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66–749 2011

GREEN ISN’T ALWAYS GOLD: ARE EPA 

REGULATIONS HARMING SMALL BUSINESSES? 

HEARING 

BEFORE THE

SUBCOMMITTEE ON OVERSIGHT, INVESTIGATIONS 

AND REGULATIONS 

OF THE

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

HEARING HELD 

MAY 12, 2011 

Small Business Committee Document Number 112–014 

Available via the GPO Website: http://www.fdsys.gov 


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(II) 

HOUSE COMMITTEE ON SMALL BUSINESS 

SAM GRAVES, Missouri, Chairman 

ROSCOE BARTLETT, Maryland 

STEVE CHABOT, Ohio 

STEVE KING, Iowa 

MIKE COFFMAN, Colorado 

MICK MULVANEY, South Carolina 

SCOTT TIPTON, Colorado 

CHUCK FLEISCHMANN, Tennessee 

JEFF LANDRY, Louisiana 

JAIME HERRERA BEUTLER, Washington 

ALLEN WEST, Florida 

RENEE ELLMERS, North Carolina 

JOE WALSH, Illinois 

LOU BARLETTA, Pennsylvania 

RICHARD HANNA, New York 

NYDIA VELA ́ ZQUEZ, New York, Ranking Member 

KURT SCHRADER, Oregon 

MARK CRITZ, Pennsylvania 

JASON ALTMIRE, Pennsylvania 

YVETTE CLARKE, New York 

JUDY CHU, California 

DAVID CICILLINE, Rhode Island 

CEDRIC RICHMOND, Louisiana 

GARY PETERS, Michigan 

BILL OWENS, New York 

BILL KEATING, Massachusetts 

LORI SALLEY, Staff Director 

PAUL SASS, Deputy Staff Director 

BARRY PINELES, Chief Counsel 

MICHAEL DAY, Minority Staff Director 


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C O N T E N T S 

Page 

OPENING STATEMENTS 

Hon. Mike Coffman .................................................................................................. 1 

Hon. Jason Altmire .................................................................................................. 2 

WITNESSES 

Mr. Glenn Johnston, Vice President of Regulatory Affairs, Gevo Inc., Englewood, CO ............................................................................................................... 4 

Mr. John Ward, Chairman, Citizens for Recycling First, Broomfield, CO ......... 15 

Mr. Bradford Muller, Vice President of Marketing & Corporate Communications, Charlotte Pipe and Foundry Company, Charlotte, NC .......................... 27 

APPENDIX 

Prepared Statements: 

Hon. Allen West ................................................................................................ 45 


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HEARING: GREEN ISN’T ALWAYS GOLD: ARE 

EPA REGULATIONS HARMING SMALL BUSINESSES? 

THURSDAY, MAY 12, 2011 

HOUSE OF REPRESENTATIVES,

COMMITTEE ON SMALL BUSINESS, 

SUBCOMMITTEE ON OVERSIGHT, 

INVESTIGATIONS AND REGULATIONS, 

Washington, DC. 

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

2360, Rayburn House Office Building. Hon. Mike Coffman (chairman of the Subcommittee) presiding. 

Present: Representatives Coffman, West, Landry, Altmire. 

Chairman COFFMAN. Good morning, everyone. And thank you for 

joining us. The hearing will now come to order. 

I thank all of you for joining us today for this hearing on EPA 

regulations and whether they are harming the ability of small businesses to compete, particularly in today’s difficult economic climate. 

I would like to extend special thanks to our witnesses for making 

the trip to the Capitol and taking time out of their schedules to discuss this issue with us here today. 

Our Subcommittee will hear directly from small business owners 

about how existing and proposed EPA regulations are affecting 

their industry and hindering their ability to remain profitable and 

grow their businesses. According to a 2010 report by the Office of 

Chief Counsel for Advocacy at the Small Business Administration, 

small businesses bear a significantly greater burden as a result of 

federal regulations than larger businesses. This report indicates 

that federal regulatory costs to small businesses per employee are 

$10,585, an amount that is 36 percent higher than the cost borne 

by larger employers. 

Under the leadership of Administrator Lisa Jackson, the EPA is 

in the process of developing and finalizing some 30 regulations and 

instituting new policy rules. The EPA has adopted a rigorous environmental agenda that gives little consideration to the impact on 

businesses in general and small businesses in particular. The actions of the EPA under Administrator Jackson are especially troubling due to their disregard for the Regulatory Flexibility Act, 

which seeks to reduce the undue burden of federal regulations on 

small businesses by requiring analysis of compliance costs and consideration of less onerous alternatives. 

Not only has EPA overlooked Federal law, but it has indicated 

a willingness to sidestep the president’s wishes as well. This has 


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been made especially evident in testimony received from Assistant 

Administrator Mathy Stanislaus at a House Energy and Commerce 

Subcommittee hearing on April 14th when he indicated that the 

EPA did not take into account job losses as the result of their rulemaking. This directly contradicts Executive Order 13563, which orders all federal entities to ‘‘impose the least burden on society,’’ 

taking into account ‘‘the cost of cumulative regulations’’ as well as 

requiring that agencies should ‘‘analyze any rules that are excessively burdensome,’’ speaking directly about small businesses 

which have accounted for about 70 percent of all new jobs in the 

United States. The EPA has also disregarded a January 18th presidential memorandum that solidifies the commitment of the Executive Branch to promote the importance of the Regulatory Flexibility 

Act to protect small businesses from onerous regulations. 

