHEM INDUSTRIES, INC.; B.J. MASON, PRESIDENT, MIDATLANTIC FINISHING CORP.; AND SCOTT SLESINGER, VICE

PRESIDENT FOR GOVERNMENTAL AFFAIRS, THE ENVIRONMENTAL TECHNOLOGY COUNCIL

STATEMENT OF JOHN D. WAGENER

Mr. WAGENER. Good morning, Madam Chairman and members of

the committee. I am John Wagener, corporate director of environmental affairs for Mueller Industries.

Mueller is headquartered in Memphis, TN and operates 24 manufacturing and distribution facilities in the United States. We employ 3,400 Americans and produce copper, brass and aluminum

products. One of our major facilities is Mueller Brass, located in

Port Huron, MI, which is in the 10th Congressional District, where

I grew up and still reside to this day and maintain my office. Our

Port Huron plant employs over 500 people.

I am also the chairman of the environmental committee of the

Copper and Brass Fabricators Council. Thank you for inviting us

to appear before the committee today. Mueller and the Council apVerDate 11-MAY-2000 12:23 Nov 14, 2006 Jkt 000000 PO 00000 Frm 00051 Fmt 6633 Sfmt 6633 D:\DOCS\30593.TXT HGOVREF1 PsN: HGOVREF1
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preciate the committee’s review of the Office of Management and

Budget’s Information and Regulatory Affairs initiative on unnecessary regulation burdening manufacturers. The Regulatory Right to

Know Act of 2001 allowed OMB to solicit nominations for reform.

We submitted and currently have seven nominations under consideration. I am here today to briefly review just three of them, due

to time constraints this morning. I have selected these three because they are heavily loaded with common sense recommendations, and you have copies of the full text discussion.

I would like to note the improvements in the handling of the

nominations from the first year in 2002 to more recently in 2004.

In 2002, the nominating party had no opportunity to interact with

OMB or the agencies. In contrast, for the 2004 nominations, both

the OMB and the agencies have actively sought input from us on

three of our nominations to clarify what was being suggested as a

regulatory change and to give us an opportunity to work with the

agency to resolve any obstacles to making the change.

The first issue I have chosen to talk about is the definition of

VOCs. That appears in the Clean Air Act, VOC stands for volatile

organic compounds. Yet the definition EPA promulgates has no aspect whatsoever of volatility.

It does require that the chemical be photochemically reactive,

and then they go on to define it by exemption. They list those

chemicals that are exempted. There are 50 chemicals and families

of chemicals listed as not being a VOC for an air contaminant. Presumably, every other organic compound is a VOC.

To illustrate, I have here a bar of Ivory soap. It is not on the exempted list. There was a VOC emitted to the atmosphere, a VOC.

If you are strong enough, you can do that with bowling balls and

sawdust, all of which meet the definition EPA has promulgated for

VOCs.

I think a VOC ought to have an element of volatility in it when

they define it. Manufacturers need a definition that contains a

vapor pressure limit, just as Michigan did until a year ago, when

EPA forced Michigan to remove the vapor pressure limit in Michigan rules. This would both clarify and eliminate uncertainty when

manufacturers apply for permits. Uncertainty is a killer for manufacturing.

The second issue I would like to discuss is the lead toxic release

reporting. The TRI is widely looked upon as the mother of all environmental reports. A growing expense to manufacturers, we have

a chart over here that shows some of the growing costs of the TRI

report. I want to focus on in 2001, EPA incorrectly classified lead

as a PBT. We have talked a lot about TRI and PBT, persistent biocumulative and toxic materials.

This lowered the reporting threshold from the previous 10,000

pounds processed, not released, processed, to 100 pounds. Worse

yet, it eliminated the de minimis concentration threshold of 1 percent. So now, any concentration whatsoever has to be considered.

Lead is ubiquitous. It is a chemical that is found in low concentrations everywhere in our environments. It is in this drinking

water, it is in the ink in the paintings on the wall. It is in the brass

that is in front of you.

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Let me just show you how ridiculous, pencil, pencil sharpener.

