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26–716 PDF 2006

METHYL BROMIDE: ARE U.S. INTERESTS BEING

SERVED BY THE CRITICAL USE EXEMPTION

PROCESS?

HEARING

BEFORE THE

SUBCOMMITTEE ON ENERGY AND RESOURCES

OF THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

FEBRUARY 15, 2006

Serial No. 109–129

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

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 SCHMIDT, 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)

DAVID MARIN, Staff Director

ROB BORDEN, Parliamentarian

TERESA AUSTIN, Chief Clerk

PHIL BARNETT, Minority Chief of Staff/Chief Counsel

SUBCOMMITTEE ON ENERGY AND RESOURCES

DARRELL E. ISSA, California, Chairman

LYNN A. WESTMORELAND, Georgia

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

PATRICK T. MCHENRY, NORTH CAROLINA

KENNY MARCHANT, Texas

DIANE E. WATSON, California

BRIAN HIGGINS, New York

TOM LANTOS, California

DENNIS J. KUCINICH, Ohio

EX OFFICIO

TOM DAVIS, Virginia HENRY A. WAXMAN, California

LAWRENCE J. BRADY, Staff Director

DAVE SOLAN, Professional Staff Member

LORI GAVAGHAN, Legislative Clerk

RICHARD BUTCHER, Minority Professional Staff Member

(III)

C O N T E N T S

Page

Hearing held on February 15, 2006 ....................................................................... 1

Statement of:

Wehrum, William L., Acting Assistant Administrator for Air and Radiation, U.S. Environmental Protection Agency; Michelle M. Castellano,

attorney and vice president, Mellano & Co., San Luis Rey, CA; James

A. Bair, vice president, North American Millers’ Association; and David

Doniger, senior attorney, Natural Resources Defense Council ................. 15

Bair, James A. ........................................................................................... 35

Castellano, Michelle M. ............................................................................ 24

Doniger, David ........................................................................................... 46

Wehrum, William L. .................................................................................. 15

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

Bair, James A., vice president, North American Millers’ Association, prepared statement of ........................................................................................ 37

Castellano, Michelle M., attorney and vice president, Mellano & Co.,

San Luis Rey, CA, prepared statement of .................................................. 26

Doniger, David, senior attorney, Natural Resources Defense Council, prepared statement of ........................................................................................ 48

Issa, Hon. Darrell E., a Representative in Congress from the State of

California:

Briefing memo ........................................................................................... 5

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

Kucinich, Hon. Dennis J., a Representative in Congress from the State

of Ohio, prepared statement of .................................................................... 74

Wehrum, William L., Acting Assistant Administrator for Air and Radiation, U.S. Environmental Protection Agency, prepared statement of ..... 18

(1)

METHYL BROMIDE: ARE U.S. INTERESTS

BEING SERVED BY THE CRITICAL USE EXEMPTION PROCESS?

WEDNESDAY, FEBRUARY 15, 2006

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON ENERGY AND RESOURCES,

COMMITTEE ON GOVERNMENT REFORM,

Washington, DC.

The subcommittee met, pursuant to notice, at 2:06 p.m., in room

2203, Rayburn House Office Building, Hon. Darrell E. Issa (chairman of the subcommittee) presiding.

Present: Representatives Issa, Watson, and Kucinich.

Staff present: Larry Brady, staff director; Lori Gavaghan, legislative clerk; Tom Alexander, counsel; Dave Solan, Ph.D., and Ray

Robbins, professional staff members; Alexandra Teitz, minority

counsel; Richard Butcher, minority professional staff member; and

Cecelia Morton, minority office manager.

Mr. ISSA. Ladies and gentlemen, I want to thank you all for

being here. Please all take seats.

Yes, if the private sector witnesses would also take their place

at the table, I would appreciate it.

In the future we may want to schedule these differently, but we

had noticed this as a single panel, and with your indulgence, we

will go forward that way. I guess officially I will bring this hearing

to order.

And to my amazement, a quorum being present, this subcommittee hearing on will come to order.

The subcommittee is conducting this hearing today to highlight

the shortcomings or successes of the Montreal Protocol’s Critical

Use Exemption process with respect to methyl bromide.

This is an issue of paramount importance to my constituents and

my ranking member’s constituents in southern California, as well

as the growers and manufacturers throughout the country.

First let me say that I fully support the Montreal Protocol in its

effort to eliminate the use and production of ozone-depleting substances. We have been very successful in this effort. Through the

cooperation of the Government and private sector in the United

States, we have eliminated the use and production of more than 90

percent of the substances on the Protocol’s list. We are working

hard to eliminate the last 10 percent, which includes methyl bromide.

In 2007, the United States, it is estimated, will use only 26.25

percent of what it used in 1991. We are continuing our effort to

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find substitutes for methyl bromide. To date, the U.S. Government

alone has spent more than $200 million in this pursuit, and we understand that the private sector in response has spent at least the

same. But a substitute alternative on a universal basis has not

been found to date. This is why we have to continue with a critical

use exemption for certain categories for which there is no alternative, as afforded under the Montreal Protocol.

However, I am concerned that when put into practice, the critical

use exemption process does not work well. The process is lengthy,

unpredictable, expensive, and anything but transparent—and I

want to emphasize, anything but transparent. Some of our competitors not covered, such as China, India, and Mexico, will not be subject to the Protocol until 2015. Every year we apply, we are authorized considerably less than what our farmers require.

We must ask ourselves: Are U.S. interests adequately served

under the critical use exemption process as it currently functions?

Should we be subject to international procedures that lack transparency and predictability? Is there anything Congress can do to

spur transparency and predictability? Can the process be simplified? Why can’t we have a multi-year approach? These are just

some of the questions for today.

I hope that the testimony delivered today—and I have read the

testimony in advance—will shed some light on the critical use issue

and suggestions for improvements, and particularly in the question-and-answer period. I hope that this panel will suggest improvements that you believe would help in this process.

[The prepared statement of Hon. Darrell E. Issa follows:]

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Mr. ISSA. We have a very distinguished public and private panel

today. First of all, we have Mr. William Wehrum, Acting Assistant

Administrator for Air and Radiation, U.S. Environmental Protection Agency, and thank you for being here.

We have Ms. Michelle Castellano, vice president, Mellano & Co.

from San Luis Rey, CA, and I do have to once again thank you as

a constituent and as a major employer in my district. Your family

has been very generous in working on this issue both here and

overseas.

Mr. James Bair, vice president of North American Millers’ Association, again, a returnee of many contributions to the committee.

Finally, Mr. David Doniger, senior attorney, the Natural Resources Defense Council. I have been particularly interested in

your submittals. They are extensive, and I look forward to our

question-and-answer period. I also understand that you will have

some documents to submit, and that will be allowed under unanimous consent.

I look forward to hearing testimony from this panel. I ask unanimous consent that the briefing memo prepared by the subcommittee staff be inserted into the record, as well as other relevant materials, including any materials which you recognize and elect to

have during your testimony.

[The information referred to follows:]

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Mr. ISSA. I now yield to the ranking gentlewoman from California for her opening statement.

Ms. WATSON. I sincerely want to thank our chairman for this

hearing.

On April 5, 1988, President Ronald Reagan signed the Montreal

Protocol on substances that deplete the ozone layer. On October 26,

1990, the House of Representatives voted 401–25 to pass the Clean

Air Act and implement the Montreal Protocol. On November 15,

1990, President George Bush, Sr., signed into law the implementing legislation for the Montreal Protocol. Most importantly, the

Protocol has enjoyed the bipartisan backing of four consecutive

Presidents.

According to the National Resources Defense Council, methyl

bromide is the most dangerous ozone-destroying chemical still in

widespread use. The NRDC further states that methyl bromide has

also been linked to the increased rates of prostate cancer in pesticide applicators and other agricultural workers, not to mention

skin cancer and cataract cases that are directly linked to a weak

ozone layer.

For 16 years, the Montreal Protocol has been working to phaseout ozone-depleting chemicals and to protect and restore the ozone

layer. The United States demonstrated that we were able to work

together with the international community to answer an environmental problem that threatened the entire planet. According to the

Protocol, the use of methyl bromide was supposed to be reduced to

zero by the year 2005. For the past 3 years, the United States and

a few other countries have requested exemptions from the Protocol

for so-called critical uses.

The subject of this methyl bromide hearing is: Are U.S. interests

being served by the critical use exemption process? Unfortunately,

we as Americans tend to look at some issues through a very narrow

window. If we want to be critical of an agreement with the world,

especially what is considered to be the most effective and beneficial

environmental world treaty thus far, one must examine all sides of

the issue.

