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CLEAN ENERGY POLICIES THAT REDUCE OUR 

DEPENDENCE ON OIL 

HEARING 

BEFORE THE

SUBCOMMITTEE ON ENERGY AND ENVIRONMENT 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

APRIL 28, 2010 

Serial No. 111–113 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

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(II) 

COMMITTEE ON ENERGY AND COMMERCE 

HENRY A. WAXMAN, California, Chairman 

JOHN D. DINGELL, Michigan 

Chairman Emeritus 

EDWARD J. MARKEY, Massachusetts 

RICK BOUCHER, Virginia 

FRANK PALLONE, JR., New Jersey 

BART GORDON, Tennessee 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

BART STUPAK, Michigan 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

Vice Chairman 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANE HARMAN, California 

TOM ALLEN, Maine 

JANICE D. SCHAKOWSKY, Illinois 

CHARLES A. GONZALEZ, Texas 

JAY INSLEE, Washington 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

ANTHONY D. WEINER, New York 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

CHARLIE MELANCON, Louisiana 

JOHN BARROW, Georgia 

BARON P. HILL, Indiana 

DORIS O. MATSUI, California 

DONNA M. CHRISTENSEN, Virgin Islands 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

CHRISTOPHER S. MURPHY, Connecticut 

ZACHARY T. SPACE, Ohio 

JERRY MCNERNEY, California 

BETTY SUTTON, Ohio 

BRUCE L. BRALEY, Iowa 

PETER WELCH, Vermont 

JOE BARTON, Texas 

Ranking Member 

RALPH M. HALL, Texas 

FRED UPTON, Michigan 

CLIFF STEARNS, Florida 

NATHAN DEAL, Georgia 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOHN B. SHADEGG, Arizona 

ROY BLUNT, Missouri 

STEVE BUYER, Indiana 

GEORGE RADANOVICH, California 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO MACK, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

SUE WILKINS MYRICK, North Carolina 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 

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(III) 

SUBCOMMITTEE ON ENERGY AND ENVIRONMENT

EDWARD J. MARKEY, Massachusetts, Chairman 

MICHAEL F. DOYLE, Pennsylvania 

JAY INSLEE, Washington 

G.K. BUTTERFIELD, North Carolina 

CHARLIE MELANCON, Louisiana 

BARON HILL, Indiana 

DORIS O. MATSUI, California 

JERRY MCNERNEY, California 

PETER WELCH, Vermont 

JOHN D. DINGELL, Michigan 

RICK BOUCHER, Virginia 

FRANK PALLONE, JR., New Jersey 

ELIOT ENGEL, New York 

GENE GREEN, Texas 

LOIS CAPPS, California 

JANE HARMAN, California 

CHARLES A. GONZALEZ, Texas 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

JIM MATHESON, Utah 

JOHN BARROW, Georgia 

RALPH M. HALL, Texas 

FRED UPTON, Michigan 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOHN B. SHADEGG, Arizona 

STEVE BUYER, Indiana 

GREG WALDEN, Oregon 

SUE WILKINS MYRICK, North Carolina 

JOHN SULLIVAN, Oklahoma 

MICHAEL C. BURGESS, Texas 

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C O N T E N T S 

Page 

Hon. Edward J. Markey, a Representative in Congress from the Commonwealth of Massachussetts, opening statement ................................................... 1 

Hon. Fred Upton, a Representative in Congress from the State of Michigan, 

opening statement ................................................................................................ 3 

Hon. Henry A. Waxman, a Representative in Congress from the State of 

California, opening statement ............................................................................. 4 

Hon. Ed Whitfield, a Representative in Congress from the Commonwealth 

of Kentucky, opening statement ......................................................................... 6 

Hon. John D. Dingell, a Representative in Congress from the State of Michigan, opening statement ....................................................................................... 7 

Hon. Joe Barton, a Representative in Congress from the State of Texas, 

opening statement ................................................................................................ 7 

Prepared statement .......................................................................................... 10 

Hon. Charlie Melancon, a Representative in Congress from the State of Louisiana, opening statement ................................................................................... 16 

Hon. John Shimkus, a Representative in Congress from the State of Illinois, 

opening statement ................................................................................................ 17 

Hon. Doris O. Matsui, a Representative in Congress from the State of California, opening statement .................................................................................... 18 

Hon. Joseph R. Pitts, a Representative in Congress from the Commonwealth 

of Pennsylvania, opening statement ................................................................... 19 

Hon. Gene Green, a Representative in Congress from the State of Texas, 

opening statement ................................................................................................ 20 

Hon. Lois Capps, a Representative in Congress from the State of California, 

opening statement ................................................................................................ 21 

Hon. Cliff Stearns, a Representative in Congress from the State of Florida, 

opening statement ................................................................................................ 22 

Hon. Eliot L. Engel, a Representative in Congress from the State of New 

York, opening statement ...................................................................................... 23 

Hon. John B. Shadegg, a Representative in Congress from the State of Arizona, opening statement ...................................................................................... 24 

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

New Jersey, opening statement .......................................................................... 25 

Hon. Steve Scalise, a Representative in Congress from the State of Louisiana, 

opening statement ................................................................................................ 26 

Hon. Jay Inslee, a Representative in Congress from the State of Washington, 

opening statement ................................................................................................ 27 

Hon. John Sullivan, a Representative in Congress from the State of Oklahoma, opening statement .................................................................................... 28 

Hon. Jerry McNerney, a Representative in Congress from the State of California, opening statement .................................................................................... 29 

WITNESSES

Lisa P. Jackson, Administrator, Environmental Protection Agency ................... 30 

Prepared statement .......................................................................................... 33 

Answers to submitted questions ...................................................................... 231 

Fred Smith, Chairman, President and Chief Executive Officer, FedEx Corporation ................................................................................................................. 69 

Prepared statement .......................................................................................... 71 

Jason Wolf, Vice President for North America Better Place ................................ 82 

Prepared statement .......................................................................................... 84 

Robert Diamond, Former Lieutenant, U.S. Navy, Security Fellow, Truman 

National Security Project .................................................................................... 92 

Prepared statement .......................................................................................... 94 

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Page

VI 

Charles Drevna, President of the National Petrochemical and Refiners Association .................................................................................................................... 97 

Prepared statement .......................................................................................... 99 

SUBMITTED MATERIAL

Letter of March 17, 2010, from the Alliance of Automobile Manufacturers 

to United States House of Representatives and Senate, submitted by Mr. 

Markey .................................................................................................................. 133 

Letter of March 17, 2010, from the Association of International Automobile 

Manufacturers to United States House of Representatives, submitted by 

Mr. Markey ........................................................................................................... 135 

Letter of March 15, 2010, from the UAW to United States House of Representatives and Senate, submitted by Mr. Markey ......................................... 137 

Documents submitted by Ms. Capps ...................................................................... 139 

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(1) 

CLEAN ENERGY POLICIES THAT REDUCE 

OUR DEPENDENCE ON OIL 

WEDNESDAY, APRIL 28, 2010 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON ENERGY AND ENVIRONMENT, COMMITTEE ON ENERGY AND COMMERCE, Washington, DC. 

The subcommittee met, pursuant to call, at 9:36 a.m., in Room 

2123, Rayburn House Office Building, Hon. Edward J. Markey 

[chairman of the subcommittee] presiding. 

Present: Representatives Markey, Doyle, Inslee, Melancon, Matsui, McNerney, Welch, Dingell, Pallone, Engel, Green, Capps, 

Matheson, Barrow, Waxman [ex officio], Upton, Stearns, Whitfield, 

Shimkus, Shadegg, Pitts, Bono Mack, Sullivan, Burgess, Scalise, 

Griffith, and Barton [ex officio]. 

Also Present: Representative Latta. 

Staff Present: Phil Barnett, Staff Director; Bruce Wolpe, Senior 

Advisor; Greg Dotson, Chief Counsel, Energy and Environment; 

Lorie Schmidt, Senior Counsel; Alexandra Teitz, Senior Counsel; 

Michal Freedhof, Counsel; Alex Barron, Professional Staff Member; 

Melissa Cheatham, Professional Staff Member; Caitlin Haberman, 

Special Assistant; Karen Lightfoot, Communications Director, Senior Policy Advisor; Lindsay Vidal, Special Assistant; Mitchell 

Smiley, Special Assistant; Mary Neumayr, Minority Counsel; Andrea Spring, Minority Professional Staff; Aaron Cutler, Minority 

Counsel; and Garrett Golding, Minority Legislative Analyst. 

OPENING STATEMENT OF HON. EDWARD J. MARKEY, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH 

OF MASSACHUSETTS 

Mr. MARKEY. Good morning. And welcome to the Subcommittee 

on Energy and the Environment. 

Consumers today spend more than half a billion dollars a day on 

foreign oil. That is half of our trade deficit. Between 2001 and 

2008, when gasoline increased from $1.46 to $3.27 a gallon, the annual household’s annual energy cost increased by almost $2,000, 

slightly more than the average tax cut provided during the same 

period. These gas dollars go straight to OPEC, and some of them 

wind up in the hands of terrorists. 

We have spent too long resisting efforts to reduce our dependence 

on oil. As Tom Friedman of the New York Times puts it, the price 

of oil and the path of freedom run in opposite directions. Some oil 

payments find their way to Iran to fund its nuclear program, and 

other payments help fund teachings that perpetuate hate against 

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2 

Americans. But until recently, we were on the path of ever-increasing oil dependence. 

As you can see from the red line, in 2007 the Department of Energy projected increased levels of oil consumption far into the future. These are based on the Bush administration’s oil-friendly 

policies, and these numbers were actually put together by the Bush 

administration Department of Energy. 

With Democrats in control of Congress, we moved quickly to end 

this dangerous cycle, enacting the first mandated fuel economy provisions in 32 years, which was a huge first step. President Obama 

accelerated their implementation with a 35.5 mile-per-gallon standard by 2016. Combined with the Renewable Fuel Standard and the 

Recovery Act measures, you can see from the blue line that we 

have frozen our levels of oil consumption for the foreseeable future. 

Again, that number from the Energy Information Agency. 

But we can and we must do more. The EPA has modeled what 

is technologically possible from a range of clean energy policies like 

those in the Waxman-Markey bill. And you can see from the green 

line that we can save more than all of the oil we currently import 

from OPEC, as much as 4 million or 7 million barrels a day more 

than we have already accomplished. That is the green line. 

So we must continue down the path to further reducing our oil dependence. The Waxman-Markey bill includes $20 billion and 

other measures to deploy plug-in hybrid and all-electric vehicles, 

and has other provisions to help save oil. 

Now, I am sure we will be told, ‘‘No, you can’t. It will cost too 

much. It can’t be done.’’ But let me remind you, the automobile industry delivered that very same message for nearly a decade. They 

said the technology didn’t exist; that we would all have to drive 

tiny little go-carts if we raised fuel economy standards; and that 

the industry would suffer. 

Meanwhile, other countries innovated. The U.S. bled manufacturing jobs. Some auto makers closed facilities, APTA facilities, in 

part because we didn’t raise standards quickly enough for them to 

compete. A recent study found that by transitioning to electric vehicles we could create 1.9 million new jobs by 2030 in the United 

States; we can improve our trade deficit by $127 billion per year; 

and the typical U.S. household would pocket almost $4,000 extra 

in gasoline saved and other benefits. 

But if we do not act, we will prevent a generation of Americans 

from competing in the largest economic growth opportunity of the 

21st century: The 2 million new clean energy jobs that would be 

created in America under the Waxman-Markey bill will be, unfortunately, created overseas; and we will simply trade our dependence on foreign oil for dependence on Chinese solar panels, Korean 

batteries, and German wind turbines. 

To say that it can’t be done, I say to those, look at the clean energy entrepreneurs like A123, A Better Place, and the scores of 

new entrepreneurial companies that have begun this process of reinventing energy technologies and who are proving that, yes, it can. 

By charting this new path towards an energy-independent future, we will one day be able to tell OPEC that we don’t need their 

oil anymore than we need their sand. That is what this hearing is 

all about. 

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3 

The chair has completed his opening statement. We now turn to 

recognize the ranking minority member, the gentleman from Michigan, Mr. Upton. 

OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN 

Mr. UPTON. Thank you, Mr. Chairman. And I would like to welcome all of our witnesses here this morning, with a special welcome 

to Administrator Jackson. Ms. Jackson, we have many important 

issues before this subcommittee, and we would hope that this is not 

your last visit. We look forward to your testimony and interaction 

today. 

Before I begin, I would like to submit for the record the June 

2009 hearing testimony of Lion Oil. It is a small refiner with about 

1,200 employees. It is located in Arkansas. And from that testimony regarding the Waxman-Markey cap-and-trade legislation— 

which I would note is pretty much the same as the EPA regulations—‘‘will result in the shuttering of our refinery and the destruction of 1,200 jobs.’’ 

Yes, shuttering domestic refineries will not reduce our dependence on foreign oil. It will kill American jobs, while we import more 

refined oil products from countries with more lax environmental 

laws. EPA regulations that would result in the loss of domestic refineries would not extend to refineries in India, where we will be 

importing gasoline at, frankly, higher prices. We can remember the 

$4 gasoline in the past. These policies could send it even higher. 

I agree that we must take action to reduce America’s dependence 

on energy from unstable foreign governments and dictatorships, 

but we can do that by increasing domestic production of oil and 

natural gas, including recovering our vast oil shale reserves while 

promoting unconventional fuels such as coal-to-liquid technology. 

We need, simply, all of the above. We cannot enact or have EPA 

force costly job-killing climate change policy under the so-called 

umbrella of energy independence. 

I would agree that if we allow the EPA to take command and 

control of our economy that our oil imports will in fact decrease. 

But you know what else will decrease? American jobs. Raising the 

price of gasoline because of cap-and-trade by as much as perhaps 

70 cents a gallon, 77 cents a gallon, will indeed increase our consumption. 

We are seeing a trend to electrify the transportation sector, 

which I think is good, but electric cars have to plug into a baseload 

power source. The EPA is fighting a war on coal, where we get over 

50 percent of our power today. I would be interested in hearing the 

administration’s view on nuclear power, something that was not in 

cap-and-trade or, I believe, in the Administrator’s testimony this 

morning. 

It is a fact that EPA climate regulations or worldwide climate 

agreements thus far will not include China or India. As we suffer 

from double-digit unemployment, are we going to send simply more 

jobs abroad for no environmental benefit? Yet many in Congress 

and the administration continue to promote policies that will push 

gas and electricity prices even higher by foolishly blocking and creating disincentives for energy production here in North America. 

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They have also taken ill-conceived steps to block our government 

from using home-made fuel derived from coal and oil from our Nation’s closest ally and northern neighbor, Canada. The glaring consequence of no domestic energy production is greater dependence 

on foreign sources of energy, coupled with higher gasoline, oil, and 

natural gas and electricity prices. 

Our economy is in a tough time right now. And coming from 

Michigan, I know firsthand just how difficult things are for the 

folks at home. Rising energy prices will only exacerbate the economic problems that we are facing, and by law the EPA is prevented from taking economic considerations into account. I think 

that is wrong. 

Now, before I yield back, I would just like to raise another important issue with Administrator Jackson: coal combustion waste or 

coal ash. For 30 years, EPA has resisted subjecting CCW to Federal hazardous waste management regulations. Doing so now, I believe, would have serious economic and environmental consequences. Coal ash has been regulated in accordance with varying 

requirements and programs established by the States, and unwarranted hazardous designation will eliminate the environmental 

benefits of reusing coal ash and only force greater disposal in landfills. 