See that? Now, don’t focus on the lead that was in that pencil, it

is graphite, it is not lead. It is wood. EPA has published guidance

that shows that wood has a naturally occurring lead content of 20

parts per million. What does that do? That means we have to track

our pencil sharpenings. That is ridiculous.

Let me be clear: it is not the form that is the eight pages we are

talking about. It is the burden of recordkeeping, weighing, measuring and so on that, all due to no de minimis. It could have been

20, it is 20, it could have been 1, it could have been 1 part per trillion, 1 part per quadrillion. There is no relief when there is no de

minimis. Everything needs a floor. We ask that EPA restore the de

minimis concentration and remove lead from the PBT consideration.

The last item of concern is thermal treatment of hazardous

waste. EPA allows generators currently to treat their hazardous

waste to reduce volume or toxicity. However, they exclude generators from treating it thermally. Where that applies to combustion

and incineration, there is some logic there.

Unfortunately, they lump into this the simple evaporation of

water into this category. That isn’t exactly true, because EPA does

allow the evaporation of water from certain wastewater treatment

sludges. We feel that manufacturers should be allowed to remove

the excess water out of extremely dilute hazardous waste materials, to give you an example, something that contains 20 parts per

million lead, the rest all being water is treated as hazardous waste.

I think we need to allow them to reduce the amount of water and

it will still be shipped as hazardous waste.

We have met with the agency and they have been talking to us

on that issue. But we feel a proposal is a long way off.

[The prepared statement of Mr. Wagener follows:]

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Ms. MILLER. The subcommittee will now hear from Chris Bagley.

Mr. Bagley is the EH&S manager for DanChem Technologies. His

experience includes projects supporting many different clients in

both industry and Government, including the EPA. His primary

focus has been on multimedia, including air emission permitting,

wastewater characterization and process studies and contaminated

site investigations.

I will ask the witnesses again to please, in the interest of time,

pay attention to the lights there. Again, when you see the yellow

light, you know you have about a minute left, and the red is your

full 5 minutes. We can always enter testimony into the record.

Mr. Bagley.

STATEMENT OF CHRIS BAGLEY

Mr. BAGLEY. Good morning, Madam Chair and members of the

subcommittee. Thank you for the invitation to testify on some of

the regulations highlighted in the recent OMB report to Congress

on the impact of regulation on U.S. manufacturers.

My testimony today will focus on the Toxic Release Inventory

Program, the Oil Spill Prevention, Control and Countermeasures

regulations and the definition of solid waste regulations. My name

is Chris Bagley and I am the regulatory compliance manager for

DanChem Technologies in south central Virginia.

I am testifying on behalf of the Synthetic Organic Chemical Manufacturers Association [SOCMA], a trade association representing

the interests of custom and chemical specialty manufacturers, 89

percent of whom are small businesses. I have been involved with

SOCMA for over 8 years, including a term as chair of the environment committee.

SOCMA has been working with the EPA on resolving each of

these rulemaking initiatives for at least a decade, with the goals

of reducing regulatory burden, clarifying uncertainties, and most

importantly, providing opportunities to recycle hazardous waste.

While I am encouraged by EPA’s recent efforts on all three issues,

I am here today in the hope that this committee will motivate EPA

to work quickly toward a final resolution. The decade of work by

SOCMA and others on each of these issues represents countless

hours and dollars lost to inefficiency and irresolute bureaucracy.

My testimony today addressing Toxic Release Inventory reporting requirements has been amended based upon recently received

good news from EPA. I believe that the proposed change to increase the availability of the simpler Form A report is a good one,

but EPA’s intention to explore alternate year reporting has the

greatest potential for burden reduction. To achieve this, I request

the distinguished members of this committee to assist EPA wherever possible in implementing alternate year reporting to help improve TRI information products.