We owe it to our constituents to critically analyze the need for 

these regulations and the impact they will have on businesses in 

our districts, states, and country overall. It is paramount that regulations or rules that purport to protect the environment are balanced and do not turn a blind eye to the economic concerns of our 

nation’s small businesses. These businesses are the engine that 

drives our economy, without which no true recovery will be possible. 

I look forward to hearing from our witnesses on the real world 

effect of these EPA regulations and the implications for business 

growth and job creation. 

I now recognize Ranking Member Altmire for his opening statement. 

Mr. ALTMIRE. Thank you, Mr. Chairman. 

The mission of the Environmental Protection Agency is undisputed—protecting the public health and our natural resources. 

Every community in every congressional district depends on clear 

air and drinking water for their well-being and quality of life. Protecting natural resources and the health of every citizen through 

conservation and sensible regulation makes good business sense as 

a clean environment leads to a thriving community. However, in 

pursuing these goals, the federal government must do so carefully, 

making sure that we balance the benefits with the costs of the environmental regulations. Unfortunately, it has been small businesses which create two-thirds of all new jobs which have been 

most negatively impacted by EPA’s recent rules. 

For small businesses, the cost of complying with EPA regulations 

is substantial. For firms with fewer than 20 employees, they spend 

more than $4,000 per employee annually, which is double the 

amount spent by larger companies, to comply with federal regulations. As a result, some entrepreneurs are spending more on regulatory requirements than they are on expanding their businesses. 

In order to limit this burden, Congress enacted the Regulatory 

Flexibility Act in 1980 and the Small Business Regulatory Enforcement Act of 1986. Together these laws require the EPA to take into 

account the impact its regulations will have on small businesses. 

In some cases they have been successful at reducing compliance 

costs for small businesses, particularly with rules related to 

stormwater discharge from construction sites and emissions from 

diesel engines. 


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Unfortunately, such positive outcomes have been the exception 

rather than the rule. In too many instances, the EPA has not used 

the tools it has had at its disposal to write sensible rules that take 

into account the unique nature of small businesses. When promulgating its series of landmark greenhouse gas rules, the Agency 

failed to convene a small business advocacy review panel, excluding 

small firms from being heard on the wide-ranging rule. 

The EPA rationalized its disregard for the panel by limiting the 

rules research reach on small business through a tailoring rule 

that lessened the impact of the greenhouse gas regulations on 

smaller firms. Despite the EPA’s efforts, the SBA’s Office of Advocacy estimates that 1,200 businesses would still be subject to the 

new regulations. This effect and the overall cost on small firms 

could become even more significant when the tailoring rule expires. 

Instead of neglecting small businesses’ concerns, the EPA should 

have conducted meaningful outreach. More has to be done to ensure the Agency does not simply excuse itself from its obligations 

under the Regulatory Flexibility Act, particularly the review panel 

process. By strengthening these protections, we can strike an appropriate balance between regulations that protect the well-being 

of our communities but also limit costs they impose on small businesses. 

During today’s hearing we will be able to hear from small businesses and learn about their experiences with the EPA, ensuring 

that the concerns of small firms are heard is critical, and it is my 

hope, Mr. Chairman, that the EPA will follow our lead and increase its outreach to these job creators. In my home state of Pennsylvania, small businesses account for more than 98 percent of employer firms. They remain the backbone of the U.S. economy and 

are absolutely critical to job creation. It is essential that the federal 

government carefully balance the costs and benefits of environmental regulations so that these businesses are not harmed and 

our nation’s economic progress is not slowed. 

I want to thank all of our witnesses in advance for taking the 

time to travel here, giving up your time to be here. And I look forward to hearing your testimony. I yield back my time. 

Chairman COFFMAN. Thank you, Ranking Member Altmire. 

If Committee members have an opening statement prepared, I 

ask that they be submitted for the record. 

I would like to take a moment to explain the timing lights for 

those testifying today. You will each have five minutes to deliver 

your testimony. The light will start out as green. When you have 

one minute remaining, the light will turn yellow. And finally, it 

will turn red at the end of your five minutes. And I will ask that 

you try to keep to the time limit but I will be a little lenient as 

you finish. 


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STATEMENTS OF JOHN WARD, CHAIRMAN, CITIZENS FOR RECYCLING FIRST, BROOMFIELD, CO; GLENN JOHNSTON, VICE 

PRESIDENT OF REGULATORY AFFAIRS, GEVO INC., ENGLEWOOD, CO; BRADFORD MULLER, VICE PRESIDENT OF MARKETING AND CORPORATE COMMUNICATIONS, CHARLOTTE 

PIPE AND FOUNDRY COMPANY, CHARLOTTE, NC 

Chairman COFFMAN. It is my pleasure to introduce our first witness and my constituent, Glenn Johnston. 