Recycling the ash falls right in line with our new green era of 

responsibility. Both the Green Building Initiative and the U.S. 

Green Building Council encourage using fly ash in concrete or 

products that contain recycled materials in green buildings. That 

benefit would be lost if somehow we saw regulation. So I would 

hope that perhaps you might be able to comment on that. 

At this point, I yield back the balance of my time. 

Mr. MARKEY. The gentleman’s time has expired. 

For the record, the Nuclear Energy Institute endorsed the Waxman-Markey bill. 

Let me turn and recognize the chairman of the full committee, 

the gentleman from California, Mr. Waxman. 

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mr. WAXMAN. Thank you very much, Mr. Chairman. 

The title for today’s hearing is on Clean Energy Policies that Reduce Our Dependence on Oil. Now, I think what we have seen in 

this country for decades is a view that we can’t do anything about 

this problem. We are just dependent on foreign oil to sustain our 

way of life, and that is it. There is not much we can do about it. 

Maybe drill a little bit more in the United States to get more domestic oil, but you can’t replace all that oil we are bringing in; so 

why try? 

In fact, the policies that we saw in the first part of this decade 

were exactly what the Republican President wanted. He had a Republican Congress, and therefore President Bush got through—energy policy—more than 95 percent of the policies he wanted. But 

what we accomplished in terms of dependence on foreign oil with 

regard to those policies, we were still on a trajectory to need more 

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5 

oil every year, year after year for as far as we could project into 

the future. 

It seems now that each year the amount of oil that we imported 

has been going up, up, and up and up, and that makes us more 

vulnerable, vulnerable to our national security being compromised. 

However, in the last few years Congress reversed its course. In, 

I guess it was 2007, and 2008, the Energy Independence and Security Act was adopted, and it increased the CAFE standard, which 

meant that cars had to be more efficient in the use of gasoline. The 

beginning of last year, we passed the Recovery Act, and in that law 

we invested in the technology and manufacturing capability to help 

bring plug-in electric vehicles to market beginning this year. In 

that law, we helped State and local governments replace their 

buses, trucks, and work vehicles with natural gas-powered vehicles, 

all the way from New York to Texas, from California to Maryland. 

So we have started to do things that have actually reduced our dependence on foreign oil. 

Today’s hearing will explore some of the real actions we have 

taken already to cut our Nation’s dependence on this oil. And I 

want to welcome Ms. Lisa Jackson to the committee. She is going 

to testify regarding clean energy policies that are being implemented by the EPA that are reducing our dependence on oil. 

Earlier this month, EPA finalized the historic rule establishing 

greenhouse gas tailpipe standards for cars and trucks. The EPA 

has produced strong but workable standards for tailpipe emissions, 

harmonized with standards from the National Highway Traffic 

Safety Administration. These standards will cut our oil dependence 

by 1.8 billion barrels of oil. It will draw on the development of new 

technology here in the U.S., and provide the U.S. auto industry 

with the certainty it desires. These standards do all this while saving American consumers $3,000 over the life of the vehicle. 

So what we have is a standard that is supported by the auto 

companies and auto workers, States, and the environmentalists. 

They are all on board. These policies are already making a difference for our Nation’s future. For the first time in decades, the 

Energy Information Administration no longer projects that the U.S. 

need for oil will increase year after year. We now expect that the 

U.S. will not need any more oil in 2030 than it did in 2007. This 

is a remarkable improvement for our energy security. 

There is still more work to do. Administrator Jackson will brief 

us on an important new EPA study that reveals the dramatic oil 

savings that are technically feasible and can be achieved through 

new energy policies. 

But the good news is that as we begin to solve the seemingly intractable problems of oil dependence, we also make progress on another seemingly intractable problem, the dangerous increase in our 

carbon pollution. 

This is what we stand for: strong, pragmatic, and effective policies that face the threats to our country and find sensible ways to 

resolve them. These are not partisan issues. They shouldn’t be 

looked at as partisan issues. But we did go down that partisan road 

in the early part of this decade, and that road took us to greater 

dependence and problems that we see as intractable, rather than 

problems that we are now looking at as problems that we can deal 

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6 

with. And we can, as a result, have a safer and more efficient and 

more better future for our environment as well as the economy of 

this Nation. 

Thank you, Mr. Chairman. 

Mr. MARKEY. The gentleman’s time has expired. 

The chair recognizes the gentleman from Kentucky, Mr. Whitfield. 

OPENING STATEMENT OF HON. ED WHITFIELD, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH OF KENTUCKY 

Mr. WHITFIELD. Thank you, Mr. Chairman. And I am glad we 

are having this hearing today on clean energy policies that will reduce our dependence on oil. I am pleased also that we have Environmental Protection Agency Administrator Lisa Jackson with us 

this morning. And anytime we talk about dependence on oil, one 

of the innovative actions we are trying to move to is electrification 

of our transportation system. And I want to talk about the importance of coal in meeting the electricity demands of our country. We 

know today that coal produces 51 percent, 52 percent of the electricity needs in this country. We know that the demand for electricity is going to increase dramatically over the next 20 years. And 

I have the clear impression that this administration and this EPA 

has a strong bias against coal. 

Now, why do I say that? Well, one, this endangerment finding 

that they are working on right now. We know and the EPA has admitted, itself, has acknowledged that the finding, the 

endangerment finding will cause job losses in the U.S., and I think 

that that represents a clear and present danger to our economy 

and all of our efforts to provide the conditions for job growth and 

prosperity. 

In addition to the endangerment finding, this EPA is limiting 

coal permits. This EPA is trying to designate coal ash as a hazardous material. This EPA, in my view, is trying to create as many 

obstacles as possible in using coal. And I can assure you that China 

is using more coal, India is using more coal, because they want to 

be competitive in the global marketplace, and we know that coal 

produces the least expensive electricity. 

Now, if we are going to provide additional incentives for solar 

power, wind power, I feel very strongly that those alternative 

sources are inefficient, too expensive, use too much land, and do 

not produce enough electricity and cannot produce enough electricity. And I would hope that this administration would spend 

more time, more money on helping us perfect carbon capture and 

sequestration. Dr. John Hauser at MIT is one of the leaders in this 

regard. He is working diligently with others to do this. And I think 

our long-term viability and strengthening our economy depends 

upon developing carbon capture and sequestration and continued 

use of coal. Thank you. 

Mr. MARKEY. The gentleman’s time has expired. 

The chair recognizes the gentleman from Michigan, the chairman 

emeritus of the committee, Mr. Dingell. 

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OPENING STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN 

Mr. DINGELL. Thank you, Mr. Chairman. 

The Democratic Congress and the Obama administration have 

done a tremendous amount to reduce our dependence on foreign oil. 

Our efforts began with the Energy Independence and Security Act, 

which was dealt with in this very committee and which continued 

with the American Recovery and Reinvestment Act, and the administration’s coordinated approach to deal with vehicle emissions, 

and, finally, the administration’s proposal for increased offshore 

drilling. 

After many years of predictions that our dependence on foreign 

oil would only create additional dependence on that oil, we are seeing a change in that trajectory. The news only gets better if we see 

the American Clean Energy and Security Act signed into law. 

I would like to take a moment to commend Administrator Jackson for her work leading to a single, harmonized standard for 

greenhouse gas emissions and fuel efficiency for autos. Prior to this 

landmark agreement, our auto makers faced a patchwork of standards that would have been very nearly impossible to meet. Now 

that we have a single national standard for model years 2012 to 

2016, it is time to begin the same approach for the post-2017 model 

years. The administration has been successful once, and I know 

that with effort, they can do the same thing again. 

As much as I disagreed with the Supreme Court in the case of 

Massachusetts versus EPA, the decision, although erroneous, was 

made. EPA was required to move forward with their endangerment 

finding, and they have done so. That endangerment finding is the 

legal underpinning for a national standard for autos. The national 

standard is too important to our manufacturers and to our economy 

for us even to consider a resolution of disapproval. 

Of course, it is important that we note that remarkable technologies are coming out of our auto makers. Whether we are talking about the Chevy Volt, the Ford Escape, and the Fusion hybrids, 

advanced transmission or advanced submission control technology, 

our auto makers are stepping up to the plate to provide consumers 

with quality, clean, and fuel-efficient technologies. GM is building 

the battery packs for the Chevy Volt in my district in Brownstown, 

Michigan, and Ford is doing the same thing at their Ypsilanti 

Township plant. We are busily creating 21st century jobs while we 

are protecting the environment. 

Mr. Chairman, I thank you again. And I look forward to our witnesses and their comments. 

Mr. MARKEY. The gentleman’s time has expired. 

The chair recognizes the gentleman from Texas, the ranking 

member of the full committee, Mr. Barton. 

OPENING STATEMENT OF HON. JOE BARTON, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. BARTON. Thank you, Chairman Markey. I want to thank you 

and Chairman Waxman for agreeing to hold this hearing and inviting Administrator Jackson. I want to thank you, Madam Adminismstockstill on DSK4VPTVN1PROD with 

8 

trator, for agreeing to come. I look forward to a productive exchange of ideas. 

Mr. Chairman, I think it is no secret that I don’t believe the 

endangerment finding that the Environmental Protection Agency 

put out in April has been properly done. 

I guess I would start with the premise that when I was born in 

1949, my life expectancy was 68 years old. My communications director and his wife had a baby girl last week; her life expectancy 

is 81. We are told by the Census Bureau that a baby born 10 years 

from now can expect or anticipate to live to 82. Neither of my 

grandfathers lived past the age of 67. My father died at the age of 

71. My mother is alive and well at the age of 85. 

So I don’t see as a basic premise how the Environmental Protection Agency can say that CO2 is an endangerment to the public 

health of the people of the United States when our life expectancy 

is going up, when the models that the endangerment finding are 

based on show no endangerment, even in their own models in the 

most extreme cases, until 200 years from now. It just doesn’t wash 

with me, Mr. Chairman. So I am going to be asking our distinguished Administrator a number of questions about that 

endangerment finding when it is my opportunity to do so. 

This endangerment finding, if implemented and backed up by all 

the regulations that the Environmental Protection Agency has indicated they plan to put upon the United States economy, would require rules to regulate CO2 from aircraft, from ocean-going vessels, 

nonroad engines and vehicles, all types of fuels, cement plants, petroleum refineries, nitric acid plants, utilities, oil and gas production, landfills, animal feed operations. It could be construed to even 

allow regulation of large public events where large numbers of people accumulate, such as the World Series, Super Bowl, Boston Red 

Sox at Fenway Park, because under the strictest interpretation of 

the Clean Air Act, enough CO2 is emitted in a large gathering to 

trigger the point-source standard for regulation. I know that is not 

the intention. I don’t think the EPA would do that. But it is technically possible. 

Our economy should be about economic jobs and growth, Mr. 

Chairman. Congress has an obligation to promote economic growth. 

This is the committee, the Energy and Commerce Committee, the 

oldest standing committee in the House of Representatives, that 

has the primary responsibility for authorizing legislation to create 

that economic growth. 

The Clean Air Act originated in this committee, as you know, Mr. 

Chairman. The senior members of this committee voted the last 

time on the reauthorization and amendments to the Clean Air Act 

early the 1990s under the leadership of then-Chairman John Dingell. I was a member of that committee at that time, and I voted 

for those amendments, Mr. Chairman. I think it was a good piece 

of legislation, and I have absolutely no qualms that I voted for it. 

Having said that, it is my opinion, and I think the record will 

bear this out, that the Clean Air Act was never intended to regulate CO2. CO2 is not a pollutant under the definition of that act. 

And the court case in Massachusetts versus EPA doesn’t say that 

CO2 is a pollutant. It doesn’t say that the Clean Air Act requires 

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that CO2 be regulated. It simply says that the Environmental Protection Agency has an obligation to make a decision. 

It is my opinion that they have made the wrong decision. It is 

my opinion that the endangerment finding is, in and of itself, a 

threat to the economic vitality of this country. And, as I said earlier, Mr. Chairman, when it is my opportunity to ask questions of 

our distinguished Administrator, I will be asking her a series of 

questions about that endangerment finding. 

With that, Mr. Chairman, I am very appreciative of the opportunity to participate in this hearing. I yield back the balance of my 

time, and look back to a productive hearing. 

[The prepared statement of Mr. Barton follows:] 

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Mr. MARKEY. The gentleman’s time has expired. 

The Chair recognizes the gentleman from Louisiana, Mr. Melancon. 

OPENING STATEMENT OF HON. CHARLIE MELANCON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF LOUISIANA 

Mr. MELANCON. Thank you, Mr. Chairman. I would like to take 

a moment, first of all, to recognize the families of the 11 victims 

that lost their lives in the deepwater rig last week and those that 

were injured. I am thankful for those that survived. Those men and 

women are doing what so many other men and women do in Louisiana every day, working hard to provide a better life for their 

families and produce resources for their country. Their sacrifice is 

immeasurable to those that love them. And so I ask everyone to remember the human face of this tragedy and to keep them and their 

families in your prayers. 

I also ask that we all keep in mind the safety of those brave responders and pray for their work, that it goes swiftly and without 

incident, as we continue to try and clean up after this horrible disaster. 

I would like to also call attention to the serious environmental 

and economic threat posed by the disaster. The oil slicks that are 

spreading from the rig site could have a detrimental impact on marine life along our fragile coast, and they must be properly contained. The marshes and estuaries that line the Louisiana coast, as 

well as the Mississippi coast, are home to the most productive fisheries in the country, if not the entire world, and host countless species of migratory birds throughout the year. Protecting these natural gifts and resources must be a priority for all of us. 

My remarks today will be short and simple. I thank the Chairman for holding this hearing and allowing us the chance to have 

this very important discussion. 

All of our lives are touched by the production of oil and petroleum products every day. Many of us traveled by car to be here 

today, and to communicate with each other, all of us will use a 

plastic pen or keyboard at some point today. There is no doubt oil 

and its byproducts play an important role in our country’s history 

and economic development. I think our committee and our caucus 

should be proud of the forward-thinking energy policies that have 

been put in place. But I would be remiss if I didn’t point out the 

continuing importance of oil and petroleum products in our economy. 

The good-paying jobs and the affordable energy and chemical 

products drive our economy day in and day out. It is impossible to 

know exactly what the future looks like, but I think it is important 

today to focus on priorities, our national security, and strengthening the economy. 

I think we should be talking about energy independence. Producing energy from our homegrown assets, all of them, not just 

some of them, makes us less reliant on hostile nations and promotes American ingenuity. For example, we shouldn’t have to buy 

all of our patented solar equipment from foreign manufacturers. 

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In Louisiana, we have proudly produced oil and gas for generations, constantly innovating and evolving the way we explore and 

extract. As I recognized at the beginning of my statement, there 

are real costs associated with production. But our State has selflessly carried on this work to ensure that the rest of the country 

can have some reasonable stability in energy prices and availability. We will continue to do this work and will lead the way 

until energy security becomes a reality for our country. 

In conclusion, I wish to request again that Administrator Jackson and her Agency continue to carefully review the science associated with requiring refineries to blend E–15 in their stock. It is estimated that in just a few short years, every gallon of gasoline sold 

in the United States will be at least blended to E–10 levels. This 

blend wall, as it is called, means that refiners will no longer be 

able to comply with the renewable fuel standard as established by 

law. I ask that the Administrator use her authority to reduce the 

blending requirements rather than force refiners to blend higher 

levels of ethanol in their commercial-grade gasoline. This move 

could have serious consequences, such as voiding some car and 

green engine warranties, which in turn lead to costly legal liability 

battles. Also, the high organic content of E–15 is known to increase 

the nitrogen and sulfur oxide, the nox and sox, emissions. 