Representative Radanovich has introduced legislation in the

108th and 109th Congress that had authorized methyl bromide use

regardless of the Montreal Protocol. The bill is a threatening measure to be utilized if all of the U.S. critical use exemptions are not

issued by the Montreal Protocol parties. Congress can move legislation to grant exemptions presumably even if it takes the United

States out of compliance within the Montreal Protocol.

My concern: What is the science, legal, and international ramifications behind such an initiative? Many believe that the Montreal

Protocol has the flexibility necessary to address appropriate needs

for methyl bromide until alternatives are identified. We have every

reason to believe that the exemption process works. After all, the

United States was a leader in developing and drafting every detail

of the Protocol.

Mr. Chairman, to question the critical use exemption methodology of the Montreal Protocol is a commendable oversight practice,

but my constituents want to know if there is a reason that is

backed by scientific, empirical evidence behind that thought. Several agricultural interests, including some in my own home State

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of California, have initially bought into the ‘‘whatever the United

States wants’’ with methyl bromide initiatives. It is our duty to

question if American economic interests are balanced with the interests of the United States and the world human health, the

United States and world environmental health, and, last but not

least, the health of U.S. foreign policy. As a former Ambassador,

I fully understand the importance of being American while embracing the world we live in.

Mr. Chairman, I want to commend you again on this hearing.

American citizens need answers. It is critical that we find a solution to the methyl bromide dispute and develop any environmentally sound alternatives that we can. It is imperative for our

economy and for the independence of our great Nation, and I hope

this hearing will demonstrate how unwise it would be for the

House of Representatives to walk down a path that violates international law, threatens the repair and the healing of the ozone

layer, and adds risk to the health of many Americans.

I look forward to this informational session with the U.S. Environmental Protection Agency, the National Resources Defense

Council, the North American Millers’ Association, as well as representatives from industry. Mr. Chairman, I yield back the remainder of my time. Thank you.

Mr. ISSA. Thank you. Mr. Kucinich, I really appreciate your interest in this and yield you such time as you may need.

Mr. KUCINICH. Thank you, Mr. Chairman. I want to thank you

for calling this hearing. I have a delegation from the Ohio National

Guard coming to my office shortly, and I would appreciate your indulgence if I could read a statement and then return to my office

for the meeting. So thank you, and it is a pleasure to serve with

you on this committee, and thanks to the gentlelady, the ranking

member.

I was dismayed when I learned that today we would be discussing efforts to perpetuate and possibly increase the use of methyl

bromide. Continuing to allow it to be manufactured and used is bad

for the environment, bad for human health, bad for international

relations, bad economics, and is simply unnecessary.

Methyl bromide has been responsible for a significant amount of

the degradation of our protective ozone layer. In 2005, the size of

the resulting hole in that layer over the Antarctic reached 9.4 million square miles, an area almost as big as the combined areas of

the United States and Canada, according to the NASA. Current estimates say that it will take another 50 years for the hole to repair

itself.

Too much ultraviolet B, which is filtered by the ozone layer,

causes cataracts and suppresses immune systems, making us more

vulnerable to viruses and bacteria, and contributes to skin cancer.

It is this threat to human health that is the major reason why the

international community agreed to ban methyl bromide. It was a

display of unprecedented cooperation in the face of an environmental threat.

Methyl bromide puts their own workers and consumers at risk,

too. It is no wonder that it causes chronic health problems for the

workers who apply it and the nearby communities who are exposed

to it. Exposure has effects on the neurological system, including

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functional impairment, lethargy, twitching, tremors, and paralysis

in extreme cases. It has also been linked to prostate cancer and

birth defects in some studies.

Continuing to manufacture methyl bromide is bad economics.

Since the international community agreed to phaseout methyl bromide, companies who play by the rules have been planning for its

phaseout. They have incurred real financial costs by investing in

alternatives, anticipating the phaseout required by the Montreal

Protocol. Failing to adhere to the U.S. promise to phaseout methyl

bromide puts these companies who are playing by the rules at an

unfair competitive disadvantage. Those who do the right thing and

obey the law should be rewarded for their good-faith efforts, not

punished.

Consider the international implications as well. An attempt to let

the United States allow methyl bromide to be used without going

through the specified channels like other countries are required to

do would further harm our standing in the international community. It also sends a signal to other countries that we will only

honor our agreements until we change our mind. It harms negotiations on future agreements.

The EPA is currently trying to address the methyl bromide issue

by substituting chemicals, like methyl iodide, that aren’t as harmful to the ozone layer but are still highly toxic. Instead, we need

to look at alternatives for pest control that not only preserve the

ozone layer, but also protect workers’ health, community health,

consumer health, and ecological health. In fact, that is exactly what

Americans want.

One of the biggest growth industries right now, for example, is

organic food. According to the Congressional Research Service,

‘‘The annual rate of market growth since 1990 has remained steady

at about 20 percent.’’ When given a choice between food grown with

toxic chemicals or food grown organically, people choose the latter,

especially when the price is comparable, which is increasingly the

case as the economies of scale are becoming more prevalent.

One of methyl bromide’s biggest uses is for strawberry crops.

Jake Lewin, Director of Marketing for the California Certified Organic Farmers, says, ‘‘Strawberries can be grown without pesticide.

We have 60 growers who don’t use methyl bromide. The bottom

line is small, and large growers have successfully produced strawberries without pesticides.’’ And that, by the way, is from the Santa

Cruz Sentinel. I have the citation for the record.

So we are talking about yielding to the management of chemical

producers and agribusiness, who, by the way, rarely have to apply

the toxic pesticide themselves or live in adjacent communities, at

a drastic cost to our health and that of the Earth. It speaks to the

systematic deference to corporations at the expense of the biological

systems on which we intimately depend for life. So I say this policy

is unwise and unnecessary, and I call for the immediate and permanent phaseout of methyl bromide.

Mr. Chairman, I want to thank you for giving me the opportunity

to read this statement.

Mr. ISSA. I want to thank you for your participation, and anything you want to place in the record, for the next 2 weeks it will

be left open.

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Mr. KUCINICH. Thank you, Mr. Chairman.

Mr. ISSA. And give my best to, as a former Ohioan, our National

Guard.

Mr. KUCINICH. I will do that, and I will let them know that you

were kind enough to indulge my reading this statement.

Mr. ISSA. Not a problem, Dennis.

Before I hear your testimony, it is the rule of this committee that

all people participating in the hearing, whether as witnesses or in

support staff that may either advise or testify, be sworn in. So I

would ask not only our witnesses but any supportive staff to please

stand for the oath.

[Witnesses sworn.]

Mr. ISSA. Let the record show everyone answered in the affirmative. Please be seated.

Before we hear your testimony, I would like to say two things.

First of all, absolutely everything in your written statement will be

in the record. We will also allow for additional material and additional response to material that is submitted. We want this record

to be as full and complete as possible. I will hold open the record—

and I will say it again at the end—for at least 2 weeks, but if necessary, longer. This is an extremely important subject. We are absolutely dedicated to the elimination of methyl bromide. This hearing is about how to do it and how to make the system work properly. We are open to hearing about alternatives and the progress

on alternatives. So although the scope is relatively narrow because

there is only so much time, we are going to allow for an expansion

of the record so that we can be as complete as possible. That is

with unanimous consent by my ranking member.

So feel free in your 5 or so minutes to go off of your prepared

statement knowing it is going to be in. Additionally, it is a single

panel, so we do not plan on cutting anyone short. If other Members

come in, they will be able to ask plenty of questions. Again, this

is very important on a bipartisan basis that it be a very complete

record.

So, Mr. Wehrum, you are first. Thank you.

STATEMENTS OF WILLIAM L. WEHRUM, ACTING ASSISTANT

ADMINISTRATOR FOR AIR AND RADIATION, U.S. ENVIRONMENTAL PROTECTION AGENCY; MICHELLE M. CASTELLANO,

ATTORNEY AND VICE PRESIDENT, MELLANO & CO., SAN

LUIS REY, CA; JAMES A. BAIR, VICE PRESIDENT, NORTH

AMERICAN MILLERS’ ASSOCIATION; AND DAVID DONIGER,

SENIOR ATTORNEY, NATURAL RESOURCES DEFENSE COUNCIL

STATEMENT OF WILLIAM L. WEHRUM

Mr. WEHRUM. Thank you, Mr. Chairman, Congresswoman Watson. I appreciate the opportunity to be here to testify. It is a privilege. I am here on behalf of three Federal agencies—the Department of State, the Department of Agriculture, and the Environmental Protection Agency—to discuss the methyl bromide critical

use exemption process under the Clean Air Act and Montreal Protocol.