Mr. Johnston is the Vice President of Regulatory Affairs at Gevo, 

Incorporated. Gevo is in the process of developing renewable alternatives to petroleum-based products that can be used in cars, airplanes, and even in synthetic rubber and plastics. We appreciate 

your testimony, Mr. Johnston. 

STATEMENT OF GLENN JOHNSTON 

Mr. JOHNSTON. Chairman Coffman, members of the Committee. 

I am honored to be with you this morning and discuss the great 

potential for isobutanol as an alternative transportation fuel in 

America and the current challenges we have with U.S. EPA regulations. 

Gevo is a leading renewable chemicals and advanced biofuels 

company. We are developing bio-based alternatives to petroleumbased products using a combination of synthetic biology and chemistry. We plan to produce isobutanol, a versatile chemical platform 

for liquid fuels and the petrochemical markets. 

Isobutanol has a broad market application as a solvent and a 

gasoline blend stock and can help refiners meet their renewable 

fuel and cleaner obligations. It can also be further processed using 

well known chemical processes used today into jet fuel and feed 

stocks for the production of synthetic rubber, plastics, and polyesters. Gevo’s technology is designed to retrofit existing ethanol 

plants and we are currently in the process of retrofitting an ethanol plant in southern Minnesota, which will come on line in the 

first half of 2012. 

Isobutanol is an important platform chemical with broad applications in large chemicals and fuel markets. As a drop-in product, 

isobutanol should allow customers to replace petroleum-derived 

raw materials with isobutanol-derived raw materials without modification to their equipment or production processes. Since 

isobutanol can be dropped into existing infrastructure, it provides 

for an easy integration into existing refining and petrochemical 

production processes. This type of technology is business born in 

America and is creating new jobs today to build the next generation of biofuels and make contributions towards reducing our dependence on foreign oil. 

We support the manner in which EPA has allowed the renewable 

fuel standard and advanced fuel mandates to continue despite 

shortfalls in some categories under the statute. This will help drive 

more gallons in the short term using technologies such as Gevo 

that is economically competitive with current oil prices. However, 

legacy EPA policies are creating supply chain challenges with second generation biofuels such as ourselves. Gevo and the advanced 

biofuels industry in general believe that EPA should review its regulatory regime and to the extent possible, should assure that 


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biofuels other than ethanol have equal and unfettered market access. 

The EPA’s one-pound waiver rule implementation is a regulatory 

obstacle to the development of second generation advanced biofuels. 

There is a relatively straightforward change that can be made to 

EPA’s testing regime that would eliminate this hurdle. Under the 

Clean Air Act and 40 CFR, gasoline containing between 9 and 10 

percent ethanol may exceed the revapor pressure, the RVP limit, 

for straight-line gasoline by one pound per square inch. EPA currently tests the RVP of gasoline by obtaining samples at retail outlets. 

Under current testing procedures, EPA protocol does not account 

for the presence of alcohol additives other than ethanol. Thus, if 

E10 is mixed with gasoline containing isobutanol or another dropin fuel, the resulting mixture would be found noncompliant because 

ethanol would be diluted below the 9 to 10 percent ratio required 

under the Clean Air Act for the RVP waiver. 

Due to the fact that testing occurs in the field, there currently 

is no way to determine the E10 prior to mixing with another alcohol-blended fuel. We would have to meet the RVP limit. A direct 

linear relationship exists between ethanol and isobutanol and RVP, 

allowing the extrapolation of the ethanol content of the fuel before 

it was mixed and thus determining its compliance. Through guidance or a simple revision in EPA regulations, EPA could require 

ASTM tests used to determine the ethanol content of a fuel to also 

determine the amount of isobutanol and other alcohols. In the 

event that isobutanol and/or other alcohols were present, the revised regulation or guidance with direct laboratory to extrapolate 

the RVP of the fuel or that the fuel had not been mixed with 

isobutanol in the first place. Revising the test regulations provides 

for a noncontroversial, easily implemented solution to a major barrier. 

In conclusion, significant amounts of progress have been made 

over the last three years by Gevo with isobutanol and its potential 

in the advanced biofuels sector. Isobutanol can make a significant 

contribution towards diversifying America’s world transportation 

fuels. 

Thank you for the opportunity to be with you today and I look 

forward to your questions. 

[The statement of Mr. Johnston follows:] 


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Chairman COFFMAN. Thank you, Mr. Johnston. 

Our next witness is Mr. John Ward, chairman of Citizens for Recycling First. Mr. Ward has vast experience in issues affecting the 

coal industry, previously serving as President of the American Coal 

Council and was a member of the National Coal Council. Today he 

will be speaking about EPA regulations affecting coal ash recycling. 

We look forward to hearing your testimony, Mr. Ward. 

STATEMENT OF JOHN WARD 

Mr. WARD. Thank you, Mr. Chairman, members of the Committee. Thank you for the opportunity to testify on this issue today. 

Citizens for Recycling First is comprised of about 1,500 individuals, most of whom are small businesses, and they are specifically 

interested in preserving and enhancing recycling opportunities for 

coal ash. 

In the decade from 1999 to 2009, our nation successfully recycled 

519 million tons of coal ash, about 38 percent of the coal ash that 

was produced in generating electricity. The businesses responsible 

for achieving this remarkable environmental success story are overwhelmingly small businesses. The utilities are not the recyclers. 