Biofuels represent a strong part of the solution to our domestic 

energy needs, but balancing those needs with the impact on our existing economy is critical, and I thank the Administrator for giving 

this due consideration. And I again thank the Chairman for his 

time. 

Mr. MARKEY. The gentleman’s time has expired. 

The chair recognizes the gentleman from Illinois, Mr. Shimkus. 

OPENING STATEMENT OF HON. JOHN SHIMKUS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

Mr. SHIMKUS. Thank you, Mr. Chairman. 

And Administrator Jackson, welcome. We had a chance to visit 

about a year ago at the Illinois delegation luncheon, and I offered 

my assistance on an energy security approach that I think would 

meet some of your goals and objectives. I still offer that and look 

forward to working with you when you take me up on that offer. 

I am glad I followed my friend, Charlie Melancon, because you 

have a competing view on what we have done on renewable fuels, 

and I am going to use the opening statement to just pose a series 

of questions and talk about this, because I obviously have another 

issue I want to talk to once we get the questions. 

According to you, 65 percent of the gasoline in the United States 

is consumed by 2001 vehicles or newer. It has been widely reported 

that you are considering partially approving E–15 for 2001 model 

cars and newer, which I support. But there is a concern with this 

in that splitting the automobile population on an improved blend 

versus addressing the entire fleet—because you look at the capital 

expense that would be incurred—I think it is safe to say that many 

people would not do the expansion that is needed in infrastructure 

if you are only going to be able to address 65 percent of the fleet. 

So I will have a written question to ask for comments on that, and 

I think that is an issue that needs to be considered. 

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The U.S. imports roughly 65 percent of petroleum today. This is 

an energy security hearing. Ethanol currently is about 8.4 percent 

of the gasoline pool. It is the only thing we have done to decrease 

our reliance on imported crude oil, and it has had great success. 

And we have displaced 12 billion gallons of imported crude oil by 

using renewable fuels. 

Now, the interesting thing is that, because of the blend wall, we 

are producing ethanol and we are exporting it overseas. So if we 

want to continue to decrease our reliance on imported crude oil, 

why would we have an arbitrary limit that now forces us to export 

the ethanol, versus continuing to use the ethanol to decrease our 

reliance on imported crude oil? We are exporting to India, South 

Korea, and the EU, while we are still importing oil from Venezuela. 

This seems counterproductive. 

And I know that is why we are pushing, and I do appreciate your 

looking at the E–15. But that is also a reason why we think that 

looking at E–11 or E–12 for the entire fleet versus this bifurcation 

aspect of the 2001 vehicles and above might be an even more credible solution to addressing and decreasing our reliance on imported 

crude oil. It is good for the country, it is good for our energy security, it is good for farm income, it is good for rural America, it is 

good for jobs. 

And I thank the chairman, and I yield back the balance of my 

time. 

Mr. MARKEY. The gentleman’s time has expired. The chair recognizes the gentlelady from California, Ms. Matsui. 

OPENING STATEMENT OF HON. DORIS O. MATSUI, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Ms. MATSUI. Thank you, Mr. Chairman, for calling today’s hearing. I would also like to thank Administrator Jackson and the rest 

of the witnesses for appearing before us today. 

I commend the EPA for establishing a greenhouse emissions 

standard for cars and light trucks, and for finalizing a renewable 

fuels standard, which, as Administrator Jackson rightly points out 

in her testimony, are inextricably linked to reducing our dependence on oil and cutting emissions of greenhouse gas. 

As we all know, oil provides more than 40 percent of all energy 

consumed and 97 percent of the energy used for transportation. 

However, it is crucial that we advance policies that lessen our carbon footprint, curtail harmful emissions, create jobs, and safeguard 

the physical and energy security of our Nation. In doing so, we will 

preserve and even improve upon our current way of life. 

To become less reliant on fossil fuels, Americans must embrace 

clean technology, clean fuels, and new ways to cut emissions. If we 

succeed in doing that, we will improve our manufacturing base and 

regain our competitive advantage in the global economy. 

Toward that end, I recently convened a clean technology regional 

summit in Sacramento and brought together clean-tech companies, 

nonprofits, utilities, colleges, and businesses to discuss ways in 

which they are fostering cooperative relationships and strategic 

partnerships to deepen the region’s ongoing efforts to become a 

clean-tech capital. 

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On top of Sacramento’s leadership as an environmental and metropolitan planning model for the State of California, this summit 

demonstrated the region’s vision to achieving greater energy dependence. 

Our Nation must also aspire to be the world leader in producing 

and exporting clean technology, and the President has repeatedly 

expressed this goal. Unfortunately, the United States still lags behind many of our international competitors in expanding our cleantech industry, particularly in exports abroad. 

Just yesterday, I, along with Representatives Rush, Dingell, and 

Eshoo, introduced legislation, H.R. 5156, the Clean Energy Technology Manufacturing and Export Assistance Act, that would provide domestic manufacturing and foreign export assistance to boost 

the competitiveness of the U.S. clean-tech industry here at home 

and in the international marketplace. 

It is critical that our Nation become the leader in manufacturing 

and exporting clean technologies, not one that becomes increasingly 

dependent on foreign energy products. This legislation will enhance 

our standing in the clean energy race. 

I look forward to working closely with my colleagues, stakeholders, and other advocates to move the United States towards a 

more efficient energy economy that utilizes clean-tech manufacturing and lessens our dependence on the oil. 

I yield back the balance of my time. 

Mr. MARKEY. The gentlelady’s time has expired. 

The chair recognizes the gentleman from Pennsylvania, Mr. 

Pitts. 

OPENING STATEMENT OF HON. JOSEPH R. PITTS, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH 

OF PENNSYLVANIA 

Mr. PITTS. Thank you, Mr. Chairman. I would like to thank you 

for convening the hearing today on such an important issue. 

Like all of us, I believe that we should work to decrease the 

amount of greenhouse gas emissions in our atmosphere and we 

should be good stewards of this Earth and its resources. In addition, I think it is imperative that the United States become increasingly energy independent. The United States needs to produce far 

more clean energy from sources that do not rely on the whims of 

unfriendly nations in far-off regions of the world. 

Fundamentally, cutting carbon emissions through punishment, 

taxation, and the heavy hand of big government will only cripple 

our economy and send more jobs overseas; and I fear recent EPA 

actions and the enactment of cap-and-trade legislation would do 

just that. 

Instead, we should be encouraging a clean energy economy 

through innovation and encouragement and entrepreneurship. If 

we want to reduce our dependence on oil, I strongly believe that 

our clean and green energy future is a nuclear future. And with 

this goal in mind, I have introduced the SAFE Nuclear Act which 

stands for Streamline America’s Future Energy. The bill provides 

for a regulatory process that will encourage an increase in the production of this clean alternative energy. 

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Nuclear energy is a viable, clean alternative that can help 

strengthen America’s energy infrastructure. Now, nuclear power 

can reduce our dependence on foreign sources of energy and reduce 

the emissions that come from burning fossil fuels. And my bill 

would provide an additional path in the regulatory process that allows for the approval of new nuclear reactors on or adjacent to an 

existing site without jeopardizing safety. 

Though we may not all agree on issues like cap-and-trade and 

EPA actions, we can all agree that we need to find a way to 

produce the energy that fuels our lives in a way that is environmentally friendly and sustainable. Nuclear power fits that description, and the SAFE Nuclear Act will go a long way toward making 

that safe, clean future a reality. I thank you for the time and yield 

back. 

Mr. MARKEY. The gentleman’s time has expired. 

The chair recognizes the gentleman from Texas, Mr. Green. 

OPENING STATEMENT OF HON. GENE GREEN, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. GREEN. Thank you, Mr. Chairman, for holding the hearing 

today on the clean energy policies that reduce our dependence on 

oil. And I would also like to welcome Administrator Jackson and 

the other panelists to our committee this morning. 

Coming from Texas, we are the Nation’s leader in renewable energy production and the pioneering and developing of its own State 

portfolio standard. I support efforts to promote renewable energy 

production that meets the unique circumstances and resources of 

each State. However, with increases in renewable energy, the Energy Information Administration found that oil and natural gas 

and coal will continue to make up a large majority of U.S. energy 

use, even to 2030 and beyond. 

If we are to reduce dependence on foreign oil, we must explore 

and produce more domestically, along with all our alternatives that 

we are investing in. We cannot drill our way out of our energy 

needs, but we cannot ignore the benefits that America gains with 

responsible domestic production. These benefits include reduced reliance on foreign imports, increased economic growth, new highpaying jobs, additional Federal and State revenues, and improved 

ability to meet our clean energy goals. That is why I strongly support increasing diversifying domestic production in the areas like 

Alaska’s North Slope, the Gulf of Mexico, Federal lands in the West 

and the Outer Continental Shelf. 

I also supported the efforts to raise fuel economy standards in vehicles, to provide tax incentives for consumers to purchase fuel-efficient vehicles, extend tax incentives for renewable energy, increase 

energy efficiency standards for buildings and appliances, and promote public transit efforts. Several of these initiatives are part of 

last year’s Recovery Act and the Energy Independent Security Act 

of 2007. They are working well. I will continue to support programs 

seeking to create cleaner energy technologies, because we all benefit from a cleaner environment. 

Finally, while I have you here, Administrator Jackson, I appreciate the working relationship that we have, but also applaud the 

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try with one national program for fuel economy and greenhouse gas 

emissions, which was supported by the States, environmental advocacy groups, and the auto industry. 

And I would be remiss if I didn’t also mention the work we are 

doing with EPA on the Superfund site that is in our district in East 

Harris County that our regional EPA is moving very fast to try to 

contain a problem that has been there for 40 years. I know this is 

not an easy feat. However, I want to emphasize my opposition to 

the EPA regulating greenhouse gases from large stationary sources 

under the endangerment finding. It is my hope that Congress will 

send the President legislation to set parameters to help regulate 

emissions with minimal disruption to our economy. 

And, Mr. Chairman, again, thank you for calling this hearing. I 

yield back the balance of my time. 

Mr. MARKEY. The gentleman’s time has expired. 

The chair recognizes the gentleman from Texas, Mr. Burgess. 

Mr. BURGESS. Thank you, Mr. Chairman. I appreciate the Administrator being here. It is so rare we have anyone from the administration come to our committee. I will save my time for questions, and I yield back. 

Mr. MARKEY. We thank the gentleman very much. 

The Administrator has been before our committee before. And I 

would just note that the Administrator of the EPA did not appear 

before our committee from 2001 to 2006, when the minority was 

then in the majority. So that was, without question, an unprecedented period of time without having the EPA Administrator appear before the committee of jurisdiction. That cannot be said 

about this Administrator. That was the most successful witness 

protection program in history. 

Let me now turn and recognize the gentlelady from California, 

Mrs. Capps. 

OPENING STATEMENT OF HON. LOIS CAPPS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mrs. CAPPS. Thank you, Mr. Chairman, for holding today’s hearing; especially welcome again to the Administrator of the EPA. And 

I want to associate myself as well with the remarks of my colleague 

Mr. Melancon regarding the tragedy off the coast of Louisiana. 

Today our economy relies on fossil fuels for energy, and every 

day we pay a price, many prices. And volatile prices starts instability and unnecessary pollution. We simply must change this untenable situation. The best way to beat this addiction is to reduce 

overall demand, promote renewables, and develop alternatives. 

Putting more attention on the potential of clean energy is something that I and others on this side of the aisle have been advocating for years. And since America is not exactly awash in natural 

oil and gas, reducing our dependence on them would be good not 

only for our environment but for our economy and perhaps, most 

importantly, for national security. 

But, to be honest, we have to do more than talk about the potential that renewables and alternative energy has for this country. 

We have to put into place more funding for programs to bring these 

energy sources to market, and we have to make changes in energy 

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policy to encourage their use. That is exactly what Democrats have 

done in the last 3 years. 

We have enacted legislation, the Energy Independence and Security Act, and the Recovery Act, to provide an immediate jolt to the 

clean energy economy to create jobs and enhance our long-term 

competitiveness by reducing our oil dependence. At the same time, 

the House has passed legislation to establish a cap-and-trade system for global warming pollution. This bill has the potential to provide trillions of dollars in revenue that could be used, among other 

things, to provide money for investment in clean energy and tax relief for American families facing economic hardship. 

Mr. Chairman, we know what we need to do: Accelerate our economic recovery in the short term, ensure our long-term prosperity. 

Developing clean power and energy-efficient technologies while 

combating global warming are initiatives that meet these goals. 

Americans want real, meaningful solutions to our Nation’s energy challenges. Unfortunately, the leadership under the last administration was driven by a fuel desire to drill our way toward energy independence, and did that by lavishing huge tax breaks on 

big oil, paying much less attention to reducing demand, renewables, and alternative energy. Their great plan, 95 percent implemented, resulted in volatile energy prices, $500 billion in oil company profits, and an economy on the brink of collapse. Those of us 

who opposed the Bush-Cheney plan did so because we knew this 

was the likely result. 

We do have a better idea, one that meets today’s crisis and transitions us to a new future. It is time to put taxpayer funds to a 

more productive use, jump-start investments of energy efficiency, 

renewables, alternative energy, all of which will reduce our oil dependence. 

Mr. Chairman, this issue will be the defining measure of our future economic standing and our international security over the next 

century. I believe we should all take this opportunity to work together to achieve this energy independence for our country. 

Thank you. And I yield back the balance of my time. 

Mr. MARKEY. The gentlelady’s time has expired. 

The chair recognizes the gentleman from Alabama, Mr. Griffith. 

Mr. GRIFFITH. Mr. Chairman, I will waive my opening statement 

and reserve my time. 

Mr. MARKEY. The gentleman will be able to reserve his time. 

The chair recognizes the gentleman from Florida, Mr. Stearns. 

OPENING STATEMENT OF HON. CLIFF STEARNS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF FLORIDA 

Mr. STEARNS. Mr. Chairman, thank you. 

The endangerment finding that many of us feel was rushed into 

existence by the EPA really has many of us concerned about what 

the economic impact of this would be. It allows, of course, the EPA 

to impose the first ever Federal tailpipe standards for greenhouse 

gases. That is estimated to cost about $52 billion and require the 

largest industrial sources to install the best available control technology. I mean, that term itself, ‘‘the best available control technology,’’ I don’t think Administrator Jackson, have you yet defined 

what this means and whether it is available? 

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When you look at the impact of this, it is not going to affect just 

the auto industry and large industrial sources; you are going to 

regulate greenhouse emissions from aircraft, ocean-going vessels, 

nonroad engines and vehicle sources, cement plants, fuels, petroleum refineries, utility boilers, oil and gas production, landfills, and 

even animal feed operations. 

So, since 85 percent of the U.S. economy runs on fossil fuels that 

emit carbon dioxide, imposing a CO2 tax is equivalent to placing an 

economy-wide tax on energy use. I think that is what many, at 

least on this side of the aisle, are concerned about, the economic 

impact. 

Now, according to the Heritage Foundation Center for Data 

Analysis, the economic effects of carbon dioxide regulation would 

result in cumulative gross domestic product losses—and these are 

their figures—of $7 trillion by the year 2029, and single-year GDP 

losses exceeding $600 billion. 

So when you think about the impact of this, with a weak economy, with high unemployment, I think that has many of us concerned. It hit particularly hard on manufacturing, which manufacturing provides the better jobs. And so job losses in some industries 

could exceed 50 percent with this. 

So I think, regardless of what one’s view might be on carbon dioxide and global warming, I think perhaps both sides of the aisle 

can agree that this would have huge economic impact. And companies obviously will innovate and try to work through this, but are 

they going to make long-term capital investments, waiting to see 

what the Administrator is going to do? 