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I recognize this issue is of great importance to you and many of

your constituents.

Since the Montreal Protocol’s inception in 1987, the United

States has exerted strong global leadership in the transition away

from ozone-depleting substances and toward the development of

new technologies that are safe for the ozone layer. We continue to

meet all of our obligations under the Montreal Protocol and have

successfully phased out most ozone-depleting substances controlled

by the Protocol.

Because of the U.S. Government’s commitment and our innovative domestic industries, the world is well on its way to seeing the

recovery of the stratospheric ozone layer. We estimate that full implementation of the Montreal Protocol will save 6.3 million U.S.

lives that would otherwise have been lost to skin cancer between

1990 and 2165.

Pursuant to the Montreal Protocol and Title VI of the Clean Air

Act, methyl bromide, like other ozone-depleting substances, has

been subject to a gradual step-by-step phaseout with certain allowable exceptions. Today’s discussion will focus on the critical use exemption, or CUE process, which allows parties to identify crops and

uses for which there are no technically and economically feasible

alternatives. The CUE process essentially allows on a yearly basis

the production and import of new methyl bromide for such uses

after the Montreal Protocol’s phaseout date of January 1, 2005.

The CUE process begins when EPA solicits applications for methyl bromide users for their critical use nomination, or CUN. I am

from EPA, so we are into acronyms. EPA conducts a technical review of the applications, and the U.S. Government then submits a

CUN to the parties of the Protocol approximately 2 years before the

control period in which the CUE will be produced.

A technical committee called the Methyl Bromide Technical Options Committee [MBTOC], reviews this U.S. CUN and provides

recommendations to the Protocol parties. Parties then act to authorize the CUEs. Finally, EPA allocates the CUEs through a notice and comment rulemaking process.

Since the CUE process has been implemented under the Protocol

and the Clean Air Act, the United States has consistently received

over 90 percent of the amount we nominated for consideration by

the parties to the Protocol. I believe this is a tribute to the strength

of the data and technical information that the United States has

assembled for its nominations. To date, EPA has completed action

on rulemakings to provide CUEs in 2005 and 2006. The agency is

now preparing a proposal to implement decisions regarding methyl

bromide taken at the last meeting of the parties in Dakar, Senegal,

in December 2005. This rulemaking will address CUEs for the year

2007. The United States also recently submitted its CUN to parties

for methyl bromide production in 2008.

Although there continues to be room for improvement, we believe

that both the international and domestic processes for developing

and allocating critical use exemptions are working well and that

the CUE process yields an annual amount of methyl bromide to

meet the critical needs of U.S. farmers while continuing to show

steady gains in protection of human health.

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While there is no silver bullet, that is, no currently approved alternative to methyl bromide that can substitute for methyl bromide

in all uses, some alternatives have been developed, and more are

under review. My written testimony contains a list of substances

that have been approved and are making inroads in the marketplace in combination with or instead of methyl bromide, thereby reducing overall methyl bromide use. Altogether, the United States

has taken the lead in finding alternatives to methyl bromide, and

EPA continues to give highest priority to the registration of alternatives to this chemical, including iodomethane, a highly promising

potential replacement for important soil uses of methyl bromide.

Mr. Chairman, we don’t claim that the process for determining

CUEs for methyl bromide is perfect or that everything has run

completely smoothly, but we have worked with other Protocol countries to make improvements. For example, in 2004, we collaborated

with the other parties to revise the guidelines used by the MBTOC

to provide a more transparent and well-defined process for the

MBTOC to review nominations. The success of this effort is illustrated by the fact that for the first time, MBTOC’s critical use recommendation for the United States had no material in the ‘‘unable

to assess’’ category. This timely approval will allow the U.S. regulatory process to move forward.

Mr. Chairman, the U.S. positions in recent meetings of the parties have demonstrated the administration’s strong commitment—

strong continued support for the Montreal Protocol, as well as our

commitment to the phaseout of methyl bromide as technically and

economically feasible alternatives become available for U.S. growers and other users of methyl bromide.

Altogether, we believe it is vital to work with Congress and the

community affected by the methyl bromide phaseout to ensure that

our implementation of the Protocol and the CUE process continues

to be successful.

I would be pleased to answer any questions you may have, and

again, thank you for the opportunity to be here. It is a privilege.

[The prepared statement of Mr. Wehrum follows:]

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Mr. ISSA. Thank you, Mr. Wehrum.

We will now hear from Ms. Castellano.

STATEMENT OF MICHELLE M. CASTELLANO

Ms. CASTELLANO. Thank you, Congressman Issa.

As you stated, my family grows cut flowers in the San Diego area

of California. I am a third-generation flower grower. We farm approximately 400 acres in that area.

The question of whether the CUE process is working is of great

importance to us and all of the agricultural sector. I am here today

on behalf of the entire ornamental cut flower industry, and from

our point of view, we would have to say that it is not working. We

support the Montreal Protocol and we support being part of it, but

we do not feel that we are being treated fairly in that process.

We are very clear on the terms of the Protocol and are in compliance, yet we continue to receive arbitrary cuts from our applications for our needed methyl bromide. At the first level, we are concerned when EPA reviews our applications. We feel that they review our applications without a complete understanding of the agricultural industry and the varying practices of agriculture, different sectors and within our different communities. Despite their

relentless attempts to understand agricultural practices, pesticide

use, varying practices from different regions, we find that agriculture does not fit into EPA’s BUNI charts that they use across

the sector, and especially cut flowers tends to be more complex

than other agricultural practices. We will continue working with

EPA in getting a better understanding, but in the meantime, we

feel that the cuts that take place in those BUNI charts is an arbitrary cut and not scientifically justified.

We are further concerned that when EPA proposes this reduced

application to the international community, MBTOC arbitrarily reduces our amount as well without scientific justification. My written testimony includes an excellent letter from Claudia McMurray

noting the U.S. concerns with MBTOC’s arbitrary reduction with

no scientific reasoning. And it also includes one of MBTOC’s reports making assumptions that if alternatives work in one region,

they are going to make the assumption that it is going to work in

another region and make cuts up to 20 percent. There is no scientific justification for this, and according to the Protocol, that is

outside of MBTOC’s area. There needs to be scientific justification

for cutting our application.

In addition to the arbitrary cuts, we are also concerned that

more and more of our allocations are being derived out of stocks—

stocks being methyl bromide that was manufactured prior to the

2005 cutoff. Stock supplies that may or may not exist are not part

of the Montreal Protocol and are not controlled by the Montreal

Protocol and, therefore, should not be part of the allocation. Not

only is it not part of the allocation and should not be discussed, it

is also taking up much of the U.S.’ time at the international meeting. Instead of focusing on the terms of the Protocol, they are

spending way too much time negotiating these stock numbers that

we do not feel are appropriate.

Most recently, applicants, such as us, are also required to provide

a National Management Strategy, and as part of this strategy, we

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are supposed to suggest how our critical use exemption amounts

will be phased down. That is also not part of the Protocol. The

phaseout was for 2005 if critical use exemptions are needed; that

is, if no technical or feasible alternative exists based on research,

we are allowed to apply for this critical use exemption. Let me reiterate, that is part of the Protocol. The United States did sign onto

the Protocol, and this was part of it. We are still at that point. We

would be happy to use alternatives if they were out there, but they

are not.

If our applications are scientifically justified, which we feel they

are—our research that takes place in the United States in the agricultural industry is the most complex research taking place and the

most sophisticated research. Therefore, we feel that our applications are completely within the Protocol, and the cuts that are taking place are not justified.

I thank you again, and I am happy to answer any questions.

[The prepared statement of Ms. Castellano follows:]

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Mr. ISSA. Thank you.

Mr. Bair.

STATEMENT OF JAMES A. BAIR

Mr. BAIR. Thank you, Mr. Chairman and members of the subcommittee. I am Jim Bair, vice president of the North American

Millers’ Association, and I am also here as vice chairman of the

Crop Protection Coalition. NAMA has 48 member companies that

operate 170 grain mills in 38 States and have a collective daily production of more than 160 million pounds, and the chairman and

ranking member may find it interesting that California is leading

in that category. In fact, Los Angeles is the milling capital of the

United States. There are six mills in Los Angeles that produce 8

million pounds of flour every day.