There is a network of small businesses who provide marketing 

services. There are companies who provide innovative technologies 

for using the coal ash. And the users themselves are overwhelmingly small businesses. For instance, 85 percent of the ready mix 

concrete producers in the United States have revenues under $30 

million. 

I appreciate the Committee’s topic, Green Isn’t Always Gold. In 

the case of EPA’s current coal ash regulatory process, the Agency’s 

actions are not only not gold; they are not even very green. In the 

Agency’s single-minded quest to gain more enforcement authority 

over the disposal of coal ash, EPA appears resolved to ignore the 

negative impacts of its actions on an entire recycling industry and 

the small businesses that comprise it. If EPA succeeds in getting 

the regulations it wants, our nation will end up putting hundreds 

of millions of tons more material into landfills rather than safely 

recycling it. And that is hardly a green result. 

Furthermore, EPA appears content to create regulatory uncertainty that is already harming the recycling industry, even though 

formal regulations have not been finalized. 

A year ago EPA proposed labeling coal ash as hazardous waste 

when it is disposed. When that idea was confronted by a wall of 

opposition from other government agencies, academicians, recyclers, coal ash users and more, EPA responded by simply slowing 

the process down. EPA officials have recently been quoted as saying it may be 2013 before the Agency gets around to proposing a 

final rule. In the meantime, the coal ash recycling industry is 

twisting in the wind with the unresolved question will coal ash be 

a hazardous waste or not? 

Now, a couple of things about coal ash. First of all, it does not 

qualify as a hazardous waste based on its toxicity. That is not an 

opinion; that is a scientific fact. The level of metals that are in coal 

ash are similar to the levels of metals in the materials that it replaces when it is recycled. 


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Secondly, EPA’s proposals for regulating coal ash disposal basically boil down to a regulatory turf grab. The EPA has proposed 

both a hazardous and nonhazardous regulatory approach. The 

landfill standards that they are proposing under both approaches 

are essentially the same. You do not get a better landfill by designating the material hazardous waste. 

So why are they doing it? Because by designating it hazardous 

waste they are able to take enforcement authority away from the 

states and take it for themselves. Now, we have talked to EPA and 

told them the devastating effects this has on recycling. And even 

in advance of the rule being finished, we are already seeing users 

of coal ash taking it out of their specifications because they are 

worried about potential legal liability or the health issues if it is 

really hazardous. We are seeing manufacturers of products that 

compete with recycled coal ash run ads with skulls and crossbones, 

talking about how coal ash may be a hazardous waste if EPA goes 

forward with this. We are now beginning to see commercial liability 

insurance policy exclusions for products that contain coal ash. 

Now, all of these concerns have been conveyed to EPA over the 

last two years in meetings and formal written testimony; in all 

eight of the EPA’s public hearings that were conducted last year. 

EPA’s response has been twofold. Number one, they have refused 

to evaluate the impacts on small businesses in the recycling sector. 

Their excuse is we are only regulating utilities. You people are an 

indirect effect; we do not have to look at it. Their second response 

has been a hazardous waste designation will actually be good for 

you. People are going to want to use more coal ash if it is designated a hazardous waste. I see you raising your eyebrows. It is 

a nonsensical proposition. My written testimony spells out exactly 

why it is. But the bottom line is, this is not about coal ash. This 

is about coal. And EPA is waging a war on coal and coal ash is another way for them to get at it. 

We need Congress’s help. Representative David McKinley has introduced a bill, H.R. 1391, which would prohibit EPA from regulating coal ash as a hazardous waste. It would not prohibit EPA 

from moving forward with improving landfill disposal standards. 

Remember, the landfill disposal standards under their nonhazardous approach are the same. But it would remove this regulatory 

uncertainty that is hanging over the heads of coal ash recyclers 

today and is already harming a tremendously environmentally beneficial business in our nation. 

Thank you very much for the opportunity to testify. 

[The statement of Mr. Ward follows:] 


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Chairman COFFMAN. Thank you, Mr. Ward. 

I would like now to introduce Mr. Bradford Muller, Vice President of Marketing for Charlotte Pipe and Foundry Company, a 110- 

year-old family-owned business located in Charlotte, North Carolina. The Subcommittee appreciates you taking the time to speak 

to us today, Mr. Muller. 

STATEMENT OF BRADFORD MULLER 

Mr. MULLER. Thank you, Chairman Coffman, Ranking Member 

Altmire, and members of the Subcommittee. Thank you for the opportunity to testify before you today on the question of whether 

EPA regulations are harming small business, in particular the 

metal casting industry. And the answer is unequivocally, yes. 

Charlotte Pipe and Foundry is a family-owned, fourth generation 

company. We have been manufacturing cast iron pipe and fittings 

for plumbing systems for 110 years. Charlotte Pipe is one of only 

three U.S. foundries left that make these products with dozens of 

competing foundries having closed their doors over the last two 

decades. 

Charlotte Pipe and the entire metal casting industry has been 

hard hit by this recession. The manufacturing sector has lost 2.2 

million jobs since the recession began and more than 150 metal 

casters have closed their doors, forcing thousands to lose their jobs. 