And so when the EPA uses such language as ‘‘best available control technology,’’ if I was to invest in, let’s say, a cement plant or 

I was going to do something in oil and gas production, or I was 

going to do something in aircraft or even animal feed operations, 

I would want to know what your regulations are going to be and 

how am I going to be impacted, before I invest a lot of my money. 

So I think you have put sort of a pale over the economy with 

this. And I think we need to, through this subcommittee, Mr. 

Chairman, work with commonsense energy solutions that will encourage domestic energy production and create jobs, and be careful 

of instituting this endangerment finding. 

Thank you, Mr. Chairman. 

Mr. MARKEY. The gentleman’s time that has expired. 

The chair recognize the gentleman from New York, Mr. Engel. 

OPENING STATEMENT OF HON. ELIOT L. ENGEL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW 

YORK 

Mr. ENGEL. Thank you, very much, Mr. Chairman. I want to 

thank you for holding this important hearing and our witnesses for 

contributing their expert testimony. I look forward to hearing Ms. 

Jackson’s testimony. 

We all know that we must break our addiction to oil. It has 

weakened our economy, it has transformed our wealth into nations 

and individuals who wish us harm, placed our troops in dangerous 

places, and damaged our environment. The U.S. consumes 25 percent of the world’s oil production, yet controls less than 3 percent 

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of an increasingly tight supply. Three-quarters of world’s reserves 

are in OPEC Nations and in 2008 the U.S. sent roughly $440 billion overseas to pay for imported oil. 

These economic and national security problems are enabled by 

the simple fact that oil provides more than 96 percent of the fuel 

for our transportation sector. It is really a transfer of wealth. Unless we act now the problem will continue to worsen. 

We should be doing the following: First, we should continue to 

increase the efficiency of our cars and trucks. Making fuel economy 

improvements in our existing vehicles will not break our addiction 

to foreign oil, but it will reduce our overall consumption. 

Secondly, we must force petroleum to compete with other fuels. 

There are many ways to do this and we should use them all. T. 

Boone Pickens has recommended switching to natural gas for fleet 

vehicles such as buses and taxis and for interstate trucking. These 

vehicles can run on natural gas and would only require new pumps 

at a few central locations and interstate truck stops. We should deploy drop-in fuels produced from waste and algae. These fuels can 

mix freely gasoline and diesel in existing vehicles. 

We should enact an open fuel standard that would require all 

new gasoline using vehicles to be flex-fuel vehicles, capable of running on gasoline, ethanol or methanol. I argued when we passed 

our global warming bill that that should have been in the bill, and 

it should have been and hopefully it will be when we get to a finished product. This cheap and simple modification uses technology 

that already exists. Brazil accomplished it easily several years ago. 

Methanol made from natural gas can be produced for around $1.20 

a gallon of gasoline equivalent today. 

Thirdly, we should move to electrify automotive transportation. 

I have worked with my friends at Better Place several years now 

and I am eager to hear about their progress from Mr. Wolf on the 

second panel today. 

Basically we need to have a more balanced energy policy and a 

policy that relies so heavily on gas, on gasoline, is not one that can 

be sustained. We can really never be totally free with our national 

security as long as we rely on despots like Hugo Chavez or the 

Saudi royal family for our energy supplies. We need to move and 

we need to do it quickly. 

Thank you, Mr. Chairman. 

Mr. MARKEY. The gentleman’s time has expired. 

The chair recognizes the gentleman from Arizona, Mr. Shadegg. 

OPENING STATEMENT OF HON. JOHN B. SHADEGG, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ARIZONA 

Mr. SHADEGG. Thank you, Mr. Chairman. And I will try to keep 

my remarks brief. I want to associate my comments first with Mr. 

Melancon. I believe it is in America’s interest to pursue all energy 

sources and particularly to appreciate the domestic energy we have 

produced, including oil, natural gas, and other sources of energy as 

well as coal. 

I am concerned about the topic that my colleague Mr. Shimkus 

raised, and that is the issue of increasing the ethanol blend. I have 

introduced legislation to require that no increase in ethanol be permitted until the safety of ethanol is studied in certain pieces of 

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power equipment. I think that is a legitimate concern. There is a 

very real danger of that when ethanol blends go above 10 percent, 

we do not know what impact they will have on the safety of 

chainsaws and other pieces of equipment or on the reliability of 

many small motors, including outboard motors and marine engines, 

and it would be particularly unfair if we moved to those new blend 

standards and the cost of doing so is imposed on the American public either financially or in terms of safety risk because the equipment was not designed to run on those fuels. 

I do commend the EPA for its work, but I disagree with its 

endangerment finding. I believe it is based largely on the IPCC report, which was the result of almost 2 decades worth of research; 

however, tragically that research has now been very much placed 

in doubt. The IPCC report daily is criticized for new errors in its 

findings. It is found to have exaggerated the sea level rise in Bangladesh due to climate change because it failed to take into account 

sediment from the Himalayan rivers, it based claims on African 

crop year that were not peer reviewed, it erroneously claimed that 

the Himalayan glaciers might melt by 2035, it based claims on 

drought in the Amazon forest in a report that did not even study 

drought, and it also used as a basis for temperature predictions apparently data that does not even exist. 

Most recently, a study found that 21 of 44 chapters of the IPCC 

report would receive an F if graded on the grading system used in 

American schools because the papers relied upon and included 

newspaper clippings, newsletters, and press releases and not peer 

reviewed literature. 

It seems to me, and I will conclude with this, that when a nation 

decides to pursue massive public policy on the scale that we are 

talking about, it is absolutely critical for us to have the support of 

the American public behind us and not to impose very costly regulations on the economy that could cost jobs and damage our citizens 

without being sure that the science is right. 

And so I would simply urge that we continue to look carefully at 

the science, that if we decide to draw a policy based on that science 

that we in fact can assure ourselves and can rely confidently on it 

being accurate and reliable so that we can win the support of the 

people. They do not want to see us enact legislation based on political will and not based on sound science. 

With that, Mr. Chairman, I yield back. 

Mr. MARKEY. The gentleman’s time has expired. 

The chair recognizes the gentleman from New Jersey, Mr. Pallone. 

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY 

Mr. PALLONE. Thank you, Chairman Markey, for having this important hearing and I am excited to have our EPA Commissioner 

Lisa Jackson here with us this morning. I have known Lisa from 

her days as Commissioner of the New Jersey Department of Environmental Protection and she has dedicated her life’s work to protecting the environment and making our country a healthier place 

to live, and I want to welcome her here today to testify. 

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I also want to mention, I know you mentioned about her being 

available, I remember very early in her tenure when she invited us 

down on the TSCA reform meeting, a bipartisan meeting. I think 

it was the first time I had ever been in the EPA Administrator’s 

office in my 22 years here. So she is definitely trying to reach out 

on a bipartisan basis, and I appreciate that. 

Now we are here today to discuss the importance of developing 

clean energy policies that could reduce our dependence on oil. The 

U.S. Consumes 25 percent of the world’s oil production but our 

country only contains 2 percent of the world’s oil reserves. We 

waste a billion dollars a day buying foreign oil, and this money all 

to often winds up in the pockets of nations with hostile views of 

the United States. This hurts our economy, helps our enemies and 

puts our security at risk. 

We must put an end to our addiction to oil, and the best way to 

do this is to pursue aggressive clean energy policies with all the 

tools we have available. And this includes enacting a comprehensive climate change bill into law this year and allowing our Federal 

agencies such as the EPA to use their authority to regulate emissions and incentivize clean energy development. 

We must focus on clean energy policy such as wind power and 

regulation of global warming emissions rather than expanded offshore drilling that can cause tremendous harm to our environment. 

I am extremely troubled by the offshore oil rig which caught fire 

and ultimately sank off the coast of Louisiana last week. This is 

turning out to be one of the world’s worst oil spills. And it is clear 

that offshore drilling cannot be done in a way that sufficiently protects America’s coasts. 

And I respectfully request that the President and the Interior 

Secretary reassess their position on offshore oil. This disaster in 

the Gulf of Mexico only underscores the need for comprehensive 

clean energy policy. We must focus our efforts on wind and hydro 

power, which are some of the cleanest and safest forms of renewable energy. 

I want to commend the EPA and Administrator Jackson for all 

the work that they are doing to regulate vehicle emissions and stationary power sources through the endangerment finding. This 

plan will save the U.S. 1.8 billion barrels of oil over the life the vehicles purchased between 2012 and 2016. 

Once again I would like to thank the chairman for convening this 

hearing, especially for inviting the Administrator Lisa Jackson, 

who again has been out front on so many of these issues and you 

look forward to her testimony, thank you. 

Mr. MARKEY. Great. The gentleman’s time has expired. 

The chair recognizes the gentleman from Louisiana, Mr. Scalise. 

OPENING STATEMENT OF HON. STEVE SCALISE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF LOUISIANA 

Mr. SCALISE. Thank you, Mr. Chairman. I share the sentiments 

of my colleague from Louisiana. Our prayers are with those families of the 11 rig workers who lost their lives. I urge the U.S. Coast 

Guard to move swiftly and use everything in their power to contain 

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and clean up the spill and investigate the causes of the explosion 

so we can prevent this terrible tragedy from happening again. 

As we hear today from Administrator Jackson, I would hope that 

we have an opportunity to discuss the administration’s plans for 

creating a national energy policy as well as the effects that many 

of the recent EPA restrictions would place on our country’s economic and national security. 

I have long advocated for a comprehensive national energy policy 

that takes an all-of-the-above approach, incorporating efficiency 

measures, promotion of new energy technologies, development of 

renewable energies, and also making sure that we continue to expand our development of our own natural resources at home. 

This administration, however, has taken a different approach 

with restrictive energy policies. Unfortunately, we have seen attempt after attempt by this administration to restrict our ability to 

invest in our own natural resources. From recent threats by EPA 

to regulate greenhouse gas emissions to essentially halting the 

major development of natural gas with restrictions on hydraulic 

fracturing, what we are seeing is a recipe for making our country 

more dependent on Middle Eastern oil while killing off millions of 

American jobs. 

Before this administration places severe and economically devastating restrictions on domestic production of our own natural resources, it is incumbent to find ways to reduce our dependence on 

Middle Eastern oil. About 57 percent of the petroleum we use in 

America comes from foreign sources, and roughly 20 percent of 

those imports are from Middle Eastern countries. This not only restricts our ability to one day become energy independent, but also 

poses potential national security threats to our homeland. 

Instead of Washington bureaucrats mandating harmful policies 

that would kill key sectors of our national economy and make us 

more dependent on foreign nations who want to do us harm, we 

should instead explore policies that encourage investments in 

cleaner energy technologies and innovation in the private sector. 

The ingenuity of the American entrepreneurial spirit is what has 

made our country the best in the world. This Congress would be 

wise to encourage more of that innovation to achieve energy independence. 

Thank you, and I yield back. 

Mr. MARKEY. The gentleman’s time has expired. 

The chair recognizes the gentleman from Washington State, Mr. 

Inslee. 

OPENING STATEMENT OF HON. JAY INSLEE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WASHINGTON 

Mr. INSLEE. Thank you, it is an honor after the 40th anniversary 

of Earth Day to have a director of the Environmental Protection 

Agency here, and I just noted that we are kind of back to where 

we started, because the EPA got started when the Cuyahoga River 

caught fire in Ohio and people understood we had to do something 

about our problem. And this morning the headlines are the Coast 

Guard are thinking about lighting the Gulf of Mexico on fire to try 

to solve this problem. We are really back where we started. 

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I want to point out that the oil slick that we are concerned about 

today is really the least of our problems about oil. Because there 

is a giant invisible oil slick caused by carbon dioxide that comes out 

of our tailpipes, that goes in the atmosphere, that falls in the 

oceans and goes into solution. That invisible oil slick is now causing the oceans to become acidic. The oceans today are 30 percent 

more acid, more acidic than they were before we started burning 

oil. And they will be much more acidic if we don’t change our 

course. 

I want to show members if the committee what that means. If 

they put up this slide over here. This slide over here shows what 

happens when the ocean becomes acidic. When the ocean has more 

acid in it the creatures in it that take calcium carbonate out of the 

ocean and make their bodies can’t do that anymore. This is a picture from NOAA and it shows a terrapod. These are small little 

plankton-like creatures and they had a shell and that shell, they 

get the calcium out of the water to make their shell. The problem 

is as the water becomes more acidic they can not make that shell 

anymore. This is a picture of what happens when you put a 

terrapod in water that is as acidic as it will be in 2100 if we continue on this path, and basically what you will see over a period 

of 45 days it melts. On the left you see the shell is intact, it starts 

to melt and it basically melts into an indistinguishable blob in 45 

days. The entire food chains of the ocean are in danger because of 

the oil and coal, because they are making our oceans more acidic. 

And the scientific community believes there may not be healthy 

corals anywhere in the world by the end of the next century because of this acidic problem. 

So the oil slick we are worried about today is the least of our 

problems. The fact that our oceans may be dead in 100 years or full 

of weeds rather than beautiful corals is a significant issue why we 

should be addressing this. Basically what the scientists are telling 

us, unless we have a sea change in energy policy we may be killing 

the seas. 

So I think this hearing is an appropriate one to have. We know 

about the national security ramifications of giving $100 million a 

day to Iran of American money, but we have another security and 

that is the protein we get out of the seas, and I hope that we can 

come up with a policy on comprehensive basis to solve this problem. 

Thank you. 

Mr. MARKEY. The gentleman’s time has expired. 

The chair recognizes the gentlelady from California, Mrs. Bono 

Mack. 

Mrs. BONO MACK. Thank you, Mr. Chairman. I will waive and 

submit my statement for the record. 

Mr. MARKEY. The gentlelady waives. 

The gentleman from an Oklahoma, Mr. Sullivan, is recognized. 

OPENING STATEMENT OF HON. JOHN SULLIVAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OKLAHOMA 

Mr. SULLIVAN. Thank you, Chairman Markey. I appreciate you 

holding this hearing today on clean energy policies that reduce our 

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dependence on oil. I am pleased to welcome Lisa Jackson, Administrator of the EPA, today. I look forward to her testimony and any 

developments on the foreseeable economic impacts that EPA CO2

endangerment findings and pending regulations will have on the 

U.S. economy. 

If allowed to go into affect, the CO2 endangerment finding will 

impose a backdoor energy tax on the American people. By giving 

the agency unprecedented regulatory authority over almost every 

foreseeable aspect of our economy, burdening thousands of small 

businesses with unnecessary and costly compliance expenses and 

higher energy costs for American families while doing little to protect the environment. 

With our national unemployment rate at 10 percent, this is the 

worst possible time for this administration and the EPA to impose 

unnecessary job killing energy mandates on the American people. 

I am also interested in our witnesses’ views on our own domestic 

oil resources and if they support the development of them, both on 

shore and off, to reduce dependence on foreign oil imports. According to the Congressional Research Service, the U.S. reserves for oil 

and natural gas are the largest in the world. I believe we must reduce foreign oil imports and start drilling and utilizing our oil and 

gas here at home. 

I look forward to the hearing, hearing the testimony of our witness, and I yield back the balance of my time. 

Mr. MARKEY. The gentleman’s time has expired. 

The chair regular nieces the from a from California, Mr. McNerney. 

OPENING STATEMENT OF HON. JERRY MCNERNEY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mr. MCNERNEY. Thank you, Mr. Chairman, for convening today’s 

hearing. It was almost a year ago that our committee favorably reported the America Clean Energy and Security Act, and I am 

grateful for this opportunity to evaluate the new policy proposals. 