Mills use methyl bromide for just one reason, and that is to keep

insects out of food. We think that clean and wholesome food is

something that consumers have come to expect. We know that the

Food and Drug Administration demands it, and most people will

remember seeing their mother or perhaps their grandmother baking and sifting flour, and the reason you sifted flour was to get the

bugs out of the flour. And there is a reason that you can hardly

find a flour sifter anymore. It is because there are not bugs in the

flour. Methyl bromide is one of the tools that we use to make sure

that continues to be the case.

We are getting better every day about minimizing our use of pesticides, and even in advance of the Montreal Protocol cuts, we had

already voluntarily cut our methyl bromide usage by about 60 percent.

What is all the fuss about? This controversy about methyl bromide, we are spending tremendous resources on it. In my opinion,

the controversy is not about a problem of significant environmental

consequence. If you go to the U.S. EPA Web site, you can find a

lot of data. For example, this says that the amount approved for

2006 is about 0.3 percent of the ozone-depleting potential from all

sources when the Montreal Protocol was first negotiated. So we are

talking about a tiny slice of the ozone-depleting potential that remains. And like most things, those tiny incremental gains to be

made are going to be the most difficult and extraordinarily expensive to achieve.

Montreal Protocol meetings, as Ms. Castellano referenced, these

meetings do not represent the open policymaking that you would

recognize from the U.S. Congress, for example. The 2003 meeting

was in Nairobi, which is a city so dangerous that the U.S. Embassy

had evacuated its Embassy—excuse me, the State Department had

evacuated its Embassy. The 2004 negotiations took place on

Thanksgiving Day. The 2005 negotiations were in Dakar, Senegal,

which is not exactly an easy place to get to. And the 2006 working

group meetings will be on our 4th of July Independence Day. So

we think that if the United States has to defend the largest critical

use exemption program, it is not unreasonable to think that it

could be done at a date and a location that would be convenient

for the CUE holders to be able to get there and defend and answer

questions. And, frankly, we ought to be able to do that since the

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U.S. funds 25 percent of all the Montreal Protocol activities each

year.

Those meetings, when we get there, I know Ms. Castellano and

I have both been kicked out of meetings there. The substantive negotiations take place behind closed doors. And I think American agriculture is justifiably skeptical about receiving fair treatment

through such a process.

Let me briefly hit how the CUE process works. As has been said,

we submit our application every summer. That goes to the U.S.

EPA. They analyze it. They make a cut—so far they have already

made a cut. They roll all those CUEs into one package, which goes

to the United Nations Environmental Program parties. They make

another cut. Then it goes back to the U.S. EPA, and before they

make their allocation, they can make another cut, as they did just

in January of this year where they cut us by another 15 percent.

It is important to note, I think, that in each of those cuts, we have

no right of appeal.

We object to the way rules are changed in the middle of the

game. Congress ratified the Montreal Protocol treaty with an understanding about what the details of that agreement were, and yet

every year the treaty—there are agreements made that we think

change the original intent of the treaty.

Mr. Chairman, you asked for recommendations in testimony

about how we could improve the CUE process, and I will be happy

to do that briefly for you.

We think that when cuts are made, we should have the right of

appeal, and that they should not be made without some basis in

scientific fact.

We think that the U.S. EPA should be required to publish any

changes in the rules or the allocations by December of the preceding year. For example, this year they did not publish the 2006 allocation until almost February 1st. I am aware of growers and food

processors who had the need to fumigate in January and did not

because they were not sure if it would be legal to do so.

So I would be happy to—I see my time has expired. I would be

happy to go through more recommendations in the question-andanswer period, but I want to thank you for your——

Mr. ISSA. How many more do you have?

Mr. BAIR. Just a couple. It would just take me 30 seconds.

Mr. ISSA. Without objection, go ahead.

Mr. BAIR. We think that the Congress should shine more light

on the international process. Again, the closed meetings are a problem. Hold the meetings in a place that is safe and reasonably convenient for us to attend.

Research—we think Congress should increase funding for research to develop effective and economic alternatives. You have appropriated funds for, as you said, nearly $200 million worth of research, with very little to show for it so far.

Those are my recommendations, and I thank you for the extra

time.

[The prepared statement of Mr. Bair follows:]

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Mr. ISSA. Thank you.

Mr. Doniger.

STATEMENT OF DAVID DONIGER

Mr. DONIGER. Thank you very much, Chairman Issa, Congresswoman Watson. Thank you for the opportunity to be here on behalf

of NRDC, which for 30 years the Natural Resources Defense Council has been the principal environmental organization working on

protecting the ozone layer.

The global treaty, the Montreal Protocol, is a global success

story, and it has been backed by four Presidents of both parties.

It has accomplished a great deal already. It has saved millions of

Americans and even more people around the world from death by

skin cancer and even more people from illnesses such as non-fatal

skin cancer and cataracts. Now is not the time to tamper with the

success of this agreement.

As the Congresswoman mentioned, methyl bromide is the most

powerful ozone-depleting chemical that is still in wide use, and

Nobel Prize-winning scientist Mario Molina, whose comments I cite

in my testimony, has said that the ozone layer simply cannot fully

recover without the phaseout of all the ozone-depleting chemicals,

including methyl bromide.

Now, you have heard claims that the process is broken and that

there is a shortage of methyl bromide. In my view, there is a glut

of methyl bromide available today. More than twice the amount

EPA says is needed is available out there, and I will go through

why that is so.

But more to the point, or to start at the beginning, the amount

of methyl bromide that is said to be needed has been greatly exaggerated. How do we know this? The total amount that was used in

2003 by everyone, by all the users, not just the critical users, was

nearly 25 percent less than the amount EPA said the subgroup of

critical users needed in 2005. The same thing has happened again

this year.

Let me say a word more about the health effects of these exemptions. Dr. Sasha Madronich, who is an expert who helped develop

the EPA risk assessment model, working with that model has calculated that the exemptions that were issued in 2005 will lead to

more than 10 skin cancer deaths in the United States, more than

2,000 other skin cancer cases, and more than 700 cataract cases.

The exemptions for 2006 are roughly the same size, so it is appropriate to double those numbers, and the toll will continue to increase for each year that these exemptions go on.

Now, I am not saying we can get to zero right away. I am not

saying we don’t need exemptions. NRDC understands and accepts

that the exemption process is a part of the treaty. But it is being

abused, and it is the abuse that we need to stop and get the exemptions down to size and get toward zero as quickly as we can.

Let me call your attention to figure 2 in my testimony. It is on

page 6. I had intended to project some slides. I got here late, and

so it is my fault. I appreciate the staff’s cooperation in advance to

prepare for a projector, and we just did not get time—I did not get

here in time to set that up.

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But figure 2 shows in the top bar the amount of methyl bromide

in pounds, 17 million pounds, that was used by everybody, according to EPA data, in 2003. The critical use allowances for a smaller

group of farmers and millers and others were set, in 2005, at 21.1

million pounds, and for 2006, at 18 million pounds. Well, we do not

understand how the part can be larger than the whole and why the

usage should be that high.

There are a number of reasons why the usage was exaggerated:

the use of very old data that was out of date; the use of unreasonable assumptions that the pests will hit everybody everywhere at

once; the assumption that everybody needs their own reserve because methyl bromide cannot be moved around in the marketplace.

These are all unrealistic and wrong assumptions.

There is a strong injunction from the parties that the United

States agreed to to take advantage of tarping with impermeable

materials to keep the methyl bromide from leaking from the soil as

fast as it otherwise does and thereby reduce the amount needed to

accomplish the mission of killing the bugs and to reduce the leakage. There is no requirement for tarping or reduction on account

of tarping in these exemptions this year.

If I may be indulged for a couple more minutes?

Mr. ISSA. Go ahead.

Mr. DONIGER. Thank you. The sulfuryl fluoride——

Mr. ISSA. We are going to have a long Q&A.

Mr. DONIGER. I appreciate that. I understand. This is a new

chemical. I will save my story about sulfuryl fluoride for the question-and-answer period, if I may, but let me call your attention

very briefly to Figure 3, which is about stockpiles.

Now, the treaty, the agreements that our country has made are

very clear that there is not supposed to be new production unless

there are no stocks, unless the stocks are insufficient to meet the

need. We know from the partial data that EPA has given the Congress that the stocks at the beginning of 2004 were larger than the

critical use need. When you add to that the new production that

was authorized, you end up with an amount which is double the

asserted need, and the same is true for 2006. So we have a glut

of methyl bromide around. We do not have a shortage.