In our case, commercial construction, the primary market for our 

products, was down 64 percent from its peak in 2006 before rebounding slightly this year. Despite such a massive loss of volume, 

we have not laid off any of our 450 associates, sacrificing our profitability to give our people as many hours as possible while keeping 

their benefits and health insurance intact. In fact, we have not had 

a layoff in our cast iron division since the early 1950s when we 

mechanized the plant, despite several significant recessions since 

that time. 

I also serve as a member of the American Foundry Society, and 

I am pleased to testify on their behalf today. Headquartered in 

Schaumberg, Illinois, AFS is the major trade association for the 

North American metal casting industry, which comprises more 

than 2,000 casting facilities, many of which are in your districts. 

The metal casting industry is critical to the U.S. economy. More 

than 90 percent of all manufactured goods use metal castings as 

engineered components. The U.S. Military depends on metal castings for jet fighters, ships, tanks, trucks, and weapon systems. 

Without castings, we would not be able to draw oil, propel aircraft 

or space vehicles, or economically plant and harvest crops that feed 

the world’s population. 

Metal casting is the sixth largest industry in America, shipping 

products valued at $20 billion and directly employing 200,000 people. Over 80 percent of U.S. metal casters employ 100 workers or 

less and these are green jobs. Foundries recycle millions of tons of 

scrap metal as a raw material each year. Unfortunately, some of 

the most economically threatening regulatory proposals to our industry are coming from EPA. Appropriate regulations that improve 

health, safety, and the environment are a necessary part of doing 

business. However, when the regulatory process can advance 29 

major rules and 173 others with little or no regard to the cost or 


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their implications, the system is broken. I could regale you with 

countless examples but I will bring your attention to one situation 

that has directly cost North Carolina hundreds of jobs. 

A few years ago, Charlotte Pipe bought land in rural North Carolina with the hopes of building a new state-of-the-art foundry. Not 

only would the new facility allow us to operate more efficiently, it 

would remove a large stationary source of emissions from downtown Charlotte. After we drew up plans for the new facility, we 

submitted our air permit. A year and a half later the permit sat 

unapproved. Our state regulators eventually told us that while the 

previous air dispersion models only had to account for filterable 

particulate, new air permits now require condensables to be included in the total particulate matter 2.5 models. The state also 

came back to us and said since we would be relocating our plant 

to a poorer area, in the name of environmental justice we would 

have to look at how any additional pollution would impact the local 

community. They never asked us how creating hundreds of new 

construction jobs and ancillary small business jobs would have impacted the local community. 

Finally, the PM 2.5 standards are under review by EPA. Limits 

are currently set at 15 parts per billion. The new levels being considered are between 12 and 14 parts per billion. The naturally occurring levels on the land we bought in North Carolina is 12.8 

parts per billion, higher than the low end of the range that EPA 

is proposing. Knowing the standards which were changed and 

changing in midstream, knowing we would not be able to meet 

these, we pulled our permit and suspended the project, killing all 

those construction jobs. 

Based on our recent experience, I can only conclude that our current government looks at manufacturers not as partners that 

would alleviate unemployment and generate tax revenues but as 

targets to regulate and intimidate to justify the ever-expanding 

reach of the federal bureaucracy. 

Thank you for the opportunity to appear today and I welcome 

your questions. 

[The statement of Mr. Muller follows:] 


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Chairman COFFMAN. Thank you, Mr. Muller. Let me ask a few 

questions of the panel and then I will defer to the ranking member 

and then to the other members present. 

My first question, and it is to all the members of the panel, how 

difficult is it for your businesses to deal with the regulatory uncertainty posed by the EPA. Mr. Johnston, if we can start with you. 

Mr. JOHNSTON. Regulatory certainly would allow us to gain more 

funding through the public sector for projects as we go forward. 

And anytime you introduce regulatory certainty it is the number 

one and has been reviewed by investment firms as the number one 

risk that advanced biofuel corporations face today—is that regulatory uncertainty. It would be very helpful to maintain that 

thorugh the RFS and vehicles like that through the future so that 

things can develop and that we do not have to run into the high 

interest rates and the risk comes down for our investments. 

Chairman COFFMAN. Mr. Ward. 

Mr. WARD. As the coal ash recycling industry, we thought we had 

regulatory certainty at one point. EPA in two previous reports to 

Congress and two previous regulatory determinations, one in 1993 

and a 2000 final regulatory determination, concluded that coal ash 

did not warrant regulation as a hazardous waste. When that happened in 2000 and we got regulatory certainty with a final regulatory determination, the recycling rate for coal ash in this country 

increased from 30 percent in 2000 to 44 percent in 2008. That is 

almost a 50 percent increase in less than a decade by having that 

regulatory uncertainty. Today’s EPA is talking about withdrawing 

their final regulatory determination and all of that benefit is gone. 

So I will answer the question that way. Regulatory certainty 

helped our business enormously but that is now all being taken 

away by reinjecting uncertainty. 

Chairman COFFMAN. Mr. Muller. 