SOCMA has also worked with EPA to revise the Oil Spill Prevention, Control and Countermeasure regulations. It is critical that

EPA clarify the remaining SPCC issues highlighted in our written

submission by the end of this October. Alternatively, EPA must

grant a compliance extension well before companies are forced to

squander resources in an effort to comply with uncertain and unclear requirements. Efforts by a regulated entity to revise and cerVerDate 11-MAY-2000 12:23 Nov 14, 2006 Jkt 000000 PO 00000 Frm 00060 Fmt 6633 Sfmt 6633 D:\DOCS\30593.TXT HGOVREF1 PsN: HGOVREF1
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tify SPCC plans are neither trivial nor inexpensive, on average

costing approximately $10,000 per facility.

The definition of solid waste under the Resource Conservation

and Recovery Act [RCRA], defines what materials are hazardous

waste. Additional regulations under RCRA strictly control all aspects of hazardous waste management, including activities such as

recycling and recovery. There are a number of instances where existing regulations prevent the recycling and recovery of valuable

materials from waste, one of the very activities that RCRA was established to promote.

The fact that so many stakeholders nominated this regulation for

the OMB report to Congress reflects the range of industries impacted by this rule. It also suggests the volume of lost opportunities for resource conservation that could be covered by revising the

definition of solid waste. To those of us in the chemical industry,

resource conservation is about more than protecting the environment. It is also sound business practice.

Under the EPA’s proposed approach, specialty batch chemical

sites would be severely limited in their hazardous waste recycling

options, because the proposal restricts recycling to the very narrowly defined generating industry. Not surprisingly, waste materials from one pharmaceutical plant are often considered waste materials by other pharmaceutical plants. Thus, no recycling opportunities are provided.

However, waste materials at a pharmaceutical plant might be

considered as valuable materials to a pesticide plant, a resin plant

or an adhesives plant. Our testimony details examples of some of

the cost savings that can be achieved.

To facilitate recycling by our chemical manufacturers, SOCMA

has proposed an industry sector based system in which recycling

could occur provided certain conditions are present. Some example

of the conditions we have proposed are, notifications to the EPA detailing where the recycled material was generated and where it will

be re-used, limiting the allowable storage time prior to recycling,

documentation that the material is stored, shipped and managed in

a manner to prevent a release to the environment and records

proving that the material was ultimately recycled.

In conclusion, after working for up to a decade with the EPA on

these three regulations, we have yet to reach the finish line, our

many years of efforts facing an uncertain future. SOCMA believes

that the scrutiny of OMB and the Congress is vital to speeding up

the work on resolving these issues. We must all work together to

create regulations that allow sustainable business development and

protect the environment.

Madam Chair, I welcome any questions that you or other members of the subcommittee may have.

[The prepared statement of Mr. Bagley follows:]

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Ms. MILLER. Thank you. We appreciate that.

Our next witness is B.J. Mason. He is the president and founder

of the Mid-Atlantic Finishing Corp. Mr. Mason founded the company in 1976 and it has become a premier national service finishing company, providing services to industries nationwide.

Mr. Mason is also a past president of the American

Electroplaters and Surface Finishing Society. Since Mid-Atlantic

Finishing opened its facility, it has provided its perspective to a

number of governmental agencies. We certainly look forward to

your testimony, sir, at this time, Mr. Mason.

STATEMENT OF B.J. MASON

Mr. MASON. You have introduced me, I thank you for being here.

I would just like to go to my real topic and summarize my talk.

You have a copy of my speech.

I want to talk to you today about what was previously mentioned

with the first panel, and that is RCRA’s F006. We in the metal finishing industry, particularly electroplaters, we produce a by-product of the Clean Water Act called F006. Exactly what that is is the

removing of metals from our waste stream to comply with the

Clean Water Act, i.e., metal hydroxide.

When F006 was first characterized, it was full of many, many

products, such as heavy metals, probably some cadmium, some lead

and some cyanide. Since the Clean Water Act and since many in

the metal finishing industry have complied with this act and

cleaned up our wastewater and our processes that we currently do,

this product has since changed drastically. We did a study, along

with EPA in the early 1990’s, that showed most of the F006 that

would be characterized previous to the early 1990’s. Looking at it

today, it is quite different. If it was characterized today, it would

not be a hazardous waste.