I will conclude my remarks with that. Thank you.

[The prepared statement of Mr. Doniger follows:]

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Mr. ISSA. Thank you.

Mr. Doniger, one question that I have is about these figures on

use. Isn’t it fair to say that we do not really track use as much as

we track purchases; that we know what was bought, but we really

do not have a complete understanding of what was used, particularly prior to 2005, because you had users who were not critical.

Maybe Mr. Wehrum can answer this as well. Is that true? Before

people had to get a specific critical use, we knew how much was

sold, but did we really know exactly how much was used?

Mr. WEHRUM. The U.S. EPA and the U.S. Government does not

track use.

Mr. ISSA. OK. So, Mr. Doniger, it would be fair to say, because

I come from the electronics industry, a lot of—I mean, inventory

imbalances I understand, and stockpiles I understand—but if I understand correctly, in 2003 at 17 million, if I were one of the noncritical use companies, I would be using up my stockpiles knowing

that in 2005 I am not going to be using it anymore. So I am going

to be in a phaseout process of going to alternatives.

Isn’t it true that could account for some of this reduction?

Mr. DONIGER. Well, let me say a word about these figures. You

are right that they are kind of inventory balance at the high level.

They represent the production and import, plus the amount of the

stockpile that was drawn down, the difference in the size of the

stockpile between the end of 2002 and the end of 2003. EPA put

those three numbers together and called them use in a document

they produced and they released to us.

Mr. ISSA. I have no problem with this being somebody’s best

guess.

Mr. DONIGER. Sure. Second——

Mr. ISSA. I just want to look at this and say, if I understand it

correctly, 2003 to 2005 is an interesting anomaly in that it goes up.

Since 2006 falls down to a number—and at the current rate of decline, 2007 is going to be a number lower than 2003—to a certain

extent, the anomaly is behind us. We are making progress toward

the zero number. My understanding is critical use goes on until

2015 in the United States, and unfettered use under the protocol

goes on—and maybe this is for the EPA—for China and India until

2015. Isn’t that correct?

Mr. WEHRUM. That is not my understanding, Mr. Chairman.

Mr. ISSA. My understanding is China, India, and other developing countries, including virtually all of Africa, are uncontrolled and

unlimited and unreporting.

Mr. WEHRUM. Developing countries that are parties to the Protocol do, in fact, have commitments under the Protocol, initially

to——

Mr. ISSA. Which is 2015.

Mr. WEHRUM. Well, initially to cap usage based on historic levels,

and then in the year 2005, an obligation to cut usage by 20 percent

became effective, and then that remains in effect until 2015, when

the prohibition comes into effect for developing——

Mr. ISSA. But isn’t it true that we don’t know China’s consumption or production because they don’t report.

Mr. WEHRUM. My understanding is China is a party to the Protocol, and they are subject to the commitments that I just described

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for developing countries that are members or parties to the Protocol.

Mr. DONIGER. If I may add, Congressman——

Mr. WEHRUM. Well, Congressman, just to complete the answer,

there are countries that are not parties to the Protocol, and I believe that is part of what you are getting at.

Mr. ISSA. Mr. Wehrum, I guess my overall concern is that I want

to see the end of ozone-depleting chemicals as soon as possible. I

agree with Mr. Doniger in what I think he is getting to, which is

I do not want to see stockpiles around that one way or the other

we have to get rid of in the future. I want to see that by the time

we get to the final cutoff there is none left because it would be absurd to have stockpiles that you then have to figure out a way to

get rid of or ultimately vent and you hurt the ozone layer.

However, my understanding is with the countries that are presently major agricultural countries that either are not reporting as

India is—I mean, India does not report to the IAEA. They actually

do not tell us about their nuclear program even though they are

supposed to. They are one of the non-reporting countries, as I understand, on this.

We have an inherent question, and it is a question for the ozone

layer, which is if the ozone layer isn’t getting any better, could it

be that, in fact, we are not—the United States has dramatically reduced its use, but that does not mean that the world has reduced

its use at all unless we have full compliance or at least full reporting.

Mr. WEHRUM. Mr. Chairman, to complete the thought from a moment ago, I think of the situation as three bins. There are parties

to the Protocol that are developed countries, such as the United

States and the European Union, for which there are well-defined

obligations, and commitments are tracked very closely. The second

bin I think about are parties to the Protocol that are developing

countries, and they have the obligations that I described a couple

minutes ago. Then there is a third bin, which are countries which

are not parties to the Protocol, and their activity—they do not have

an obligation to report whatever their activities are with regard to

methyl bromide utilization, and they are not subject to commitments that the other parties of the Protocol may be subject to.

So the sum of all that is there is some usage in the world that

we do not track and that is not reported on a regular basis. It is

my understanding, based on what we do know, that it is a relatively small amount of usage as compared to that used by the parties to the Protocol, but we do not have complete information, that

is true.

Mr. ISSA. As a San Diegan, it may be anecdotal, but we have

seen a huge part of our flower industry transferred from San Diego

to Guatemala, Ecuador, and these other countries. The Europeans

have transferred to Africa. It is no accident that they have transferred from this country, which is reducing dramatically, to a country in which it is substantially unregulated.

Mr. DONIGER. Congressman, I think it would be possible in the

supplementary period to get you information on which countries—

certainly which countries are a party. There is no important country economically or agriculturally which is not a party. It will also

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be possible to get you up-to-date information on who has been reporting and who is not.

The third thing I think it is important to get to you and I know

the EPA could supply—we will try as well—is an indication of

which developing countries are way ahead of schedule in reducing

methyl bromide, because they participate in work under the Multilateral Fund, and they make contract agreements, which they have

to follow through on and which they do report on, to reduce their

usage in exchange for smaller amounts of transitional financial assistance.

So there are quite a number of developing countries, including

some in the regions you mentioned—Africa and Central and Latin

America—which are way ahead of schedule, and they started from

a much lower base than we did.

Mr. ISSA. Mr. Wehrum, I would appreciate it if you could try to

get us the followup information, particularly as to what we know,

and what we don’t know—sort of each of the baskets—because ultimately we signed on to a global protocol intended to save the entire

world, and it is only as good as the total reduction.

One question that I would have, Mr. Wehrum, when you said

that the EPA had worked with other member countries to improve

the process, I would be interested to hear what has been accomplished, where you see some improvements, and if you could give

us some examples of that.

Mr. WEHRUM. Certainly, Mr. Chairman. And to your previous

point, we are certainly happy to put together the information that

you requested, and we will get that to you in a timely manner.

I believe significant improvement in the process has been made,

and mostly with regard to how the MBTOC operates. There were

legitimate concerns about the transparency of the process, concerned about the way in which the decisions were made by the

MBTOC and the ability of parties to understand—and stakeholders, not just parties to the Protocol, but stakeholders——

Mr. ISSA. I was there for Thanksgiving.

Mr. WEHRUM. I applaud your commitment, Mr. Chairman.

So with regard to the operation of the MBTOC, improvement has

been made. The MBTOC is better about documenting the decisions

that they have made, and I think evidence of that is in the last

consideration of the 2007 critical use exemption where we did not

get an ‘‘unable to assess’’ from the MBTOC. So that was an improvement, a recognition of the improvement in the process.

MBTOC has been encouraged to seek more freely information

from stakeholders and those who use methyl bromide and have petitioned for the use of methyl bromide under critical use exemptions. They have been encouraged to provide an indication earlier

rather than later of their inclination with regard to the applications that are made, and that helps protect against late hits and

give people an opportunity, if they think the MBTOC is pointed in

the wrong direction, to try to provide additional information and

input to the process.

So our belief is the sum of all of that is, we think the process

is working better, and as I said in my testimony, it is not a perfect

process, but we are making improvement over time, and it is worth

pointing out it is still a relatively new process. We have not been

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at that for very long. I think we have learned a lot, and we will

continue to apply what we have learned and continue to try to

make it better.

Mr. ISSA. I appreciate that, and we are going to undoubtedly do

a second round, but I want to ask one quick exit question of Mr.

Bair and Ms. Castellano.

I have noted that in 2001, basically you were paying roughly $1.80 a pound for methyl bromide. In 2002, that doubled to about

$3.50, and I understand that currently it is about $7 a pound.

I am constantly being told by providers or potential providers of

alternatives that they are cost-effective, that their alternatives are

reasonably priced or are reasonably close in total cost to methyl

bromide.