Vigorously pursuing well crafted, clean energy policies is a matter 

of national security, economic and environmental concern. Investing in new energy technologies and energy efficiency improvements 

has tremendous potential to create high quality jobs, and I have 

seen this job creation potential firsthand through my experience in 

developing wind power and smart grid technologies. 

Even during tough economic times communities in my district in 

California are attracting cutting edge clean energy businesses that 

are creating good jobs. For example, an electric vehicle manufacturing facility just opened up in Stockton, California and is hiring 

new workers. Similarly, the Port of Stockton is doing significant 

business with wind turbine parts, creating jobs at our docks. There 

are tremendous opportunities for further job growth in the clean 

energy sector, but to harness that potential we need to continue to 

evaluate and recalibrate Federal policies. 

I would also like to note the compelling national security benefits 

of pursuing policies to expand America’s use of domestically produced energy resources. Over the last 2 years our country has 

spent about a billion dollars a day overseas for oil imports, some 

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30 

of which will flow to countries that are unfriendly to our interests. 

Comprehensive international action to invest in clean energy resources would prevent millions of dollars a day from flowing to 

Iran. Clearly we have a compelling security interest in aggressively 

pursuing energy independence. 

Mr. Chairman, I thank you again for convening today’s hearing 

and look forward to hearing from our witnesses. 

Mr. MARKEY. The gentleman’s time has expired. 

The chair recognizes the gentleman from Pennsylvania, Mr. 

Doyle. 

Mr. DOYLE. I am waiving. 

Mr. MARKEY. The gentleman will waive. His testimony will be 

added to the question period. 

The chair does not see any other members seeking recognition at 

this time. 

Mr. UPTON. Mr. Chairman, I just might ask unanimous consent 

for those members who are not here that they might be able to put 

a statement into the record. 

Mr. MARKEY. Without objection, so ordered. 

We will now turn to our witness and while also making—before 

that I will make a unanimous consent request that Mr. Latta and 

Mr. Murphy, both members of the full committee but not on the 

subcommittee, have asked for permission to participate in the witness questioning after each member of the subcommittee has completed their questioning. Without objection, so ordered. 

Let’s turn to our extremely distinguished witness, and we thank 

her for coming back to the Energy and Commerce Committee. She 

is EPA Administrator Lisa Jackson. Before becoming EPA’s Administrator, she served as Chief of Staff to the Governor of New Jersey 

and Commissioner of the State of New Jersey’s Department of Environmental Protection. Ms. Jackson is a summa cum laude graduate of Tulane University in Louisiana and earned a Master’s degree in chemical engineering from Princeton University. 

We are delighted to welcome you back to the committee, Administrator Jackson. Whenever you feel comfortable, please begin. 

STATEMENT OF THE HON. LISA P. JACKSON, ADMINISTRATOR, 

ENVIRONMENTAL PROTECTION AGENCY 

Ms. JACKSON. Well, thank you. Chairman Markey and Chairman 

Waxman, Ranking Members Upton and Barton, Chairman Emeritus Dingell, and members of the committee, thank you for inviting 

me to testify about the Environmental Protection Agency’s work to 

reduce America’s oil dependence and greenhouse gas emissions. 

That work stems from two seminal events. 

First, in April 2007, the U.S. Supreme Court concluded in Massachusetts v. EPA that the Clean Air Act’s definition of air pollution 

includes greenhouse gases. The Court rejected then Administrator 

Johnson’s refusal to determine whether that pollution for motor vehicles endangers public health or welfare. 

In response to the Supreme Court’s decision and based on the 

best available science and EPA’s review of thousands of public comments, I found in December 2009 that motor vehicle greenhouse 

gas emissions do endanger Americans’ health and welfare. 

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I am not alone in reaching that conclusion. Scientists of the 13 

Federal agencies that make up the U.S. Global Change Research 

Program have reported that unchecked greenhouse gas emissions 

pose significant risk to the well-being of the American public. The 

National Academy of Sciences has stated that the climate is changing, that the changes are mainly caused by human interference 

with the atmosphere, and that those changes will transform the environmental conditions on Earth unless countermeasures are 

taken. 

The second pivotal event was the agreement President Obama 

announced in May 2009 between EPA, the Department of Transportation, the Nation’s auto makers, America’s auto workers and 

the State of California to seek harmonized, nationwide limits on 

the fuel consumption and greenhouse gas emissions of new cars 

and light trucks. 

My endangerment finding in December satisfied the prerequisite 

in the Clean Air Act for establishing a greenhouse emission standard for cars and light trucks of model years 2012 through 2016. So 

I was able to issue that final standard earlier this month, on the 

same day that Secretary of Transportation Ray LaHood signed a 

final fuel efficiency standard for the same vehicles. 

Using existing technologies, manufacturers can configure new 

cars and light trucks to satisfy both standards at the same time. 

And vehicles complying with the Federal standards will automatically comply with the greenhouse gas emissions standard established by California and adopted by 13 other States. This harmonized and nationally uniform program achieves the goals the 

President announced last May. Moreover, the EPA and DOT standards will reduce the lifetime oil use of recovered vehicles by more 

than 1.8 billion barrels. That will do away with more than a billion 

barrels of imported oil, assuming the current ratio of domestic production to imports does not improve. 

The standards also will eliminate more than 960 million metric 

tons of greenhouse gas pollution, but if Congress now nullified 

EPA’s finding that greenhouse gas pollution endangers the American public, that action would remove the legal basis for a Federal 

greenhouse gas emissions standard for motor vehicles. Eliminating 

the EPA standard would forfeit one-quarter of the combined EPA, 

DOT program fuel savings and one-third of its greenhouse gas 

emissions cuts. 

California and the other States that have adopted California’s 

greenhouse gas emission standard would almost certainly respond 

by enforcing that standard within their jurisdictions, leaving the 

automobile industry without the nationwide uniformity that it has 

described as vital to its business. 

I would like to mention one more action that EPA has taken to 

reduce America’s oil dependence and greenhouse gas emissions. 

In February I signed a final renewable fuel standard. It substantially increases the volume of renewable products, including cellulosic biofuel that refiners must blend into transportation fuel. EPA 

will implement the standard fully by the end of 2022. In that year 

alone the standard will decrease America’s oil imports by $41.5 billion, and U.S. greenhouse gas emissions that year will be 138 million metric tons lower, thanks to the standard. 

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EPA’s recent work on vehicles and fuels shows that enhancing 

America’s energy security and reducing America’s greenhouse gas 

pollution are two sides of the same coin. The recent analysis by the 

Agency found that widespread deployment throughout the U.S. 

transportation sector of efficiency technologies and practices that 

exist today would cause the sector’s oil use and greenhouse gas 

emissions in 2030 to be 25 to 40 percent lower than they otherwise 

would be. So while we have started addressing the twin challenges 

of oil dependence and greenhouse gas pollution, we clearly have the 

potential to go farther and accomplish more. 

Thank you again for inviting me to testify. I would be happy to 

answer your questions. 

[The prepared statement of Ms. Jackson follows:] 

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Mr. MARKEY. We thank you very much for your testimony, and 

now we will turn to questions from the subcommittee members. 

The chair will recognize himself. 

Isn’t it true that the Supreme Court decision in Massachusetts 

v. EPA required the EPA to determine whether an endangerment 

finding should be made for global warming pollution from cars and 

trucks? 

Ms. JACKSON. Yes. 

Mr. MARKEY. Isn’t it also true that your predecessor in the Bush 

administration, Stephen Johnson, reviewed the science and approved a draft endangerment finding that found the global warming pollution endangers the public welfare? 

Ms. JACKSON. Yes, sir, that is true. 

Mr. MARKEY. Isn’t it true that the EPA’s proposed endangerment 

finding made by Stephen Johnson was sent to the White House in 

December of 2007 and that the Bush administration’s EPA also developed a regulatory framework for greenhouse gas emissions 

under the Clean Air Act? 

Ms. JACKSON. Yes, that has been established as true. 

Mr. MARKEY. And isn’t it true that the White House refused to 

even open EPA Administrator Johnson’s e-mail? And isn’t it true 

that nothing further happened until you conducted a review of the 

science and submitted your endangerment finding to the Obama 

White House, which actually opened the e-mail? 

Ms. JACKSON. That is true. 

Mr. MARKEY. Now some critics have raised numerous questions 

about the accuracy of climate science over the last 6 months, including questions about whether the Himalayan glaciers will melt 

or whether the Amazon will dry out. Were any of these specific 

studies used to determine whether greenhouse gas pollution endangers public health and welfare in this country? 

Ms. JACKSON. No, because the endangerment finding was focused 

on impacts to this country and to the welfare and health of Americans. None of those two studies that you mentioned and the errors 

that were found in those reports impacted endangerment findings. 

Mr. MARKEY. So give us a couple of key findings that you made 

relating to how changes and climate effect the United States that 

led to your decision. 

Ms. JACKSON. Certainly. Sea level rise, increased threats of 

droughts, changes in our climate that would have dramatic impacts 

on agriculture and productivity, increased severe weather impacts, 

and I think even the acidification issues that we heard earlier all 

factored into my determination of endangerment. 

Mr. MARKEY. And so your decision was based upon the impact 

on the United America of America? 

Ms. JACKSON. That is correct, absolutely. 

Mr. MARKEY. So whatever other information is out and being debated about the Himalayas or other parts of the world, that was 

not what your findings relied upon? 

Ms. JACKSON. That is correct. 

Mr. MARKEY. Now, could legislative efforts to overturn the 

endangerment finding also have the effect of overturning EPA’s car 

and light truck standards that you just finalized with the Department of Transportation, the ones that are supported by Ford, Genmstockstill on DSK4VPTVN1PROD with 

36 

eral Motors, Chrysler, the United Auto Workers, and that also reduce the need for 2 million barrels of oil per day, could legislative 

efforts to overturn the endangerment finding legislatively impact 

that decision? 

Ms. JACKSON. Yes, I believe legislation that overturns the 

endangerment finding would certainly not only impact, but would 

nullify the regulations you mentioned because that finding of 

endangerment is the basis for those regulations. 

Mr. MARKEY. So this agreement that you reached that everyone 

agreed upon would in fact be endangered by legislative action? 

Ms. JACKSON. Yes, I believe we would take what as we heard 

here many people think is a very good thing and was a victory for 

the environment and for our energy independence and our security 

and we would lose that victory, and in fact we would go back to 

where we were before, which was a nonuniform complex regulatory 

net that did not allow auto makers to move forward with certainty. 

Mr. MARKEY. Now, let me ask one final question and that is 

what has been the response from the automotive industry to the 

merger of the provision in the 2007 law with the finding in Massachusetts v. EPA and then this harmonization in terms of their response to their reinvention of the automobile and the competitiveness of our American auto industry? Could you talk a little bit 

about that and any misgivings you are hearing from the auto industry about moving in this direction? 

Ms. JACKSON. The auto industry has come a long way. I think 

they have now embraced the certainty that one national standard 

gives them for cars from 2012 to 2026, so much so that I am aware 

that they have written asking Congress not to overturn the 

endangerment finding because—— 

Mr. MARKEY. Can you say that again? 

Ms. JACKSON. They have written asking Congress to not entertain legislation to overturn the endangerment finding because it 

would strip them of the very regulatory certainty they now have. 

They have also begun pretty public ruminations about wanting to 

start the next phase, to do it again, to look at opportunities, and 

we have also seen industries outside the passenger auto sector look 

for the same kind of treatment, if you will. 

Mr. MARKEY. So I think that is important for everyone to understand, that the United States automotive industry is asking that 

the endangerment finding not be overturned because it has created 

an investment environment that is making it possible for them to 

move forward very rapidly in creating new jobs here in America 

and becoming more competitive internationally. 

I thank you. 

Let me turn now and recognize the ranking member of the subcommittee, the gentleman from Michigan, Mr. Upton. 

Mr. UPTON. Thank you, Mr. Chairman. Administrator Jackson, I 

just want to on a different issue, just want to bring to your attention an issue that is very important to Michigan and had some attention this last week. I don’t know if it is crossed your desk yet, 

but my district, Kalamazoo, Michigan, is home to one of the largest 

Superfund sites in the country, Kalamazoo River, which is the 

fourth largest contributor of PCBs into Lake Michigan. It was labeled a Superfund site some 20 years ago, thousands of hours of 

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meetings and negotiations have been held between State and local 

folks, EPA and the two PRPs charged with funding the clean up. 

Last week, Friday, Lando Bassett, one of the PRPs, came to a 

bankruptcy settlement with DOJ that required them to pay only 

pennies on the dollar for their obligation of the cleanup. 

I had been working very closely with Senator Levin, Senator Stabenow. We have been together shoulder to shoulder. We are preparing a letter that ought to be ready I hope by the end of the week 

to you trying to make sure that—find out what timetable EPA 

might have to ensure that the cleanup continues as scheduled and 

the health and welfare of the folks in the watershed is not harmed 

any further. 

I just want to bring that to your attention, and we look for your 

immediate response as quick as you can. I don’t know if you are 

personally aware of it or not, but it is a big issue in southwest 

Michigan. 

Ms. JACKSON. Yes, I am happy to look into it and get back to you 

with an idea on cleanups there. 

Mr. UPTON. Great. 

I just want to say we all want to reduce our reliance on foreign 

oil, for me particularly coming from auto State. I am a big supporter of the electric hybrids, and I have driven the new Chevy 

Volt. I have seen an number of different cars that are literally 

going to be in the showrooms this year, and I know that because 

of that and other reasons our electricity needs are going to grow 

by 30 to 40 percent in the next 20 years. 

And I am a believer in basic economics, particularly supply and 

demand. And as we have increased demand like we are likely to 

have and we are going to need more supply, otherwise that price 

is going to go considerably up. But sadly what I see coming down 

the line is a reduction of supply, more regulations in lots of different ways. I don’t believe that we have the science yet—I am a 

big supporter of CCS, carbon capture, we will need more coal 

plants, clean coal, but we don’t have the technology ready yet to 

impose that on not only existing but new power plants. 

I am wondering how many—I don’t believe that EPA has approved any new coal—has allowed any new permitting for new coal 

plants in the last year or two. 

Ms. JACKSON. The majority of the permitting actions for new coal 

plants happen through the States and at the State level. I would 

say that the reason there has been such a bottleneck in new coal 

plant permitting is litigation and a shortage of capital. Those are 

the primary reasons. There are issues with permitting, the permits 

then result in litigation, and there is great uncertainty about when 

this country will move to price carbon. That effects the investments 

markets as well as—— 

Mr. UPTON. They were also banking on this new technology, the 

CCS, to be in place, is that not right? Carbon capture? 

Ms. JACKSON. I wouldn’t necessarily agree that that is the driver 

for the permit decisions. In fact there is absolutely no reason why 

a permit decision at that point would depend on CCS, although I 

join you in hoping that technology has great promise. I am sure 

you know the President has asked me to cochair a CCS task force 

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to get 5 to 10 projects up and running in the next few years so that 

we can hopefully make it commercially available. 

Mr. UPTON. I just know as we look to try to meet these demands, 

30 to 40 percent increase, and we are going to have to have more 

coal. We can’t sit on our hands with that resource that is there. On 

the nuclear side I applauded the President breaking ground, I believe it was in Georgia, the two new reactors that he broke ground 

on back in February or early March, but I also know that we have 

to deal with Yucca Mountain. We have to deal with a high level 

of nuclear waste that has been zeroed out in their funding. And I 

also know as a supporter of renewables, wind and solar we can talk 

a lot about it, but if we don’t have the resources to hook them up 

to the grid it is no good, let alone to have the backup when the 

wind and the sun don’t shine, as they say. 