We have asked EPA back even before and during the common

sense initiative, which I was a part of, to reevaluate F006 and classify it as a non-haz, which means that it was classified as a nonhazardous waste, we could encourage people to recycle. It is estimated that the average metal finishing plant disposes of about

$50,000 a year in metals through F006. Most of that today, and I

am going to tell you my experience in knowing the industry as I

know it is, some 80 percent of that goes to a hazardous waste landfill, which is encapsulized in concrete and put in the ground. Thereby, as Mr. Van Hollen is saying, a potential site to clean up to get

metals out.

We all buy metals today. We all pay a lot more than we have

previously. I use a lot of silver in my facility, and the cost of silver

in the last year has increased about 40 percent. So has nickel, chromium, all those metals that we currently are putting into the

ground. I have to go out the week after I send them out for disposal, go buy some more to do it all over again.

What we have asked for is permission to recycle as a non-hazardous waste, which would allow recycling facilities today that will not

take hazardous wastes to be more prone to take those, and encourage the other metal finishers who currently are going to a landfill

to go to recycling because there would be a cost savings.

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The reason today that I feel, and a lot of our industry feels that

a lot of people go to the landfill is geographically, location and expense. It is a lot more expensive to ship a hazardous waste and dispose of it than it would be a non-haz. Inasmuch as we have showed

by characteristic that F006 is not hazardous, we have asked for

this some 15 years ago and are still waiting for EPA to make a decision on this particular product.

It would be very beneficial to a company like mine that spends $50,000 to dispose of metals we have to buy again to take that

money and put it back into a company like mine in the form of

health insurance for the employees or maybe even just a raise that

some of my employees haven’t had in the last 6 or 7 years.

In conclusion, Madam Chair, I strongly encourage this committee

to look at this regulation and to know that this industry is not

against regulating and tracking this product. All we want to do is

recover the metals that are in there that are becoming very valuable and very scarce. Thank you very much.

[The prepared statement of Mr. Mason follows:]

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Ms. MILLER. Thank you. And our final witness is Scott Slesinger.

He is the vice president for governmental affairs with the Environmental Technology Council. He is a veteran of Capitol Hill, where

he served most recently as a minority counsel for environment and

energy with the Senate Budget Committee. He previously worked

as the environmental counsel for Senator Lautenberg and negotiated proposals on such topics as the Superfund and the RCRA Reform, which included recycled battery legislation, and he played a

major staff role in the successful House-Senate conference of the

Safe Drinking Water Act.

I will say that I did not realize Mr. Van Hollen was here, I was

going to let Mr. Van Hollen introduce. You may add any remarks

that you have at this time, Mr. Van Hollen.

Mr. VAN HOLLEN. Thank you very much, Madam Chairman. I

am sorry I had to step out for something else briefly. Let me just

welcome Scott Slesinger, who is a constituent and somebody who

is, I think you can see from his resume, very well versed in these

issues. I want to thank him for being here and for his contributions

to our discussions. Thank you very much.

Ms. MILLER. Thank you. The floor is yours, sir.

STATEMENT OF SCOTT SLESINGER

Mr. SLESINGER. I want to thank the committee for the invitation

to appear.

The ETC represents environmental service companies that recycle, treat and dispose of industrial and hazardous waste. Many of

our companies are working with their Gulf Coast customers to

clean up the hazardous wastes left behind by Hurricane Katrina.

However, the vast majority of services we provide are for the normal processing of chemicals, pharmaceuticals and other wastes

from American industrial processes. Our facilities are stringently

regulated under RCRA and TSCA, among other environmental

health and safety laws.

Because our expertise is with RCRA and TSCA, I will limit my

comments to those OMB-endorsed proposals that affect our activities. First is the definition of solid waste. OMB states that EPA

should clarify that a material that is being sent for recycling is not

subject to regulation as a hazardous waste because it is not being

discarded.

OMB is correct that hazardous waste, when recycled, is subject

to RCRA management standards. This is exactly what Congress intended. In 1985, EPA promulgated the regulations that applied to

the recycling of hazardous waste and the courts have upheld those.