The interesting thing was that I started this process in about 2002, when it had just jumped up to about $3.50, and they said

they were close. This year, they are still saying they are close, and

you have a $7 methyl bromide.

Could you just give us your view of—and obviously, I understand

that if they worked equally well, you would probably be using them

regardless of price. But on those which we are being told are alternatives in some narrow or sometime use, can you give us sort of

an understanding of the price points? Because the estimation that

I have is that methyl bromide will double again in the next year

or two, that inherently as there is a reduction in who is making

it and so on, the price is going to spiral upward.

Mr. BAIR. I think that——

Mr. ISSA. I hate to get into price here.

Mr. BAIR. No, but I think your point is a valid one because despite, you know, the comments that Mr. Doniger has made about

stocks, Econ. 101 would suggest that the doubling of the price of

methyl bromide in the last 3 or 4 years would suggest that those

stocks aren’t all that significant. The prices have quadrupled since

the baseline year, and as you pointed out, doubled in the last 3

years. And that is also contrary to what we continually hear from

the U.S. EPA, who say, Gee, you know, these stocks must be dramatically large because the price of methyl bromide is going down.

And that does not fit with what anybody in the industry or any of

the applicators know to be true. The price, in fact, is going up and

has gone up dramatically because we are producing less of it—and,

frankly, using far less of it. So the market is a tiny sliver of what

it was, you know, a few years ago.

Mr. ISSA. Ms. Castellano.

Ms. CASTELLANO. I think that is a good point, but there is a misconception that we are using methyl bromide because it is the

cheap alternative and we do not want to get into other alternatives.

That is absolutely not true. If there was an alternative out there

that worked for us, we would absolutely use it. In our case, it costs

now upwards of $2,000 an acre to fumigate a field with methyl bromide, and that is before we have put anything in the ground,

grown it, and processed it.

So it is not a cheap product. It is just the only thing we have

to use. Some of the alternatives that have been suggested aren’t

good enough. They also require two, three, five applications, and

there is time that has to be put between those applications before

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we can put our crop in the ground. We cannot do that. And it is

also in many situations not safe for the workers to be applying an

alternative four or five times, whereas the methyl bromide is one

time.

So, absolutely, the price is getting out of control, but it is still

our only alternative out there, and we have to keep using it.

Mr. BAIR. Also, Mr. Kucinich when he was here, he referenced

organic, and, you know, that is a growing segment of the market.

There have been mills that have attempted to use environmentally

friendly alternatives such as high heat, for example. I am aware

of a mill in New York State that used high heat and caused significant structural damage to the facility, which then was very expensive to fix.

We know high heat kills insects. Cereal plants have been using

it for 50 years to kill insects. But we do not generally have the capacity in a flour mill to turn the heat up to 140 degrees and hold

it there for 24 hours in order to kill insects. It can be done. It is

extremely expensive, and there are other considerations, such as

structural damage to your facility, that cause safety considerations.

Ms. CASTELLANO. Congressman Issa, could I also make a comment on the comment that was made about organic strawberries?

Mr. ISSA. Sure.

Ms. CASTELLANO. Being from California and discussing strawberry growers in California, we are cut flower growers. But we are

surrounded by strawberry growers, and there tends to be a lot of

comments made about organic strawberry growers in California.

And I want to clarify something for everyone to understand. When

strawberry growers claim that they are organic, that always

doesn’t mean exactly what we think it means. What is happening

to strawberry growers in California on a large level—I am not saying it—it is not all 60 of the growers, but plugs are being grown

in South America. They are being grown in Mexico. They are being

grown in Guatemala. They are being grown—and what plugs are

in the agricultural industry is a plant is grown from a seed somewhere else. You wait until you actually have a plant. You relocate

it and plant it in a different farm.

What is happening for strawberry growers at a tremendous rate

in California is plugs in Mexico and Guatemala, being highly fumigated with methyl bromide and other chemicals that EPA does not

allow to be used here in the United States, is producing a plant

that is then brought to California, planted in California ground,

and then is organic in California ground.

So when we say someone is an organic grower, we need to be

clear if that plant has been organic from day one or if the California ground that it is growing in is organic.

So I just want to clear up that misconception that often gets confused in this discussion.

Mr. ISSA. Thank you.

Ms. Watson.

Ms. WATSON. I again want to thank you, Mr. Chairman, for holding this hearing so we can have these open discussions.

I would like to address my comment to Mr. Doniger, and to the

rest of the panel, I want you to know that for 17 years, I chaired

the Health and Human Services Committee in California in the

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Senate. And the last 3 years of my tenure there, we had methyl

bromide debates in front of the committee, and every time the issue

came—and we had them in a room that held 750 people. A great

many of them were advocates, a great many of them were critics.

And when all the facts were laid in front of the committee of nine

people, they voted the methyl bromide bill down. It was done three

times. Maybe we spent 124 hours, maybe more.

On the last day of the session, the bill was pulled out of my committee at 4 a.m., taken up by the pro temp of the House, and let

out. I resigned my chairmanship because I was thoroughly convinced that the public’s interest was not taken into consideration.

It was the economic interest of the growers alone.

What I was striving for was a balance between the two, because

as Chair of Health, I wanted to see policy pass out of my committee

that was in the best interest of the largest number of people.

So my questions go to you, Mr. Doniger, with that background,

and remember what my interest is: Health first, and then balancing the health and economic benefits second. What impact does

a large amount of exemptions have on the farmers who try out the

alternative chemicals or pest control techniques and on the companies that make them?

Mr. DONIGER. Well, I think what is happening is a major discouragement to those who try the alternatives and those who try to

provide the alternatives. And let me give as an example and a contrast how the CFC phaseout worked out. There were firm deadlines

and companies that tried—that went into the alternatives, either

as users or as providers, counted on the phaseout deadlines sticking. And they did stick and the price went up somewhat for the old

chemical, and the need went up for the new chemical, and it created the opportunity for entrepreneurs, both in the users and the

producers, to come up with these alternatives. And it worked very

well. We had an almost complete phaseout of CFCs in less than the

10-year period allowed for the original phaseout.

What is happening with methyl bromide is that the rug is being

pulled out from under the providers of the alternatives and also

from under those who experiment with the alternatives.

Ms. WATSON. Would you clarify? When you say the rug is being

pulled out, who is pulling the rug out?

Mr. DONIGER. When the deadlines are extended by way of granting large exemptions, the message that is sent to the users of the

products is stick with the old, you don’t need to change. And the

market prices are not there for the alternatives.

So I will give you an example from the milling industry and how

this is working out right now in the 2006 rules that EPA just

issued. I am sure Mr. Bair will have his own perspective on this.

Sulfuryl fluoride is a chemical that is now registered by the EPA,

and in all or virtually all the States, for use in mills and the other

food-processing facilities to kill the bugs as an alternative to methyl bromide.

Now, in my opinion, EPA should have said, ‘‘now that sulfuryl

fluoride and a list of other materials that are in Mr. Wehrum’s testimony are available for that set of uses, we don’t need methyl bromide anymore, let’s give them a year, maybe 2 years, and end the

use of methyl bromide in that category of structural fumigation.’’

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Instead, what EPA said was: How long will it take sulfuryl fluoride to penetrate the market if there is no methyl bromide phaseout? And the answer EPA came up with was they would make 15

percent of the market inroads each year. So it would take, 15 percent a year, 8 years for sulfuryl fluoride to replace methyl bromide,

and that is the length of time EPA has indicated it is prepared to

leave methyl bromide in place for the structural fumigation.

So it is backward. Instead of the phaseout driving a faster penetration of sulfuryl fluoride, it is holding back the penetration of sulfuryl fluoride because it is protecting those who are using methyl

bromide and supplying methyl bromide and letting them continue

with business as usual. That is not how we did it with CFCs. If

we had done it that way with CFCs, we would still be stuck with

CFCs.

The way to get rid of these chemicals in an orderly way is to set

a phaseout schedule and stick to it and reward those who try the

alternatives and provide the alternatives instead of undercutting

them.

Ms. WATSON. Let me then go over to Mr. Wehrum. You are representing the EPA. The United States led the international effort

to save this protective ozone layer that we are so concerned about

through the development of the Montreal Protocol. Right?

Mr. WEHRUM. Correct.

Ms. WATSON. OK. And since President Reagan, every President

has upheld our commitment under this treaty, which has been

widely acclaimed as the most successful environmental treaty ever,

and apparently it is showing some results.