Mr. MULLER. Similar response. Regulatory certainty would allow 

us to determine whether we can build this new plant in North 

Carolina or not. It would be a much more energy efficient plant, 

state-of-the-art, straight-line foundry and it would remove a large 

source of emissions from downtown Charlotte. Not only do we have 

the particulate matter 2.5 issue, the National Ambient Air Quality 

standards are under review, ozone. And certainly, cap-and-trade or 

greenhouse gas regulation from EPA would most likely kill that 

foundry project as well. 

So these regulations that are hanging over our head are holding 

this project up and frankly we are not sure it would ever get permitted in the first place. 

Chairman COFFMAN. Mr. Johnston, in your opinion, what EPA 

regulatory changes could be made to allow for biofuels such as 

isobutanol to have equal access to the market? 

Mr. JOHNSTON. We have spoken to the EPA about this and it is 

a very simple either guidance or an internal policy change that 

they need to make that would allow isobutanol to be mixed in a 

service station underground storage tank with E10. It is a very 

straightforward change that we feel if they move forward on right 

now would really assist us in the future. 

Chairman COFFMAN. Are there any differences environmentally 

in terms of emissions? 


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Mr. JOHNSTON. No. Our emissions, we have had testing done, a 

part of the EPA standards and submitted it to them. And our emissions from a burning of our fuel does not create any greenhouse gas 

issues. 

Chairman COFFMAN. Okay. Mr. Ward, our Subcommittee is especially concerned with the impacts of regulations on small businesses. Can you give me a couple of examples where EPA’s proposed coal ash rule has created unwarranted challenges for small 

businesses or stifled their innovation? 

Mr. WARD. We have numerous examples and I am happy to 

share as many as we like with the Committee. For the purposes 

of a brief answer I will give you a big one and a small one. A big 

one, there are a number of small businesses who are developing innovative processes for improving the quality of coal ash so that it 

can be used in more recycling applications. For instance, in concrete which improves the durability of the concrete, makes our 

roads and bridges last longer. Those technologies are essentially 

dead in the water right now because nobody wants to invest 20 or 

30 million dollars in a technology facility to clean up a source of 

ash that they do not know if they are going to be able to sell it 

after EPA declares it a hazardous waste. So there is an example 

of a larger industry that is already dead. 

Let me give you one that may sound humorous as a small one, 

but coal ash gets recycled in a lot of different areas. I know a producer down in the south who is looking at using coal ash to make 

clay pigeons for a shooting range. When this EPA thing started 

they stopped the project entirely. Now, this is a business that is 

spraying lead all over the field but they were afraid of having coal 

ash in the clay pigeons that were going to get shot as they were 

flying out in the field. 

It runs the gamut. We have literally dozens of examples like this 

going on right now. 

Chairman COFFMAN. Okay. Thank you. 

Mr. Muller, should EPA continue to place stricter environmental 

standards on businesses in the future, do you believe that small 

businesses such as Charlotte Pipe will be able to maintain or increase current staffing levels? 

Mr. MULLER. No, I do not. You know, we have not contributed 

to the unemployment problem but we are also not in a position to 

help solve the unemployment problem by hiring new associates. So 

the continued hanging over our heads of greenhouse in particular, 

even the boiler MACT which we have not discussed, while it does 

not directly affect Charlotte Pipe and Foundry, anything that hurts 

a utility is going to drive up our energy costs. And we are a very 

energy-intensive industry, the foundry industry. So this constant 

uncertainty and constant attack that we feel that manufacturers 

are under in America will not help us solve the employment problem. 

Chairman COFFMAN. Okay. Thank you. At this time I would like 

to defer to Ranking Member Altmire. 

Mr. ALTMIRE. Thank you, Mr. Chairman. Mr. Johnston, in promulgating its greenhouse gas rules, the EPA chose not to convene 

a small business advocacy review panel but it attempted to provide 

relief through the tailoring rule. The EPA instead, if it had held 


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small business advocacy panels, do you believe the rules’ impact on 

small firms could have been mitigated more appropriately or it 

would have made a positive difference? 

Mr. JOHNSTON. I think so. With the tailoring rule, the greenhouse gas, I mean, we are in the midst of permitting a plant in 

southern Minnesota. And part of that permitting process was looking at what the effect of the new regulations were going to cost us 

to comply with. And when the tailoring rule came out and also the 

exemption of biogenic carbon from some of the greenhouse gas, it 

allowed us to look at the plant as an economic alternative. If they 

had kept it where it was and they had gotten that feedback earlier 

in the process it would have much more streamlined the regulation 

and given regulatory certainty to projects like ours. 

Mr. ALTMIRE. Okay. Mr. Muller, do you have a comment on that? 

Mr. MULLER. I am sorry, sir. Can you repeat what the question 

is? 

Mr. ALTMIRE. Let me ask you something similar. 

Mr. MULLER. Okay. 

Mr. ALTMIRE. The EPA’s greenhouse gas tailoring rule exempts 

smaller businesses from most of the requirements of the rule. Does 

this exemption ensure that small businesses like yours will not be 

affected by the rule? 

Mr. MULLER. No, for the same reason that I gave the Chairman, 

that anytime you impact the utilities and the coal industry frankly. 