A broad exemption of all hazardous materials that are recycled

from even the minimum standards for tracking financial assurance

in safe management would create future Superfund sites and fail

to adequately protect public health. RCRA has established a comprehensive program for managing hazardous wastes. A manifest

system tracks the shipment of waste from cradle to grave, rules

and procedures for handling and storing waste, recordkeeping, employee training, waste characterization and accident prevention

plans are required. Facilities that treat, store and dispose of waste

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cial assurance so as not to saddle taxpayers with the cleanup burden if they close or have accidents.

Under the industry-recommended and OMB-endorsed proposal,

none of these RCRA safeguards described above would apply to recycled hazardous waste. Without tracking to ensure materials

reached the recycler, coupled with the fact that the generators will

probably still be paying the recyclers to take their waste, the economic incentive to dump the waste along the road will return for

the first time since 1976. This is the reason most States who have

commented on the EPA proposed rule rejected it.

OMB argues that this proposal’s goal is to encourage recycling

rather than disposal. However, our review of the economic analysis

of the original EPA proposal showed only a minuscule increase in

recycling. The fact is, recycling, if it makes sense, occurs today, removing some costs of regulations that will have a marginal increase in recycling but a large increase in risk.

This is really a proposal to encourage unregulated recycling of

toxic materials rather than recycling carried out properly by regulated facilities. EPA’s and States’ own files show numerous sites

where recyclers have caused significant taxpayer cleanup.

Why is this proposal so uniformly supported by so many waste

generators? We believe that the major economic benefit is diverting

Superfund liabilities from waste generators to State and Federal

taxpayers. Under current law, if a generator sends a waste to a recycling facility that subsequently becomes a Superfund site, the

Government can seek to recover cleanup from both the recycling facility and the waste generators. With the industry-endorsed proposed rule, the generators would be able to escape liability because

the hazardous materials being recycled would be considered a commodity instead of a waste.

All that being said, there certainly are ways that EPA can provide exclusions from the full RCRA standards for certain types of

waste materials that are recycled with conditions that are adequately protective. We are certainly interested in working with

EPA and OMB and generators on this type of reasonable regulatory reform.

The electroplating proposal, F006, is really a subset of the definition of solid waste. This sludge typically contains levels of cadmium, chromium, cyanide and lead. The industry’s argument is

that if the cost of recycling were lower by deregulating the handling, shipping and storing, that there would be less landfilling and

more recycling.

A survey of our members demonstrates the recyclable levels of

F006 are not being landfilled, as the electroplating industry has argued, but are already being recycled. If someone sends us sludges

with recyclable levels of lead, our companies will reclaim the metals. Removing this dangerous waste stream from regulation for a

minuscule or zero increase in recycling is offering an economic benefit for one industry which transfers the risk to the taxpayer if

something goes awry.

I do not mean by my testimony to discourage reasonable efforts

to lower regulatory burdens. For instance, we are working with our

customers, EPA, States and Chairman Davis to replace the RCRA

paper waste tracking manifest system mentioned above with an

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electronic system. The paper manifest tracking hazardous wastes

from cradle to grave is the largest continuing paperwork burden

that EPA places on industry. We want to move forward with electronic manifests that would save industry and States over $100

million a year. We would appreciate OMB’s assistance in combatting the bureaucratic obstacles that are delaying this worthwhile

project.

Thank you for hearing our views, and I look forward to your

questions.

[The prepared statement of Mr. Slesinger follows:]

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Ms. MILLER. Thank you very much.

I might start with Mr. Mason. I thought it was interesting when

you were talking about some of the various metals that your industry deals with and the unbelievable increase in costs. I was taking

some notes here, you said silver actually had gone up 40 percent,

and the chromium, I guess you said, some of the other different

types of elements that you use in your industry.

Can you talk a little bit about why that has happened in a year?

How do you get a 40 percent increase in silver in 1 year?

Mr. MASON. Why I think this is happening is with the tremendous growth in the Far East, in China, where they are consuming

huge amounts of all the metals, they are buying our metals, they

are buying our scrap. I think it is the fact that it is not as plentiful

as it was, and there is a whole big, new market to sell it in, this

gets this to go up, and of course, the general economy, everything

has gone up.