In previous hearings, administration witnesses have affirmed

that President Bush also strongly supports the treaty. In 2003, witnesses from both EPA and the State Department stated that they

did not believe any changes to the Montreal Protocol or current law

were necessary.

Now we have a bill, H.R. 1257. Will the administration take a

position in opposition or support of that bill? Or will they violate

their commitments under the treaty? Do you have any idea?

Mr. WEHRUM. The administration has not taken a position on

that bill, Congresswoman.

Ms. WATSON. Has the administration seen the bill?

Mr. WEHRUM. Yes, ma’am. Yes, Congresswoman.

Ms. WATSON. Could you indicate to this committee, since we are

holding this hearing, just where the administration is leaning on

it? Could you do that for us?

Mr. WEHRUM. I am unable to do that today, Congresswoman.

Ms. WATSON. No, not today. I mean could you gather that information, if you can, and inform us here at the committee?

Mr. WEHRUM. I am certainly willing to consult with my colleagues in the administration and determine if we can develop a

statement on the legislation. I am willing to do that, Congresswoman.

Ms. WATSON. Well, I again want to commend the Chair because

these are the kinds of oversight hearings we need to have so we

can be on the same page with our discussions, because remember,

this is an international protocol we are talking about, and that is

why I was asking Mr. Doniger who, you know, is responsible. And

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I don’t know whether the administration is in accord with H.R.

1257 or they have other changes. But we would like to have some

indication of where they stand on that.

H.R. 1257 would amend the Clean Air Act to provide that for

2007, the amount of methyl bromide allowed for critical uses would

be equal to the amount requested by the United States at the international negotiations. And this is more methyl bromide than the

parties to the Protocol authorized for the U.S. critical use for that

year. And if we adopt this bill as law, then we will be in violation,

so that is why we need some indication up front as to where the

administration is coming from. We would appreciate any kind of

feedback that you could give us.

If we were to violate the Montreal Protocol, isn’t it likely that

other countries will also feel free to do that? If we do not comply,

why should they? And we do know—and you are going to provide

us with the list of those countries, particularly developing countries, that are not signees to the Protocol.

So I wanted to throw that out to you so when you report back

to us, we can have maybe a little clearer picture.

I have a couple more questions, Mr. Chairman, if you——

Mr. ISSA. Go ahead. Get it off your chest.

Ms. WATSON. OK. Since we are a party to the Montreal Protocol

and it has been since the time of President Ronald Reagan signed

onto this. Now, if H.R. 1257 were enacted, it would certainly place

the United States in noncompliance. What I would like to see, Mr.

Chairman, is that we hold more of these hearings. I think the representative Ms. Castellano makes a point when she clarifies what

we mean by organically grown. Is it the soil that pesticides have

been spread on here, or are they from countries that are in noncompliance?

Mr. ISSA. It is like the American flag with ‘‘Made In China’’ on

it.

Ms. WATSON. Exactly. I think these are things that we need to

know and we need to have this information when we discuss public

policy. And so I hope we will have followup hearings to this, too.

This is the last question to Mr. Doniger. The United States has

an international reputation as a leader, and as a leader in protecting the ozone layer. What is your view if such a bill as H.R. 1257

were signed into law? What would happen?

Mr. DONIGER. Well, I do think it would place the United States

in violation because instead of following the process for exemptions,

we would simply be saying we get whatever we want, and that is

not in compliance with our treaty obligations.

I think more generally the United States has hurt its reputation

in the past several years by the vigorous pushing of these exemptions without full disclosure of information. The stockpile condition,

for example, is a requirement that the parties imposed that the

United States agreed to that there not be production to the extent

that the stocks were sufficient to meet the need. The U.S. Government has not disclosed the stockpile information to the public here,

to the Congress here, except in one veiled letter, to us, or to other

countries. And it is hurting the U.S. perception of leadership and

responsibility in the eyes of other countries, and this has ramifications in other areas of our foreign policy as well.

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Ms. WATSON. Let me just intervene here and I am going to address this question to the Chair and maybe to the attorney. Is

there any reason why this information needs to be top secret and

not shared with us here in Congress?

Mr. ISSA. No. I am informed that——

Ms. WATSON. It is a privacy issue?

Mr. ISSA [continuing]. Asking people what they own, you know,

exceeds the normal request without a purpose.

If I can actually clarify something with the EPA, no matter how

much you have in your stockpile, if you do not have a use permit,

you cannot use it. Isn’t that correct? So a stockpile becomes worth

zero if—for example, the people who do not have critical use exemptions, they cannot use up their stocks just because they happen

to have it. Isn’t that correct?

Mr. WEHRUM. That is not correct, Mr. Chairman.

Mr. ISSA. They can actually continue—does that mean that there

are people who may be using methyl bromide without a critical use

exemption simply because they have stockpiles. Is that correct?

Mr. WEHRUM. That is correct.

Mr. DONIGER. It is not that they have the stockpiles. They are

purchasing the stockpile from the same suppliers. Generally, farmers do not keep their own stockpile. And the same I believe is true

of the millers and other users. They buy the stocks, they buy the

material with the service from applicators.

Mr. ISSA. With the gentlelady’s indulgence, that I think is a

question that where the EPA stands on it and how you are going

to ensure that if we say that we are only using X, that we not be

using X under the critical use and Y for other purposes. I certainly

think that this is something that on a bipartisan basis we would

like to know what your program is to prevent that in the future.

I am not sure that I need to know how much somebody has in

their garage. What I do need to know is: Is it being used? And if

so, why would we continue to tolerate people who no longer have

a valid use for it because there are alternatives or because there

has been a complete phaseout in their category, and yet they are

still buying and using it? I think that flies in the face of Mr. Bair

and Ms. Castellano saying we are doing all this paperwork to justify why we still need it and we welcome an opportunity to use an

alternative. That is in the system. That is in the Protocol four

Presidents have all signed onto. But I don’t think anyone has

signed onto this back door that Mr. Doniger talks of.

Mr. WEHRUM. If I may, Mr. Chairman, a couple of observations.

One is the amount of stocks is finite and is diminishing over time.

We have, in fact, as an agency collected information on the amount

of stocks in an effort to understand how much there is and how

that number changes over time. But we are also bound by very

strict confidentiality requirements as it applies to business confidential information.

Mr. ISSA. But you know and you cannot tell us?

Mr. WEHRUM. The matter is actually currently under litigation.

The Natural Resources Defense Council sought this information

through a Freedom of Information request. Certain of the businesses that supplied information contested the agency’s initial determination. Our initial determination was that the aggregate

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number was a number that we believed that we could share and

not violate our confidentiality obligations. But certain companies

that provided some of the underlying information disagreed with

that, and so the matter is currently a matter of litigation. The——

Mr. DONIGER. If I——

Mr. WEHRUM. Please, let me finish. The last thing I will say is,

it is not a shock that stocks are out there. That is the way the

Montreal Protocol has operated. A good example is on the refrigerant side where there are plenty of cars on the road that use

banned CFCs in their air conditioners, and if you have one of those

cars today, you can go buy replacement refrigerant off the shelf.

That is not illegal. It is not wrong. There was an expectation that

the amount in stock would diminish over time, but that there was

a reason in that case to allow people to continue to maintain cars

that were using the banned materials.

Mr. ISSA. The U.S. Air Force is still flying our Lear 31s or 35s

that we bought in the 1970’s, and they still have old air conditioners.

Mr. WEHRUM. So the fact of the existence of stocks is not unusual

or unprecedented, just in terms of how this treaty and how this

Protocol is operated, and it has been a factor in our decisionmaking. So it is an issue that we are well aware of.

Mr. DONIGER. Two quick points, if I may.

One, the EPA and the NRDC are in agreement that the total

number of the stockpile is not confidential, but until this litigation

can be resolved—and it is litigation brought by two of the suppliers, who are not prosecuting their cases, they are doing nothing except putting a hold—it is the equivalent of a senatorial hold on the

disclosure of this information.

Mr. ISSA. Thank you for saying Senate.

Mr. DONIGER. Yes. [Laughter.]

Mr. DONIGER. And the producers and distributors, who never appear before these hearings, are quite content to keep the information secret, not just from us, not just from other governments, but

from the users, because it makes it easier to charge higher prices

if you can convey to the users and everyone else the perception

that the material is really scarce.

I have a document from one of these companies, which I will

make available to the committee, which says use the new production first, keep the stocks in reserve, pass the stocks over to the

next year—absolutely opposite of normal inventory practices, which

is rotate your stock, use the old stuff first. This is an evasion——

Mr. ISSA. Unless you are in the wine business.