Ms. JACKSON. Yes. The President has said that we need to invest 

in our traditional sources. We need to make sure that they are 

clean sources, so we also need to invest in the technologies like 

CCS that will address carbon pollution from coal, because coal is 

such a carbon intense fuel and has such high emissions. 

But I think you are right, his actions and this administration’s 

actions have demonstrated a willingness to embrace other forms of 

energy, including domestic sources. The only thing I might add is 

that I think just like the cars rule is really an efficiency program 

for passenger cars, there is a need for us to focus as we have done 

in the Recovery Act and other places on energy efficiency, on making sure that the average American becomes a miser for power because we will be competing for power in a world marketplace that 

also—— 

Mr. MARKEY. The gentleman’s time has expired. 

The chair recognizes the chairman of the full committee, Mr. 

Waxman. 

Mr. WAXMAN. Administrator Jackson, as I understand it, this 

tailpipe rule that you have issued earlier this month would save 

1.8 billion barrels of oil; is that correct? 

Ms. JACKSON. That is right. 

Mr. WAXMAN. And I am thinking back over the last 30 years and 

I can’t think of any law or regulation that has saved that much oil. 

Are you aware of any law or regulation that does so much to address our dependence on oil? 

Ms. JACKSON. No, not off the top of my head, sir. 

Mr. WAXMAN. My understanding is that permit requirements for 

stationary sources are triggered when a pollutant is subject to regulation under the Clean Air Act. So according to that interpretation 

you issued on March 29, 2010, this will occur for greenhouse gases 

on January 20, 2011, when the control requirements of the motor 

vehicle rule take effect and then they are binding on manufacturers; is that correct? 

Ms. JACKSON. That is correct. 

Mr. WAXMAN. Once motor vehicle rules are in effect next January, absent any action by the EPA, the Clean Air Act would require 

new or modified sources that emit more than 250 times of carbon 

dioxide per year to obtain a permit. 

Ms. JACKSON. Right, absent any action by EPA. 

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Mr. WAXMAN. So in effect because of the Clean Air Act when you 

deal with the mobile sources, which is what the Supreme Court decision addressed, that would trigger requirements for stationary 

sources for carbon pollution. I believe we all agree that if EPA did 

not take further action and these requirements went into effect as 

is, it would be a significant problem. 250 tons is a reasonable 

threshold that generally captures only large industrial and commercial sources, but when you are talking about greenhouse gases 

it would be numerous smaller sources that are not regulated now 

and I think shouldn’t be regulated. I think this would be an unacceptable situation, but thanks to your actions, we don’t actually 

face that situation. 

Last fall you proposed a tailoring ruling to significantly narrow 

application of the permitting requirements to stationary sources of 

carbon pollution that would exclude these smaller sources. Can you 

update the committee on the status of that rulemaking? 

Ms. JACKSON. Yes, Mr. Chairman, the rule went through public 

comment. We received a large number of public comments and are 

in the process of finalizing a rule. As you mentioned, it is important for us to do that in order to give assurance to smaller, and 

I would go as far as to say mid-sized sources, that they are not, 

come next January, going to be subject to immediate regulation 

and in fact we have said just the opposite. 

Mr. WAXMAN. What would the tailoring rule require? What 

would you do? 

Ms. JACKSON. Right, it is not final. As we proposed it, it was a 

phase-in, it is a gradual phase-in of the larger sources, and I have 

given some hints as to what I believe will be in the final rule and 

I feel fairly comfortable saying that the final rule will include, come 

January, only those sources that are currently subject to Title 5 

permitting for another pollutant to look at greenhouse gas pollution 

and then later in the year perhaps an additional number of sources 

would be phased in, a small number of very large sources. We 

haven’t given the threshold as to what that would be, but it is orders of magnitude higher than 250 tons, the idea being that this 

is a very slow, deliberate, measured approach with a regulatory 

community quite frankly that is quite used to. 

Mr. WAXMAN. Is it fair to say EPA does not intend to second the 

smaller sources to Clean Air Act permitting for greenhouse gases 

any sooner than 2016? 

Ms. JACKSON. That is absolutely true. 

Mr. WAXMAN. And just to be clear, these requirements can only 

apply to smaller sources in the future after EPA completed an additional rulemaking; isn’t that correct? 

Ms. JACKSON. That is correct. 

Mr. WAXMAN. Now some argue that tailoring rule may be overturned in court with disastrous consequences. Is your general counsel comfortable with the legal status for this tailoring rule? 

Ms. JACKSON. Yes, sir. 

Mr. WAXMAN. Now even in the worse case scenario where the 

rule is overturned in court, wouldn’t it take years before we could 

expect a final decision in the court? 

Ms. JACKSON. Yes, I am not a lawyer, but I think—— 

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Mr. WAXMAN. Clean Air Act cases typically take 3 to 5 years before a decision becomes final. It also seems highly unlikely that the 

rule would remain in effect during any litigation. There would be 

a higher court to issue a stay. Petitioner would have to show a 

strong showing that he is likely to succeed on the merits and he 

would suffer irreparable injury absent a stay. It would be difficult 

to make this showing for a rule such as this that relieves burdens 

rather than imposing them. Is that what your lawyer has been saying? 

Ms. JACKSON. That is absolutely right. 

Mr. WAXMAN. And Mr. Chairman, in my view they are taking a 

common sense approach, it is an effective approach that will avoid 

scenarios that none of us want. If Congress enacts comprehensive 

energy and climate legislation this year as I hope we will do, it will 

resolve the issue, and there is ample time for Congress to act on 

this issue in the future if and when it becomes necessary. 

Thank you, Mr. Chairman. 

Mr. MARKEY. The chairman’s time has expired. 

The chair recognizes the ranking member of the full committee, 

Mr. Barton. 

Mr. BARTON. Thank you. Thank you, Mr. Chairman. We are trying to convert centimeters to inches down here. 

Administrator Jackson, again thank you for being here. Are you 

familiar with the report that one of your employees Dr. Allen 

Karlin issued on the endangerment finding at the EPA? 

Ms. JACKSON. I am familiar with the work and his desire to have 

that put into the record. 

Mr. BARTON. OK. Did you read his report or a summary of his 

report? 

Ms. JACKSON. I read some summaries of his report and ensured 

that my staff considered it as part of the comments. 

Mr. BARTON. So you are aware that at least one person at the 

EPA is scathing the concerns about whether at that time was a 

proposed endangerment finding. One of his concerns was that EPA 

didn’t do any independent analysis of some of these studies that 

were used to justify the endangerment finding. Why not, why didn’t 

the EPA try to verify some of this information that the finding is 

based upon? 

Ms. JACKSON. The majority of our work at EPA is done by looking at—I am sorry, let me start again. The endangerment finding 

work primarily relied on peer review, our standard was that we 

wanted to look at peer reviewed work and we had in addition to 

external peer reviewers a Federal team of reviewers who were reviewing our work. 

Mr. BARTON. Some of the material apparently used were press 

releases. Is it standard operating procedure for the EPA to issue 

major findings based on a press release? 

Ms. JACKSON. I believe what you are referring to, Mr. Barton, is 

that subsequent we have come to find out that there have been 

some allegations made that there were press release information in 

studies. What we did was whenever someone raised any questions 

about either the IPCC data or any of the underlying data, I made 

it clear to myself that we had obligation to investigate whether or 

not it changed the basis of the finding. 

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Mr. BARTON. I am sure you are aware that there are e-mails between Dr. Karlin and his superior in which Dr. Karlin is asking his 

study be considered. One of the e-mail responses is you don’t understand, the White House has already made its decision, stop 

sending—stop working on this report. Are you aware of that email? 

Ms. JACKSON. Yes, sir, we discussed that, remember, a while ago 

on a phone call, we talked about it. 

Mr. BARTON. So what is your response? He certainly was of the 

opinion that the conclusion had already been made that there really wasn’t any real effort to do an analysis of the endangerment 

finding. And you have admitted—or your agency didn’t do any 

independent studies, that you took at face value the material that 

was basically put out by the advocates were man-made greenhouse 

gases causing climate change. 

Ms. JACKSON. No, sir, I don’t agree with that assertion. The 

Agency’s endangerment finding was based on thoroughly reviewed 

material by a number of scientific organizations. Mr. Karlin’s and 

the e-mail changes we discussed. I don’t know why his supervisor 

wrote what he wrote. He has been counseled, I did not personally 

do it. 

Mr. BARTON. Counseled not to tell the truth, he has been counseled to keep his mouth shut? What has he been counseled to do? 

Ms. JACKSON. He has been counseled not to make assertions that 

aren’t factual. The endangerment finding that was begun under the 

Bush administration—this was years and years of work inside the 

Agency and Dr. Karlin’s advocacy extended back into those days as 

well. The fact that he had an opinion should not have been shut 

down because someone asserted that the White House wanted—— 

Mr. BARTON. Dr. Karlin’s opinion was that the EPA should actually do what it is supposed to do, which is try to independently 

evaluate, which has not happened. 

Now you mentioned in response to a question from Chairman 

Markey that one of the reasons that the endangerment finding was 

put forward was because of a rise in sea level. Do you know what 

the sea level rise has been in the last 100 years in the United 

States? 

Ms. JACKSON. I am sure you have it, sir. 

Mr. BARTON. I do. Would you want to make a guess? 

Ms. JACKSON. I don’t see a reason to guess. 

Mr. BARTON. It is 20 centimeters. 20 centimeters. Do you know 

what the EPA estimates the reduction in sea level rise is going to 

be in the next 90 years because of your tailpipe standard that you 

have been talking about with Mr. Waxman and Mr. Markey? Do 

you have any idea what—— 

Ms. JACKSON. I actually never thought of it in terms of a reduction in sea level rise. We talk about it in terms of greenhouse gas 

emissions. 

Mr. BARTON. Well, you said one of the reasons you issued an 

endangerment finding was because of rising sea level, where according to your own EPA scientists this tailpipe standard that you 

all talked about is going to reduce sea level rise over the next 9 

years between 600ths to 1400ths of a centimeter. Now how in the 

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world can sea level rise be used as an excuse for an endangerment 

to public health? 

Ms. JACKSON. I am afraid that—— 

Mr. BARTON. I am just going on what you said, Madam Administrator. 

Ms. JACKSON. Yes, but what we did in the rule that you are referring to is come up with a rule that reduces our dependence on 

oil, that says we can drive cars that are more fuel efficient and that 

put out less greenhouse gas pollution. That is what the law requires. 

Mr. BARTON. My time has expired. Mr. Markey is being very gracious. Let me ask one more question, Mr. Chairman. 

If in fact the endangerment finding is shown to be flawed and 

is thrown out, is it not true that you cannot regulate CO2 under 

the Clean Air Act if you don’t have the endangerment finding to 

give you the authority to do so? 

Ms. JACKSON. There were a lot of nots in there, so let me make 

sure that I understand the question. If the endangerment finding 

is thrown out or in some way nullified, then the basis for the automobile rule—— 

Mr. BARTON. No, ma’am, the endangerment finding to regulate 

CO2 as a pollutant is—the EPA does not have the authority unless 

you have an endangerment finding giving you that authority. 

Ms. JACKSON. Right, the endangerment finding is not a regulation but it is the basis for regulation of automobiles. 

Mr. BARTON. Yes, ma’am. And if we don’t have the endangerment 

finding—not you but the EPA does not have the authority to regulate CO2 as a pollutant, do you agree with that? 

Ms. JACKSON. Right. If we don’t have the endangerment finding, 

we lose the clean car rule, so it is gone, we lose any authority to 

regulate greenhouse gas emissions from motor vehicles. 

Mr. BARTON. Thank you, Mr. Chairman. We will have a number 

of questions for the record. 

Mr. MARKEY. The gentleman’s time has expired. 

The chair recognizes the gentleman from Michigan, the chairman 

emeritus. 

Mr. DINGELL. Thank you, Mr. Chairman. Thank you, Administrator, welcome to the committee. 

Am I correct in understanding that the endangerment finding is 

a legal underpinning for the national standard for automobile emissions? 

Ms. JACKSON. Yes. 

Mr. DINGELL. Now, what would happen to the national standard 

for autos if the Congress passed a resolution of disapproval of the 

endangerment finding? 

Ms. JACKSON. The legal underpinning would then be gone and so 

I think that there would be no way to withstand any challenge to 

the legality of those regulations. 

Mr. DINGELL. Now, what would be the practical consequences of 

that with regard to moving sources and what would be the practical consequence of that with regard to stationary sources? 

Ms. JACKSON. With regard to moving sources the regulation 

would then be void. So we would go back to a situation where California would have the authority along with other States who opted 

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in to regulate emissions from automobiles, and the Department of 

Transportation and NHTSA would do CAFE standards probably in 

accordance with ISSA and as far as stationary sources there would 

be no EPA authority to regulate stationary sources. 

Mr. DINGELL. There would be none. 

Ms. JACKSON. I believe. 

Mr. DINGELL. Is there authority now to regulate stationary 

sources or is there not? 

Ms. JACKSON. There is actually an obligation to—our reading of 

the Clean Air Act says there is an obligation to regulate stationary 

sources. 

Mr. DINGELL. With regard to CO2? 

Ms. JACKSON. Yes. Once it became a pollutant and was regulated 

and found to endanger public health and welfare, the Clean Air Act 

says now other portions of the Clean Air Act apply. 

Mr. DINGELL. Now this is a result also of the Supreme Court’s 

decision in finding an endangerment; is that right? 

Ms. JACKSON. Yes, the Supreme Court’s order that the EPA 

make a determination. 

Mr. DINGELL. Now what is the practical result to stationary 

sources if this resolution disapproval passes the Congress? 

Ms. JACKSON. The practical result to stationary sources, sir, 

would be that EPA regular—I believe, I am not a lawyer, I believe 

EPA would not be able to regular—would not be able to regulate 

stationary sources any more than mobile sources. 

Mr. DINGELL. So how many different regulatory standards would 

be imposed on, first of all, stationary sources, but under what requirements of law? 

Ms. JACKSON. Well, certainly and again not being a lawyer, but 

certainly we have already seen individual States who in some way 

are regulating greenhouse gas emissions—— 

Mr. DINGELL. Would they be regulated under which provisions of 

the law, would they be regulated under the State implementation 

plans, would they be regulated under some other section? What 

would be the practical effect in terms of the number of different 

regulations of the State rather than the stationary sources would 

have to meet? 

Ms. JACKSON. With the caveat that I will make sure I get an answer from my lawyers, I am aware that States right now have 

their own State laws. 

Mr. DINGELL. But the potential is for how many different—how 

many different sets of regulations that they would have to correspond to, it would have to do State implementation? 

Ms. JACKSON. Uh-huh. 

Mr. DINGELL. Would there be other requirements that the States 

under the Clean Air Act would have to meet? 

Ms. JACKSON. There could be individual State level—we are assuming the endangerment finding is gone. So the Clean Air Act authorities for CO2 may not be available, but many States are already 

regulating under their own laws and other entities are feeling the 

effects of litigation under nuisance laws, under common law. 

Mr. DINGELL. How many regulations would the auto industry 

have to meet in the moving sources? 

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44 

Ms. JACKSON. Oh, potentially 50 or more. Right now 13 States 

had joined with California to have their own regulations. 

Mr. DINGELL. Now the agreements with California and the other 

States that are there now held by the administration expires just 

prior to 2017; is that right? 

Ms. JACKSON. That is right, it is through model year 20—— 

Mr. DINGELL. Are there any negotiations going to see to it that 

we have the same national standard approach going forward for 

post 2017? 