Coal is a major raw material for us, so anything that impacts the 

coal industry and the utility industry is going to drive our energy 

costs and our raw material costs up. So to claim that they are only 

targeting large sources of emissions does not hold water because 

everyone will be affected by this. Even homeowners’ rates will— 

utility rates will increase. 

Mr. ALTMIRE. Mr. Ward, I wonder if you could discuss the distinction between landfill for coal ash that you mentioned in your 

testimony versus the regulation that we are talking about today. 

Mr. WARD. The regulation we are talking about today is a direct 

outcome of an incident that occurred in December 2008 when a 

large disposal pond in Tennessee failed, operated by the Tennessee 

Valley Authority. And EPA said we are going to regulate coal ash 

disposal now. Over the debate, however, the debate has shifted 

from regulating coal ash disposal methods to demonizing coal ash 

itself. If we had spilled a billion gallons of skim milk in the Clinch 

River, we would have had an environmental disaster but we would 

have been talking about improving standards for milk containment 

facilities, not about the milk. 

But now we have this parade of things about coal ash. What EPA 

is saying, this is supposed to be a coal ash disposal rulemaking in 

which they are improving standards for coal ash landfills and 

ponds where coal ash is disposed. We agreed with that. Those 

standards should be improved. But the way they are going about 

it by designating it a hazardous waste so that they can get more 

enforcement authority, they are creating a stigma that is seriously 

damaging a recycling market. 

And I saw your eyebrows all go up when I said, you know, they 

think that a hazardous waste designation will make people want 

to recycle more. I ask you. Would you want a material in your 


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home, your school, or your business that is called a hazardous 

waste on the property of the person who made it but is not when 

you put it in your home? That is the problem. EPA will tell you 

they are not trying to regulate us, that the beneficial use industry 

is exempt, but the way they are trying to regulate disposal is killing us. 

Mr. ALTMIRE. So you do not have a problem with the landfill regulations as they currently stand or the appropriateness of having 

those regulations. 

Mr. WARD. No. 

Mr. ALTMIRE. It is that designation. 

Mr. WARD. The coal ash recycling industry, and by the way, the 

utility industry as well, is on record supporting new and better 

landfill and coal ash disposal regulations. Absolutely that is an appropriate thing. We should never, ever have another incident like 

the thing that happened at the TVA facility in 2008. That has to 

be done away with. But we can do it without creating an unjustified and unwarranted stigma on coal ash that is threatening to 

undo one of the largest and greatest recycling success stories in our 

nation’s history. 

Mr. ALTMIRE. Great. Thank you. One more, Mr. Chairman, for 

Mr. Muller. 

In your testimony, you discuss new greenhouse gas permitting 

requirements would cause bureaucratic gridlock creating another 

hurdle a company seeking to expand or rebuild would have to face. 

How do you see such administrative delays affecting investment in 

new facilities? 

Mr. MULLER. Well, that is a great question. We, part of the decision we have to make if we were able to build our new foundry is 

whether to have a cupola melt or an electric melt. And the implications of either are dependent on what the greenhouse regulations 

are. Electric melt would be much more efficient way to operate the 

foundry but with electricity rates necessarily skyrocketing under 

such a regime then we would probably have to revoke—continue to 

do copula melt which would use coke and is far less efficient. So 

these are the types of decisions that hang in the balance when we 

are waiting for the final rules. 

Mr. ALTMIRE. What about the decision to locate a plant operation 

overseas rather than domestic? 

Mr. MULLER. Well, we are committed to manufacturing in the 

United States. Our management is fourth generation and they 

would not relocate overseas but some of our competitors have and 

a lot of our competitors have gone out of business. So it is absolutely understandable that a foundry could be built over in China 

and they can buy scrap metal here, ship it to China, melt it, ship 

it back here, and still sell at 25 percent below our market. So it 

is a very attractive alternative. 

Mr. ALTMIRE. Thank you, Mr. Chairman. 

Chairman COFFMAN. Thank you, Mr. Altmire. 

Mr. West. 

Mr. WEST. Thank you, Mr. Chairman. 

We have kind of run into some difficulties down in Florida with 

the EPA and this thing called the numeric nutrient criteria which 

is really affecting our farmers and also some of our local municiVerDate Mar 15 2010 01:54 Jun 15, 2011 Jkt 066749 PO 00000 Frm 00045 Fmt 6633 Sfmt 6602 E:\HR\OC\A749.XXX A749

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palities as far as stormwater runoff. And one of the things that 

they have been asking is, you know, how do you determine the formulas for this numeric nutrient criteria regulation that they are 

coming down with. 

So when I was listening to you speak, Mr. Johnston, you know, 

obviously, you know, from being down south I cannot articulate all 

those highly technical things, but are there certain formulas that, 

you know, that you are developing with this conversion of the fuels 

or what have you that the EPA is not consulting with you on or, 

you know, are they coming down and showing you some type of calculation that they are using to bring this regulatory environment 

on you? 