So I think that is the biggest reason that the metals have increased like that. The silver probably isn’t a particularly good example, because the silver market and the gold market are tied to

people who set the number for them, if somebody understood that

they would be a lot richer than probably anybody in this room.

That market is very volatile, and I think it depends a lot on the

currency of the United States versus the foreign currency and all

that.

But nickel metal, we do a lot of electronickel plating. We have

seen that cost go up every bit as much as that. I think it is because

of the use offshore.

Ms. MILLER. That is interesting, coming from Michigan obviously

we use a ton of steel, a lot of steel in our State. It is the exact analogy with the cost of steel as what you were just saying, because of

what is happening with the consumption in China.

Mr. MASON. There was a March article, March 2004, in National

Geographic, about China. I would encourage anybody to look at

that article on China’s growing pains. It just really tells everybody

how unlevel the playing field is. It is a tremendous article for anybody to look at. You can see that kind of growth and how we are

all suffering from it.

Ms. MILLER. That is again the purpose of this hearing and others

that we have had, is how we can actually level the playing field

from some of the regulatory burdens that we have that your industry and others are certainly sharing.

Mr. Wagener, if I could, you mentioned, I think you called it the

mother of all reporting for the TRI. And of course, announced last

week by the EPA is a burden reduction rule. Could you talk about

how you think that might impact, if you are familiar with the rule

that they issued last week and whether that would assist or not

your particular business, your industry?

Mr. WAGENER. It certainly would, and improve the perspective.

Let me take an opportunity here to correct what I think is a misconception that Mr. Lynch referred to in regard to the 5,000

pounds. That is not 5,000 pounds released. That is 5,000 pounds

processed. So you could take copper wire, for instance, and change

its diameter and that would be processing it. You could have zero

releases, but you would still have to report. So it is not 5,000

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pounds of releases that will go unreported. It will be reported. It

is the processing amount.

To give you some idea of what I spent last year, filing a report,

I put in over 200 hours. I had six additional people feeding information to me; 200 hours is 10 percent of the year. We are tracking

all kinds of issues, the PBT issues. Mueller is a significant user of

lead, brass is typically 21⁄2 percent lead. It is the magic that allows

it to be machined cleanly. So we process a lot of copper and a lot

of lead and of course zinc.

There is something else that I could speak to there, in terms of

the value of the TRI to the public. I have a very parochial view,

it is only what happens to me. But in my period with Mueller

Brass, we have received one phone call from the public in regard

to our TRI report. So I don’t know if that is a reflection of how

much the public is reading these things, but it was from an environmental group in New Jersey.

A young lady told me that they put these reports out to their

membership and that she had been reviewing our TRI report and

saw that we had recorded, she used the term ‘‘released to the environment’’ of so many million pounds of copper. Well, those are

skimmings off our melt pot which are recycled. They were not released to the environment. But the distinction in the report is very

vague.

Then her question to me, remember, brass is 66 percent copper,

here is her question. She said, we want to know what you are

doing to get copper out of your product. Bizarre. So I went on to

explain to her that it is our product. [Laughter.]

And that the faucet that she gets her drinking water from is

brass, chrome plated, and if she goes to her basement and looks at

the plumbing, she will see all these copper tubings through which

her water flows, a very important product.

So I am not sure how many of the public environmental groups

seem to look at it. I had the one phone call. But we put a lot of

money into producing this report. I hope I have addressed your

issue a little bit.

Ms. MILLER. Yes, you have, thank you very much.

Mr. Lynch.

Mr. LYNCH. Thank you.

Mr. Slesinger, I just have a quick question for you. As I understand it, the EPA’s proposed change to the definition of solid waste

under RCRA would allow a company to recycle hazardous materials

without having to comply with some of the current safety requirements, such as tracking the hazardous material that has been targeted as being recycled.