Ms. JACKSON. I think it would be a stretch to say they are in at 

this time, but there has been expressions of interest from auto 

makers to begin having discussions. 

Mr. DINGELL. You are telling us that there are no negotiations 

going on under the auspices of the administration or EPA? And can 

you tell us why that is not taking place? You have to look forward 

to 2017, which is just a few years off. 

Ms. JACKSON. Yes. I think it is probably just a matter of time 

that we have not yet. 

Mr. DINGELL. Well, let me remind you that the law—rather, the 

automobiles are manufactured with a 3, 4 and 5-year lead time. So 

if I seek correct you only have a year or so before you are running 

into a serious collision with that lead time. When do you propose 

to start these things? 

Ms. JACKSON. I think we need to do it soon, sir. So I will get back 

to you with when we can commit to looking at 2017. 

Mr. DINGELL. So are you telling me that you propose to go back 

on down to EPA and to start looking into that and see what you 

can do about getting these negotiations going. 

Ms. JACKSON. Yes, sir. 

Mr. DINGELL. Thank you. 

Thank you, Mr. Chairman. 

Mr. MARKEY. The gentleman’s time has expired. 

The chair has three letters from the Alliance of Auto Manufacturers, the International Auto Alliance, and the United Auto Workers, all saying they do not want the endangerment finding to be 

overturned. I ask unanimous consent that these letters be submitted for the record. 

Without objection, so ordered. 

[The information appears at the conclusion of the hearing.] 

Mr. MARKEY. The chair recognizes the gentleman from Illinois, 

Mr. Shimkus. 

Mr. SHIMKUS. Thank you, Mr. Chairman. 

Welcome, Administrator. A couple things. 

Let’s be clear: When we say price carbon, we mean energy costs 

increase, correct? If 50 percent of our electricity portfolio is coal, we 

are adding an additional cost to electricity if we price carbon, correct? 

Ms. JACKSON. And it depends how it is done, as to whether or 

not that is a small—— 

Mr. SHIMKUS. Well, if we try to manage it, we have capital expenses, which then will incur millions of dollars of new equipment. 

Or we go to carbon capture sequestration, which is 10 years down 

the road. That is all addition of cost. So let’s be clear: When people 

say price carbon, they mean increased cost. 

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45 

Let me refer to this poster here. I have used it many times. My 

colleagues can all name these individuals. This is what happened 

under the last Clean Air Act amendments, which I think you can 

credibly argue had toxic emissions. Fourteen thousand jobs in Illinois, coal miner jobs, were lost, in Illinois alone, not including what 

happened in Ohio and Pennsylvania or across this country. Pricing 

carbon destroys jobs, not just in the coal mining industry, in the 

electricity industry and in the manufacturing industry, because you 

will increase cost of doing goods. 

That is why we are now segueing from the climate debate to energy and security, because with the failed IPCC rulings, with climate-gate, with the fact that scientists are not using the scientific 

method to replicate these tests, when we are talking about the Supreme Court ruling, the endangerment finding cannot stand on factual evidence. 

In fact, my colleague, Mr. Inslee, is just a perfect example of 

using tests that can’t be replicated in the natural environment, because the test that he is quoting is a test that is a synthetic reproduction using unnatural factors and variables. In fact, CO2 was not 

even the substance to lower the pH in these samples. What was 

used was hydrochloric acid. 

So what would help the world address climate is that we would 

agree to use real science, real data that the public can perceive 

that can be replicated in a real-world environment. We are not 

using the scientific method. That is why now the public is skeptical 

on this whole issue of climate change. 

Administrator, what is the percent of the Earth’s atmosphere 

that greenhouse gases make up? 

Ms. JACKSON. It depends on how you define ‘‘greenhouse gases,’’ 

sir. 

Mr. SHIMKUS. Well, OK, you define it. 

Ms. JACKSON. Well, EPA’s endangerment finding includes six 

gases. 

Mr. SHIMKUS. Well, what is the percentage? 

Ms. JACKSON. You know, I have some—— 

Mr. SHIMKUS. It is 2. Two percent of the entire Earth’s atmosphere is greenhouse gases. 

Now, you know what is the major percentage of what makes up 

greenhouse gases in the Earth’s atmosphere? 

Ms. JACKSON. I am thinking—— 

Mr. SHIMKUS. Water vapor. 

Ms. JACKSON [continuing]. Water vapor. 

Mr. SHIMKUS. Do you know what percentage? 

Ms. JACKSON. Thirty percent maybe? 

Mr. SHIMKUS. A little higher. 

Ms. JACKSON. No, I am not going to guess. Why don’t you tell 

me? 

Mr. SHIMKUS. Ninety-five percent, 95 percent. 

So, of the 2 percent of greenhouse gases that are in the atmosphere, do you know how much is man-made greenhouse gases, 

which is what we are trying to say is endangering the public 

health? 

Mr. DOYLE. Will the gentleman yield? 

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46 

Mr. SHIMKUS. It is 2—no, I will not. It is 2 percent of 2 percent. 

It is 0.28 percent of the entire Earth’s atmosphere is what we are 

debating here. 

Now, let me ask you another question. The endangerment finding says ‘‘endangering public health.’’ At what concentration does 

carbon dioxide endanger individual public health? 

Ms. JACKSON. Well, we are not talking about what you breathe 

in that makes you sick. We are talking about concentrations of anthropogenic carbon dioxide. 

Mr. SHIMKUS. And define ‘‘anthropogenic.’’ 

Ms. JACKSON. Man-made. 

Mr. SHIMKUS. And that is 0.28 of the Earth’s atmosphere? 

Ms. JACKSON. But we are talking—— 

Mr. SHIMKUS. Yes or no? Is that 0.28 percent of the Earth’s atmosphere? 

Ms. JACKSON. I don’t know. I will certainly verify. It is a very low 

number volumetrically, but—— 

Mr. SHIMKUS. It is extremely low. 

Ms. JACKSON [continuing]. It is not low from a global warming 

perspective. 

Mr. SHIMKUS. Do you know the frustrating thing about this debate? We keep using tonnage to say—and people think of tons, and 

they say, ‘‘Oh, we are overwhelmed by the tons.’’ And we are talking about 0.28 percent of the atmosphere. 

Ms. JACKSON. What we are talking about—— 

Mr. SHIMKUS. OSHA has a standard where parts per million affects public health. Do you know what that standard is? 

Ms. JACKSON. It has to be fairly high. 

Mr. SHIMKUS. Five thousand parts per million. What is the parts 

per million in the Earth’s atmosphere of greenhouse gases? 

Ms. JACKSON. It is 300 or so. 

Mr. SHIMKUS. Three hundred forty-eight percent. 

This is a fraud being perpetrated on the world that is going to 

destroy jobs on a false premise that carbon dioxide is going to wipe 

out the Earth’s planet. And the public is on to this, and I am embarrassed by this administration to continue to push it. 

Mr. DOYLE. Will the gentleman yield? 

Mr. SHIMKUS. I will not. I yield back the balance of my time. 

Mr. MARKEY. The gentleman’s time—— 

Ms. JACKSON. Could I respond, Mr. Chairman? 

Mr. MARKEY. Yes, you may. 

Ms. JACKSON. Thank you. 

I disagree with the premise of your analysis, sir. I am certainly 

not a climate scientist by training, but the volume of material in 

the atmosphere is a misleading statistic. What we are talking 

about is balance, is the simplest way I can explain it. That the atmosphere—may I finish, please? 

Mr. SHIMKUS. I haven’t intervened yet, but—— 

Ms. JACKSON [continuing]. The atmosphere is in balance. And we 

keep putting these gases, which have the potential to act as they 

do in a greenhouse—CO2 is very warming. It may not be much of 

the volume of the atmosphere, but its potential to warm the atmosphere, to change our climate is much, much higher than its volume 

in the atmosphere, probably 25 or 30 percent. 

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And so, the analysis you are talking about is—to look at the volume and simply say it is not there is to ignore its effect. And it 

is not simply EPA or Lisa Jackson who is saying that. I mean, you 

know, the scientists in our country—we have to work by consensus. 

It doesn’t mean there might not be some disagreement, but the 

overwhelming consensus is that climate change is happening, and 

it is due to man’s impact through the fact that we are burning fossil fuels and we are accumulating vast amounts of greenhouse gas 

potentials. 

Mr. SHIMKUS. So you agree with the hockey stick calculation of 

the tipping point of greenhouse gases? 

Mr. MARKEY. The gentleman’s time has expired. 

Mr. SHIMKUS. Can she follow up? You gave her time to respond 

to me. Can she follow up to my question? 

Mr. MARKEY. She was answering your question, and I felt—— 

Mr. SHIMKUS. Does she subscribe to the hockey stick? 

Mr. MARKEY [continuing]. I felt that I would provide her—— 

Mr. SHIMKUS. The one that you brought out here numerous 

times, this hockey stick graph? Is that valid science? 

Mr. MARKEY. To the gentleman, you asked her a question. 

Mr. SHIMKUS. She responded. 

Mr. MARKEY. The time expired. She asked if she could respond 

to your question. 

Mr. SHIMKUS. All right. Thank you, Mr. Chairman. 

Mr. MARKEY. I was only doing it really as a courtesy to you so 

that—— 

Mr. SHIMKUS. I am just asking if she still supports the hockey 

stick graph. 

Mr. MARKEY [continuing]. So that your answer to the question—— 

Mr. SHIMKUS. Do you support the hockey stick graph? 

Mr. MARKEY. It is obviously—— 

Mr. SHIMKUS. Do you know what the hockey stick graph is? 

Mr. MARKEY. I guess what the gentleman is trying to say is, how 

can only a 2 percent addition to the atmosphere cause such a huge 

change? And it would be like saying, how can—what if subprime 

loans were only 2 percent? 

Mr. SHIMKUS. What I am trying to say is the science is flawed, 

and we are going to destroy jobs. That is what I am saying. 

Mr. MARKEY. If subprime loans were only 2 percent of the total 

financial products in the world, could they cause a global financial 

meltdown? 

Mr. SHIMKUS. Two percent of 2 percent of 2 percent. 

Mr. MARKEY. Yet that is a financial reality, as is this a scientific 

reality. 

The gentleman’s time has expired. 

The chair recognizes the—I know the gentleman from Pennsylvania would like to be recognized at this time, but that could only 

happen with the generosity and beneficence of the gentlemen from 

Texas and California. 

I recognize the gentleman from Texas. 

Mr. GREEN. OK. Thank you, Mr. Chairman. And I will try and 

be as quick as we can. 

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48 

Madam Administrator, I want to thank you again for appearing 

this morning. 

And I have always believed that a balanced energy policy must 

have three basic points: energy conservation and efficiency, research and development in new and clean energy technologies, and 

environmentally responsible domestic energy production. 

However, Administrator, even with these measures to increase 

efficiency that we in Congress push and your agency works to promote on a daily basis, do you believe it is still necessary to increase 

the environmentally responsive production of domestic natural gas 

supplies in order to meet short-term carbon reduction targets called 

for in any climate and to keep our manufacturing jobs here in the 

United States? 

Ms. JACKSON. It is not my job to set that kind of policy; obviously, it is all of you. But I can say that, certainly, natural gas has 

a lower carbon emission factor intensity and could certainly be very 

helpful, especially now that we are finding that we have more of 

a supply than we knew we had. 

Mr. GREEN. I appreciate that. In fact, in the last few years, because you and I have talked about the kind of area I represent 

where we produce and refine and have chemical industries, and we 

have seen such a difference because of the success in expanding our 

long-term ability to produce domestic natural gas. 

On a similar subject, the Energy Information Administration estimates that there is 1,744 trillion cubic feet of technically recoverable natural gas in the U.S., or enough to supply our country for 

90 years at current rates of production, according to the industry. 

Much of it can only be recovered when we use hydrofracking for 

wells. 

In 2004, an EPA study found no evidence that fracking threatens 

drinking water. And now, for the first time, the EPA has undertaken its own water analysis in response to complaints of contamination in drilling areas. I look forward to the results of your study. 

And I am confident hopefully you will reach the same conclusion 

as 2004, and hope that we can come back to discuss your findings 

in 2012. 

In the meantime, can you assure me that the EPA will not make 

any moves to regulate hydrofracking until you have completed your 

study? 

Ms. JACKSON. As I understand it, sir, we couldn’t because it 

would probably require a change in law of some type. 

Mr. GREEN. OK. Thank you. 

Mr. Chairman, my last question, and I will give you some time 

back, I hope. 

The EPA recently finalized a rule to implement the long-term renewable fuel standard by Congress under the Energy Independence 

and Security Act. The renewable fuel standard requires biofuels 

production to grow from 11.1 billion gallons in 2008 to 36 billion 

gallons in 2022. However, it is my understanding that refiners are 

having difficulty meeting these targets due to various factors, but 

mainly the feasibility of reaching target X by X time. 

Please discuss how the EPA plans to work with refiners to be 

able to resolve these issues. I have long advocated for, rather than 

setting these targets for years, to instead have the EPA study the 

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49 

issue for a few years and ensure that the targets are feasible and 

realistic. Does EPA have a plan, since we can’t meet that target, 

on how we can actually still produce fuel to run our vehicles? 

Ms. JACKSON. Right. So, under the Energy Independence and Security Act, EPA has many responsibilities. One of them is to set 

the target numbers based on supply that is actually out there. I 

think you are referring to cellulosic ethanol and the fact that this 

year, in setting the target, EPA lowered it dramatically because 

there really isn’t supply out there. So it would be unfair to ask refiners to try to meet it. 

Mr. GREEN. Yes. 

Ms. JACKSON. We are closely monitoring that. That is what the 

law requires us to do, to set those targets as production increases. 

And we work with sort of a cross-section of the industry on both 

sides, the refinery side and the producing side, to try to—and of 

course we work with the Department of Energy to set those numbers. And we will continue to do that, sir. 

Mr. GREEN. OK. Well, and I support expansion of research in cellulosic. In fact, one of my frustrations, Mr. Chairman, is we don’t 

have the jurisdiction over the tax incentives for biofuels. But if we 

ever do that extender, I actually have biofuel refineries that are 

shut down because they can’t economically do it without those tax 

extenders. And so I appreciate the—we will continue to work on 

that to help get that product there for us. 

Mr. MARKEY. Will the gentleman yield? 

Mr. GREEN. I will be glad to yield to my colleague from Pennsylvania. 

Mr. DOYLE. Thank you. 

And, Mr. Chairman, I was trying to engage my good friend, Mr. 

Shimkus. 

I was just wondering, Mr. Chairman, if you know what percent 

of your blood is made of platelets. 

Mr. MARKEY. No, I don’t. 

Mr. DOYLE. About 3 to 7 percent of all our blood cells. Yet, you 

know, without that 3 percent, a small cut would cause you to bleed 

to death. Did you know that, Mr. Chairman? 

Mr. MARKEY. I know I could bleed to death, but I didn’t realize 

it was from such a small percentage of my body could cause such 

a dramatic change in my overall wellbeing. 

Mr. DOYLE. Mr. Chairman, did you know that each member of 

the Energy and Commerce Committee represents only 2 percent of 

our collective wisdom? 

Mr. MARKEY. That is a very high number, though. 

Mr. DOYLE. That is a very high number, yes. 

I yield back, Mr. Chairman. 

Mr. MARKEY. I thank the gentleman. 

The chair recognizes the gentleman from Texas, Mr. Burgess. 

Mr. BURGESS. Administrator Jackson, I think in response to 

some questions from Ranking Member Barton you cited the criteria 

used in the endangerment finding of acidification of the oceans, agriculture production, and increased weather. Do I recall that correctly? 