Mr. JOHNSTON. Mr. Congressman, interesting question. We 

have—there is obviously through the regulatory schemes there are 

many different formulas that work into our decision-making regarding regulatory compliance as well as listing our products. And 

a lot of them are based on historical data that in today’s regime 

does not always necessarily apply. And what we would do with 

EPA is look at, for example, the isobutanol in the underground 

storage tank. When these regulations were made there really was 

only one biofuel. And calculations for our biofuel is really straightforward. It is really a simple calculation and EPA being able to 

take that and say, okay, there is more biofuels, there is more 

progress in the United States. I mean, small businesses are creating newer and newer materials. Being able to do that and move 

that forward would really help provide the American jobs and pull 

out foreign oil that is needed so desperately. 

Mr. WEST. Next question then, and this can be across the board, 

you know, obviously, in a regulatory environment that is on 

steroids there are increased costs to your businesses. So, you know, 

how do you contend with these, you know, rising costs? And we 

have not even talked about some of the other things like health 

care. 

Mr. JOHNSTON. I will take the first shot at that, Mr. Congressman. When we put together our budgets, we put together a pretty 

big amount of money for the regulatory compliance. And that 

money could be used elsewhere in the business to provide more development, more jobs, where we are using that to simply file paperwork and comply. And it gets to be a pretty big percentage of any 

new project where you have to meet all these government regulations and be able to file all the paperwork required. Anything to 

streamline that and provide regulatory certainty would provide 

benefit to the overall company and reduce our costs. 

Mr. WARD. For a number of the companies in the coal ash recycling business, they are looking at not how to budget for the costs 

but whether they are going to stay in business. If coal ash is declared a hazardous waste when it is disposed and that stigma 

causes people not to want to use it for recycling applications, most 

of the businesses in our area, the folks who actually market coal 

ash and technologies for improving it, they are just going out of 

business. 

The users, the small businesses that rely on this material as a 

strategic building material—and they do—in many cases coal ash 

actually improves the quality of the products it is used in—they 


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will just choose not to use it and they will go to other materials 

that have higher embodied energies and lower performance but 

they will just switch to other materials in order to avoid the potential liability risks instead of using this material. 

Mr. MULLER. Congressman West, we spend millions of dollars 

every year on environmental compliance. We have full-time environmental engineers on staff. We employ environmental consultants to ensure our compliance and environmental lawyers. 

This is a good example of how this costs us money. We received 

a notice of violation a couple of years ago and it was a paperwork 

violation. We had not violated any EPA rules but our paperwork 

was not exactly correct. So that cost a fine. And then our lawyers 

and engineers have to work on that. And then the next time we 

submitted our paperwork we failed to note the NOV that they gave 

us and we got another notice of violation for failing to note the notice of violation that they had already given us. It is just silly and 

it is all paperwork. We were operating well within our permits. So 

it just costs money chasing our tails. 

Mr. WEST. If I could ask one last question, Mr. Chairman. 

So if there was one golden nugget recommendation that you 

could give to us to press forward on, what would that golden nugget recommendation be from each one of you? 

Mr. JOHNSTON. From Gevo’s standpoint, it is to be able to provide regulatory certainty in this complex world we live in and also 

to be able to talk to EPA and say these are easy solutions that we 

are providing as a company. These are not. We want to change the 

Clean Air Act. We do not have to change the 40 CFR. These are 

simple interior pieces in EPA that can be done that will assist a 

small business to be able to commercialize their product. 

Mr. WARD. I would agree with Mr. Johnston’s plea for regulatory 

certainty and add to that that as a small business committee it 

would be wonderful if EPA could be encouraged to follow their already existing guidance for evaluating impacts on small businesses. 

And not just direct impacts to the regulations but the indirect impacts on small businesses. If we could just get EPA to use their 

small business advisory review panel authority and follow the executive orders that they have already been given to properly assess 

the impacts on small businesses, I think we would see a tremendous change. But they spend most of their time telling us why they 

do not have to look at our issues. 

Mr. MULLER. I would say the rules in place, the standards on air 

quality on ozone, on particulate, are already extremely stringent 

and protect the air and water. Constantly lowering these standards 

to points where they cannot even be met economically and for very 

little health benefit in return, that would be the golden nugget. We 

just need to keep things where they are and people can operate and 

they can hire again and we will be well in compliance of our permits. 

Mr. WEST. Thank you very much, gentlemen. I yield back. 

Chairman COFFMAN. Mr. Altmire, any further questions? 

Mr. ALTMIRE. No. 

Chairman COFFMAN. Mr. West, any further questions? 

Mr. WEST. No, sir. 


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Chairman COFFMAN. I would like to thank all of our witnesses 

once again for testifying before our Subcommittee. You have given 

our members a better perspective of how EPA’s rigorous regulatory 

agenda is endangering your businesses. It is alarming to me that 

this government agency continues to propose increasingly stringent 

regulations when small businesses are already paying environmental costs per employee at a rate that is 364 percent higher than 

large businesses, adding insult to injury. Make no mistake, when 

EPA and other agencies effectively over-regulate small business, 

they also prevent job creation at a time when our country needs it 

most. Today’s hearing marks the first step in a long journey of congressional oversight in matters affecting small businesses. This 

Subcommittee, along with the full Committee, will remain dedicated and vigilant in exposing these and other governmental hurdles to American prosperity. 

I ask unanimous consent that members have five legislative days 

to submit statements and supporting materials for the record. Any 

objection to that? Without objection, so ordered. 

This hearing is now adjourned. 


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