Mr. DONIGER. That is true. And methyl bromide doesn’t get better as it gets older. So the other point is that it is true that stocks

of other chemicals are—it is not that the stocks are regulated. It

is that the new production is supposed to be limited to the amount

that cannot be supplied from the stocks. With CFCs in older air

conditioners, we do not have any new production, and people do

use the stocks to meet the needs of old cars and old Lear jets. But

with methyl bromide, you are supposed to take the stocks into account and reduce the amount of new production so that it does not

increase beyond what is really needed—not double what is needed,

and so that is the error here. That is why we have gone to court.

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We are expecting a decision from the court of appeals any week

now, which would address the stocks issue, the excess assessment

of use, and also the data disclosure issue.

Mr. BAIR. Mr. Chairman, may I speak——

Mr. WEHRUM. Mr. Chairman, if I may——

Mr. ISSA. Certainly, as long as we let——

Mr. BAIR. Mr. Doniger is getting liberal use of your time, and I

would like to have an opportunity to respond at some point.

Mr. WEHRUM. Just, Mr. Bair, with your indulgence.

Mr. ISSA. The Government first.

Mr. WEHRUM. Just a point. The U.S. Government, of course, does

not agree with everything that Mr. Doniger just said. There is litigation on many of the points that he just described related to the

rule that we promulgated to adopt the critical use—the CUE process within our regulations and to adopt the first of the critical use

exemptions. So we have defended ourselves in court, and we look

forward to a decision on the merits by the D.C. Circuit.

Ms. WATSON. Let me just——

Mr. ISSA. Mr. Bair, and then——

Ms. WATSON. Yes, let me just comment on what he just said.

That is the reason why I asked if you could report back to us, because we don’t know where the U.S. administration stands on the

changes that would be required in the law. So if you can clarify,

just give us information. And when I asked about the stockpiles,

I was talking about the overall supplies. I am not talking about individual users and individual inventories. I just wanted to know—

and we do have a chart. If you don’t agree with everything that Mr.

Doniger says, maybe you can put out your own chart just for our

information. Is that something you can do?

Mr. WEHRUM. As long as it does not violate our confidentiality

obligations under the law.

Ms. WATSON. Oh, come on. I just explained that. Don’t give me

that kind of rhetoric. What I said is—you know, there is confidential information. That is not what I am asking for. Can you give

us the figures of the overall supply, stockpile?

Mr. ISSA. That is what is in litigation, is what he is saying. That

is actually what is in litigation.

Ms. WATSON. So you don’t go along with what he has here?

Mr. WEHRUM. Well, the U.S. Government’s position was that the

aggregate number we determined did not need to be considered

confidential business information.

Ms. WATSON. OK, good. Can you give us what you have?

Mr. WEHRUM. No, ma’am, because our position was challenged in

court, and we have to await the decision of the judge before we can

determine how to proceed.

Mr. DONIGER. I have to wait. I am not sure you have to wait.

Mr. ISSA. Well, look, I am going to sort of take a little bit of liberty here. I have heard that you expect it within a couple of weeks.

We will make every effort to leave the record open, but even if it

is already closed, I assure you we will welcome the information

when it becomes available.

I will take the liberty as chairman of saying that if it is not

forthcoming in a reasonable period of time—in other words, if the

court stalls—then I do believe it is within the interest of this subVerDate 11-MAY-2000 11:00 Aug 17, 2006 Jkt 000000 PO 00000 Frm 00075 Fmt 6633 Sfmt 6633 D:\DOCS\26716.TXT HGOVREF1 PsN: HGOVREF1
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committee that we have a separate fact-finding on the stockpiles.

I think we have learned enough today about the stockpiles that, although I do agree that maybe the Protocol is spending too much

time on stockpiles, when it comes to this subcommittee ensuring

that those who have a legitimate use for methyl bromide are not

simply getting it out of substantial stockpiles or, what I think I

heard Mr. Doniger say, the potential that there is an excess production based on excess justifications for critical use that then may

potentially go sideways through stockpiles into other people’s

hands. This subcommittee is interested in the efficiency of Government, the effectiveness of Government, and the adherence to the

Montreal Protocol. This hearing was called in no small part because it is the belief of this subcommittee—this chairman, at

least—that, for example, the EPA’s taking until January 31st when

you had 6 months to come up with a rule put private enterprise

at an unfair disadvantage because you literally had fumigators who

were not able to do what they should be able to do, or at least were

afraid they would be fined. That should not be the way we do business.

It is the intent of this subcommittee to ensure that while we adhere to the Montreal Protocol, on the flip side, the other parties to

the Montreal Protocol adhere to the letter of the law as well. I

think that is where Ms. Castellano particularly says it, which is

these exemptions are in the Protocol, and if you don’t mind, I am

going to close my question, Mr. Doniger, specifically: I am very

much of the right age and background to understand when we did

away with both our aerosol cans that were ozone-depleting and

particularly with freon. When an alternative existed, the only problem was having machinery that then worked with the alternative,

because, unfortunately, old air conditioners were not tolerant of the

new freon, you know, Freon 12 and so on.

Today, wouldn’t you agree that although we have made a lot of

progress, science has not produced a universal alternative to methyl bromide for all uses from a chemical standpoint, leaving 140-degree heat in a factory out? Isn’t that sort of the state today?

Mr. DONIGER. Well, I agree this was true with CFCs as well, that

you had one chemical that was replaced by a suite of chemicals.

Some of them were not even in the same family of chemicals. And

that is what is happening—that is what has happened with each

ozone-depleting chemical, and that is what is happening with

methyl bromide.

So although this chemical iodomethane is pretty close, if it does

get registered, to a drop-in alternative, it isn’t necessary to have a

drop-in alternative, and we don’t expect to have a single one that

covers the field. What we do think is that you can pick off niches

of the market, niche by niche, and get down to the hard cases much

faster than we have.

Mr. ISSA. We look forward to working with you, the other panelists, and other contributors to this, to find those alternatives and

to ensure—and particularly for the folks in industry here today—

that this subcommittee will do everything it can to streamline the

process and to ensure that the exemptions continue to be granted

in a timely—well, become granted in a more timely-fashion to the

extent that there is not an alternative.

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I think the gentlelady and myself would both join in saying when

there is an alternative, we look forward to your companies embracing it at the earliest possible time and would also want to be just

as strong a watchdog on compliance as we are on the agencies.

The gentlelady has one more round.

Ms. WATSON. I would like to ask Mr. Doniger if he could do a

little research on my behalf. As I mentioned, in my California experience we had farmers come in, and these were food farmers. These

were not florals. It might be a whole different story. But if you

could do a little research and see what the alternatives some of the

farmers in California are using to methyl bromide, I would like to

have that information, if you would.

Thank you very much, Mr. Chairman.

Mr. ISSA. Well, thank you, Ms. Watson. I will dispense with a full

closing statement and simply thank our witnesses for not only

thoroughly delightful opening statements, but I think a lively discussion that took us not just to the issue that we came here for,

but as I requested, I think you have done a good job of opening up

additional areas for this subcommittee to be involved in.

I must admit I am not sure my authority over organic farming

is as comprehensive as I would like, but I will speak to the chairman about whether we have that, because I do believe that we

have to make sure that we are a committee of facts, and if there

are organic alternatives, I am thrilled. But if we are simply manufacturing in another country using other chemicals and then claiming something is possible, I have been down the road in the electronics business. For many years I had people who said ‘‘Made In

America,’’ but they imported a complete stuffed board and then put

it in a box in the United States and proudly said ‘‘Made In America.’’ That is not the right way to increase American jobs. It is certainly not the right way to justify organic agriculture.

So as I said earlier, we will hold the record open for at least 2

weeks. I will make every effort to hold it open until we can include

an aggregate stockpile figure. I would welcome all of you to give

us your additional thoughts separately on the stockpile situation,

and particularly on whether or not there is a substantial amount

of clandestine use outside of critical use exemption. This committee

has very much supported—at least the chairman has supported—

critical use being retained, but that is the front door. We will be

interested, and with the gentlelady’s permission, I expect we will

be following up on making sure that back-door use—in other words,

ozone-depleting that is not critical and required—is reduced.

And with that, I thank you and this hearing is adjourned.

[Whereupon, at 3:33 p.m., the subcommittee was adjourned.]

[The prepared statement of Hon. Dennis J. Kucinich and additional information submitted for the hearing record follow:]

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