I am curious, under your reading, would this mean that the company would, well, let me put it the other way, could a company in

the process of recycling ship their stuff out of State or out of their

industry or out of their company for that matter, without being

tracked?

Mr. SLESINGER. The way the OMB and industry suggested proposal reads is that these things would be considered a commodity.

So if they were sent, for instance, to a RCRA facility for disposal,

they would be required to be manifest. But if it goes to a recycler,

unregulated, next door to us, even if we are shipping it across the

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country, it would not need a manifest, because it wouldn’t be shipping hazardous waste and it would therefore be exempt.

Mr. LYNCH. Same material?

Mr. SLESINGER. Exact same material.

Mr. LYNCH. OK. So we are talking about in some cases drums

of chemicals that would have been classified earlier as hazardous

waste, but now because they are targeted for recycling, they are totally off the screen now.

Mr. SLESINGER. That is the way the proposal reads, yes.

Mr. LYNCH. OK. Can you give some examples of the kinds of materials that the EPA and OMB proposals cover, and examples of

some of the dangers that might be presented in rolling back the

current tracking requirements and protections that we have right

now for properly handling waste?

Mr. SLESINGER. Hazardous waste is hazardous because it includes chemicals that are those that show up on the Superfund

chemicals of concern. We are talking about the benzenes, the lead,

the mercury. These are either contaminants or in some cases part

of the product. In certain situations, of course, lead is a valuable

product. If it gets into the air and is heated up, it can be a major

pollutant.

So it is all those chemicals that are regulated. But if they are,

again, sent for recycling under this proposal they would not be regulated.

Mr. LYNCH. OK. I did get notice that we have a vote pretty soon,

so I have one last quick question. That is, you mentioned, I didn’t

mention PCBs before in my remarks, but you brought it up in your

testimony. You talked about a proposal that would increase the

amount of PCBs that are allowed to be put in landfills.

In your opinion, what are the safety concerns around that

change?

Mr. SLESINGER. Right now, EPA lets very small amounts of PCBs

go into municipal landfills, generally from households that may

have a little bit left over in the paint they may be getting rid of,

or under very strict cleanups that I talk about in my testimony.

Under the proposal that OMB has endorsed, all cleanups allow

levels of 50 parts per million of PCBs into municipal landfills. In

fact, when EPA had a hearing on this, people representing the

Superfund sites on the Hudson River and Fox River suggested that

the sediment from those cleanups also be put into municipal landfills if they were under 50 parts per million.

EPA has never done a study to show that putting 50 parts per

million is safe in a landfill. Arguably, if you spread a little bit of

PCBs over hundreds of landfills, it is probably not an issue. But

if we are talking about thousands or tons of PCBs going into these

landfills, there is no science to say that is safe in a regular, municipal landfill with the regular garbage we throw out, versus a TSCA

regulated landfill that is built specifically to hold chemicals such as

PCBs.

Mr. LYNCH. OK, thank you. Madam Chair, I yield back.

Ms. MILLER. Thank you. Mr. Van Hollen.

Mr. VAN HOLLEN. Thank you, Madam Chairman.

Just to followup a little bit, Mr. Slesinger, with respect to some

of the issues that you have raised, have you had an opportunity to

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discuss these directly with officials at the EPA, and if so, what has

their response been?

Mr. SLESINGER. We, as I mentioned, are very willing to compromise and find some common ground. However, working with the

agency has been somewhat difficult. I think they see a hearing like

this, they see that the people working on this were called over to

the Commerce Department to show how they were working on this.

When we go over to talk to EPA on this, whenever we offer anything, they won’t even admit that this OMB proposal is the leading

one on the table. Everything we suggest, their response is, ‘‘everything is on the table.’’ You know, what time is it, ‘‘everything is on

the table.’’ It has really been hard to get them to start a dialog.

Hopefully, we would urge Members on both sides to urge them to

do that. I think there is common ground.

We agree with Mr. Mason, F006 in many cases is different than

it was when it was originally listed. There are ways that we could

lower some of the burdens on some of these things without hurting

the environment. But at this point, we have been running into a

solid wall at EPA and at OMB.

Mr. VAN HOLLEN. Thank you. Now, when you say that under the

new definition that you would be able to ship what is currently

hazardous waste to a recycling facility that is an unregulated facility, what do you mean by that? Would there be anything, any rules

governing the recycling facility?

Mr. SLESINGER. The recycling facility, if when it does its recycling leaves a hazardous waste residue, it will be regulated to handle that waste properly. However, the generator will now no longer

be responsible for any of that where he is today, and it is a safeguard to make sure the generator finds an appropriate recycler

who is going to do the right thing, because if he doesn’t, the generator would then be liable. That would go away.

We think there are ways that we can have these recyclers do

some things, such as at least financial assurance, to make sure

that the taxpayers don’t get caught with the bill if they fail. Training their employees to us seems like a good idea that we hope

would occur. But when EPA did its economic assessment of this

proposal, those were the savings. You wouldn’t have to waste

money training your employees or having financial assurance or

providing a spill protection plan. Maybe some of these things you

might want to do anyway, but when there is going to be price competition, we are afraid there is going to be a race to the bottom

with no regulatory protection.

Mr. VAN HOLLEN. All right. Mr. Bagley, as I understand the current rules, we are talking about the same material as has been testified to, if it is transferred right now to a disposal site, it would

have to go through all the manifest requirements, and under this

provision, if it is transferred to a recycling facility, it wouldn’t have

to go through all those manifest requirements, is that right? Is that

your understanding?

Mr. BAGLEY. No. Let me see if I can address the misconception

this way.

I respectfully disagree with the suggestion that industry supports

deregulating this material through creation of a recycling loophole.

The concern over creating new Superfund sites is certainly a conVerDate 11-MAY-2000 12:23 Nov 14, 2006 Jkt 000000 PO 00000 Frm 00089 Fmt 6633 Sfmt 6633 D:\DOCS\30593.TXT HGOVREF1 PsN: HGOVREF1
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cern that all of us share. However, those Superfund sites were created originally, back in the early days of RCRA, as Mr. Slesinger

alluded to in his testimony. EPA subsequently closed that loophole

through additional regulations that are still in place today.

Industry is not looking for a blanket wipeout or for a rollback of

those regulations. As I presented in my testimony today, lost recycling opportunities can be saved by revising the definition of solid

waste, not by eliminating it, and still provide for full documentation of where that material came from, where it is going to, what

was the final disposition of the recycled material and any other material generated as a result of that recycling activity.

Mr. VAN HOLLEN. If I could, just because the light is about to

move to red, with respect to the manifest information, the transfer

of the hazardous waste material and all the safeguards that are

currently in place to make sure that material is handled properly

and gets to the right destination, which it seems to me if we are

dealing with the same material for the transport of that material,

if it going to a recycling site or a disposal site, that information

should be the same for the protection of the public.

Do you have any objection to keeping the current requirements

and safeguards for the manifests in place with respect to reporting

and the transfer of the material to the final destination?

Mr. BAGLEY. That is a potential option. But under DOT regulations, just as if you are shipping, say, virgin MEK instead of

methyethylketone for recycling, you still have to have a bill of lading. So it may be that you can accomplish the same thing through

other existing regulations. The primary purpose or one of the primary purposes of the waste manifest being not just verifying that

the waste reached its destination and was received and disposed of,

but also to maintain compliance with DOT regulations.

So there may be some overlap there. I don’t think we are necessarily objectionable to what you are suggesting, but it may turn

out that there are other existing regulations that will also do the

job.

Mr. VAN HOLLEN. All right. I thank you, Madam Chair.

Ms. MILLER. All right, thank you very much. I certainly want to

extend our appreciation on behalf of the committee to all of the witnesses, the panelists that we have had today. Your testimony has

been very enlightening. Certainly I think it has given us a lot of

ideas and insight, suggestions on how we might approach the EPA

as we spotlight them in this particular hearing and the impact that

they are having on U.S. manufacturing.

Thank you very much. We will adjourn the hearing.

[Whereupon, at 12:15 p.m., the subcommittee was adjourned.]

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