Ms. JACKSON. Those are some of the criteria I listed. 

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50 

Mr. BURGESS. But really, for an endangerment finding, aren’t we 

required to see an effect on human health? 

Ms. JACKSON. It is public health and welfare. There were two 

standards. 

Mr. BURGESS. Can you give me an idea of the number of deaths 

in this country, either last year or the year before, the outsize number, that would occur because of the increased acidification of the 

oceans in those years? 

Ms. JACKSON. Well, I don’t think we made an assertion that 

there were deaths associated with increased ocean acidification last 

year, so I shouldn’t have to defend a number. We never—— 

Mr. BURGESS. But for there to be an endangerment finding, 

though, there should be human endangerment. 

Ms. JACKSON. But that is not the only criteria by which to make 

that determination, sir. 

Mr. BURGESS. Well, what is the amount of carbon dioxide that 

is safe? 

Ms. JACKSON. Well, it depends on what you mean by ‘‘safe,’’ sir. 

People have talked about a level in the atmosphere; I have heard 

350 parts per million, I have heard 400, 450. Scientists use very 

complex models to try to determine, as that percentage of CO2 increases and CO2 equivalents increases, what that would mean for 

rising sea levels, what that might mean for changes in our climate. 

So they try to work backwards to project what level—— 

Mr. BURGESS. If I could just stop you there for a minute. OSHA 

has a level of 5,000 parts per million, or half of 1 percent, as being 

an acceptable level. NIOSH says 30 parts per million, though I 

don’t know that anyone actually recommends that. So there is a 

wide degree of latitude amongst the Federal agencies of the level 

of carbon dioxide which actually causes damage to human health. 

Ms. JACKSON. Well, that is apples and oranges, sir. I think the 

ocean numbers you are looking at are what you could breathe in 

if you are being occupationally exposed on a short-term basis. 

Those are probably cell numbers that would make you not able to 

breathe and, therefore, might harm you permanently and might 

kill you. Whereas, what I was referring to when we deal with climate change is what numbers would try to stop the trajectory in 

the changes in our atmosphere. 

Mr. BURGESS. Well, maybe then you could help us by saying 

what does the EPA use to assess the health impacts of, say, carbon 

dioxide—and any of the other greenhouse gases, but carbon dioxide 

since that is the one we are talking about. 

Ms. JACKSON. Right. EPA did not set a health level per se or an 

ambient air quality standard. What EPA did was look at what projections of the changing climate would mean on things like diseases 

that are carried by insects that might now be able to thrive in an 

environment where once there was winter weather that might kill 

them off, or exacerbation of impacts that are weather-dependent. 

So a great example is smog or ground-level ozone, which on warmer days is much, much worse for you and your lungs and causes 

increased morbidity and—— 

Mr. BURGESS. OK. Well, let’s go to the vector-borne diseases, 

since you brought that up. Does the EPA have any peer-reviewed 

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procedures that it uses for assessing the threat from vector-borne 

diseases? 

Ms. JACKSON. What EPA did was use the studies, peer-reviewed 

studies, by those who for a living study vector-borne diseases and 

the incidence and potential incidence of those increasing. 

Mr. BURGESS. And from a numbers standpoint, what is the impact on human health that we are likely to see? 

Ms. JACKSON. Yes, so I think maybe—the endangerment finding 

is—think of it as a weight of evidence, that all these things move 

together, but there are no numbers of people who are going to die 

from vector-borne. There is a belief that it will increase, and that 

will endanger public health, endanger public welfare. 

Mr. BURGESS. Well, let me ask you this. What if the Earth were 

warming but it wasn’t humans that were causing it, it wasn’t 

human-made carbon dioxide, but the Earth were warming and 

these diseases would increase because of the increase in the vectorborne component? Would there be anything we could do about 

that? Would there be mitigating factors that we could bring into 

play? 

And the answer is, of course we could. I mean, none of this stuff 

happens in a vacuum. The fact that we might have more mosquitos 

because the weather is warmer doesn’t mean that we don’t have 

anything else to use to impact that event. Is that correct? 

Ms. JACKSON. Certainly. But that wasn’t the question we were 

answering in the endangerment finding. We were asked whether 

the pollution from greenhouse gases would change our climate; 

and, if so, whether those changes endanger public health and welfare. 

Mr. BURGESS. OK, good. 

Ms. JACKSON. And the answer was an affirmative yes. And—— 

Mr. BURGESS. Great. Well, then how many people have died from 

the effects of elevated carbon dioxide in the last decade? 

Ms. JACKSON. Again, you don’t have to have a number of people 

who have died in order to make a finding of endangerment. If I tell 

you that it is dangerous to jump off a cliff, you don’t have to actually do it to know that that is a dangerous thing. It was a finding—— 

Mr. BURGESS. No, because somebody else has already done the 

experiment and proved the theorem. But can you tell how many 

additional cardiovascular asthma deaths are linked to carbon dioxide increases of 100 parts per million in the atmosphere? 

Ms. JACKSON. I think I have explained to you why that is not the 

analytical approach that was taken. We took the weight of evidence 

approach, as scientists have done. 

Mr. BURGESS. Are you at the EPA doing research on this front 

currently? 

Ms. JACKSON. We do some of our own research. EPA’s Office of 

Research and Development has contributed three reports to the 

U.S. Global Change program. But we also rely on our partners and 

on the peer-reviewed work of scientists. 

Mr. BURGESS. And what are the results of those? 

Ms. JACKSON. The endangerment finding is based on that work, 

sir. 

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Mr. BURGESS. But you cannot provide us with numbers of how 

many people have actually been endangered. 

What about how many people died as a result of a 1 degree Fahrenheit temperature rise over the last 100 years? 

Ms. JACKSON. I understand your point, but I think we are talking 

past each other at this point. You know, I can probably quote what 

other scientists say: that the evidence is that ongoing climate 

change will have broad impacts on society, including the global 

economy and the environment. 

For the United States, climate change impacts include sea level 

rise for coastal States, greater threats of extreme weather events, 

increased risks of water scarcity, urban heatwaves, western 

wildfires, disturbance of biological systems throughout the country. 

And I would add to that the issue of ocean acidification, which 

is certainly not—— 

Mr. BURGESS. Can you quantify the number of human deaths, 

then, from any one of those instances that you just cited? 

Ms. JACKSON. The endangerment finding is based on the premise 

and the belief and, I believe, the scientific fact that the severity of 

climate change impacts will impact negatively public health and 

welfare. And scientists agree that that severity is going to increase 

over time. 

Mr. BURGESS. Then how can you be convinced, as a matter of 

science, that you will be able to reduce the public health risks, and 

hence the number of deaths, from carbon dioxide when you can’t 

quantify those specific impacts? 

Ms. JACKSON. Well, I am convinced of the inverse, which is that, 

as the models show that increasing amounts of emissions of greenhouse gases are going to change the climate, that mitigation is one 

method, mitigation of those emissions is one method of addressing—— 

Mr. BURGESS. Mr. Chairman, I have several more questions 

along this line. I would just like to submit those in writing for the 

record, if the chairman will permit. 

Mr. MARKEY. The questions will be submitted in writing, and we 

would ask the administrator to respond in writing to the gentleman 

from Texas. 

Mr. BURGESS. Thank you. 

Mr. MARKEY. We thank the administrator. 

The chair recognizes the gentlelady from California, Mrs. Capps. 

Mrs. CAPPS. Thank you, Mr. Chairman. 

Administrator Jackson, thank you for your patience. 

And we have heard some of our colleagues today question whether the science of global warming is sound. In particular, some of 

my colleagues allege that e-mails hacked from the Climate Research Unit at East Anglia University cast doubt on the entire scientific field. 

I want to ask you if you have seen the report by the British 

House of Commons Science and Technology Committee, which, and 

I quote, ‘‘found no reason in this unfortunate episode to challenge 

the scientific consensus that global warming is happening and that 

it is induced by human activity,’’ end quote; and the report of the 

independent Scientific Assessment Panel, which concluded that, 

and I quote, ‘‘We saw no evidence of any deliberate scientific malmstockstill on DSK4VPTVN1PROD with 

53 

practice in any of the work of the Climate Research Unit, and, had 

it been there, we believe that it is likely that we would have detected it’’; and, also, the Penn State report clearing Michael Mann, 

one of its scientists, of any misconduct. 

Ms. JACKSON. I have seen both. 

Mrs. CAPPS. Thank you. 

Mr. Chairman, I would like to put all of these reports into the 

record, if I may. 

Mr. MARKEY. Without objection, so ordered. 

Mr. BURGESS. Mr. Chairman? 

Mrs. CAPPS. I have them right here, the scientific reports. 

Mr. MARKEY. OK, we will withhold. I will make the unanimous 

consent request, if the gentleman from Texas would like to look at 

them, and we could then make the unanimous consent request subsequent. 

Why don’t we just hold right now? If you could continue with 

your questions, and we will add back 30 seconds. 

Mrs. CAPPS. All right. Thank you very much. 

My next question: Have you seen the statements by Working 

Group One of the Intergovernmental Panel on Climate Change, the 

University Corporation on Atmospheric Research, the American 

Geophysical Union, the American Association for the Advancement 

of Science, the American Meteorological Society, and the Geological 

Society of America, all of which were issued after the hacked emails and all of which reaffirm the scientific basis for the threat 

of climate change? Have you seen these? 

Ms. JACKSON. I believe I have seen them. 

Mrs. CAPPS. Thank you. 

I would like to enter all of those statements, as well, into the 

record. And, unfortunately, I don’t have copies of them today. 

Mr. Chairman, may I have your consent to enter these records 

that I have just mentioned into the record today? 

Mr. MARKEY. The chair was distracted. Would the gentlelady 

make her inquiry again? 

Mrs. CAPPS. I asked the Secretary—and I don’t want to belabor 

her time. The various statements which I have just enunciated, if 

they could be entered into the record in the same way. 

Mr. MARKEY. Great. Without objection, so ordered. 

[The information appears at the conclusion of the hearing.] 

Mrs. CAPPS. So, Administrator Jackson, in light of all of these 

statements from independent assessments and scientific societies, 

do you believe that it is safe to say that these e-mails do not in 

any way undermine the scientific basis of global climate change? 

Ms. JACKSON. Yes. 

Mrs. CAPPS. Thank you. 

And now that we have made the facts on the science clear, I 

would like to ask some questions about public health and climate 

change. And, as you know, I am a public health nurse, and the connection between our health and climate change is a subject I care 

deeply about. 

I have introduced legislation that would help the American public adapt to the public health impacts of climate change, and it was 

included in the House-passed energy bill. 

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I wondered if you would list briefly, if you can, some of the most 

important investments that you are considering which would ensure that we promote and protect public health by reducing oil dependence. 

Ms. JACKSON. Well, certainly. You know, cars and the burning of 

oil create pollution, not only climate pollution but certainly pollution as well. In fact, one of the, you know, greatest legacies of the 

Clean Air Act are the reduction in NOX and SO2 pollution and particulate pollution through the Clean Air Act. And huge impacts on 

public health—in fact, 13 to 1, $13 of benefits in terms of public 

health to $1 spent. 

So my belief is that, while I am certainly not arguing that any 

one action can achieve all we need, we can see tremendous improvement in public health. 

Mrs. CAPPS. And so there are the monitoring and planning and 

infrastructure education opportunities that have already been in 

the Clean Air Act that you can adapt and use again, continuously 

use. Is that what your Department is doing? 

Ms. JACKSON. Yes. And we are not using all the pieces of the 

Clean Air Act, but certainly bringing Clean Air Act regulations to 

bear. 

Mrs. CAPPS. Thank you. 

I just have a couple seconds left. Let me ask you how EPA is 

working with other Federal agencies to align policies in order to reduce oil dependence. 

Ms. JACKSON. Well, all of our work—the work on the cars rule 

was, you know, closely coordinated with the Department of Transportation. But we work very closely with the Department of Energy, with NOAA, with Interior and Agriculture—all of them, by 

the way, who sat and agreed on the endangerment finding. So all 

of the work we do is through an interagency process that coordinates our work together. 

Mrs. CAPPS. Thank you very much. 

I yield back. 

Mr. MARKEY. The gentlelady’s time has expired. 

And we will ensure that the gentleman from Texas sees the scientific data that the gentlelady has. As a matter of course—— 

Mr. BURGESS. Mr. Chairman, if I might, just with the stipulation 

and the understanding that in the record that is a limited and provisional report and not the final report that has been prepared, as 

I understand it. I am OK with it being inserted as long as there 

is the captioning that it is a preliminary and limited report. 

Mr. MARKEY. I think that is how—would the gentlelady from 

California—is that described as a provisional report? It is not a 

final report? 

Well, let me just say, in general, let’s just—on the second panel, 

there is a witness whose conclusions I do not agree with. And I am 

sure that that witness is going to make a unanimous consent request that all of his analysis be put in the record. I will accede to 

that. It will go into the record, but it will be associated with that 

witness, as any of these reports are identified with the Member 

who is asking them to be inserted in the record at that point. 

So it is not an endorsement by the committee of any of the materials which are put in the record. It is just a further extension of 

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55 

the remarks and the information which that Member wishes to 

have included in the record. And that is just something that we do 

and we honor as a matter of course on this committee as part of 

a courtesy to any Member that has information which they would 

like to have included. But it is then up to each individual Member 

to make their determination as to what weight they wish to attach 

to it. 

Mr. BURGESS. Thank you, Mr. Chairman. With that clear and coherent description, I will withdraw my objection. But thank you for 

providing the information. 

Mr. MARKEY. No, I thank the gentleman. 

And, without objection, the gentlelady’s information will be included in the record. 

[The information appears at the conclusion of the hearing.] 

Mr. MARKEY. And the chair will recognize the gentleman from 

Louisiana, Mr. Scalise. 

Mr. SCALISE. Thank you, Mr. Chairman. 

Administrator Jackson, a couple of weeks ago, I think you were 

in New Orleans talking to a group and were talking about how regulations and rules that your agency issues help create jobs. Can 

you expand upon what you meant with that? 

Ms. JACKSON. I am happy to, but first I have to say ‘‘Who Dat,’’ 

right? 

Mr. SCALISE. ‘‘Who Dat.’’ 

Ms. JACKSON. All right. 

What I was explaining is that the Clean Air Act—and cars are 

a perfect example. The catalytic converter is a home-grown technology, a home-manufactured technology—we exported it to the 

world—to deal with pollution, non-CO2 pollution but pollution from 

car exhaust. It is true of scrubbers or flue gas desulfurization units. 

So what I said was that we have a whole sector of our economy 

that is built around making sure we have clean air and clean water 

and our public health is protected and environmental health is protected. 

Mr. SCALISE. Right. Is there an acknowledgement that some of 

those rules actually cost us jobs? Many companies who are operating by all the rules and doing things the right way, every time 

rules come out, it changes the way that they have to do business; 

people who aren’t doing anything to hurt public health, but just 

people who then become burdened with new Federal rules and regulations that cost them money or, in some cases, have caused them 

to shift jobs overseas, lots of jobs overseas. 

So, while you might think that the rules create jobs, I would 

hope you recognize that some of those rules cost our country jobs 

at the same time. 

Ms. JACKSON. I would certainly stipulate that rules are not free, 

that they have a cost to them, that we have to invest in having 

clean air, that we have to invest in having clean water. And that 

one of the things the laws of our country have said is that the 

American people demand that, that we could grow without any restrictions on pollution. And, certainly, I consider it a part of my job 

to ensure that the rules we put in place are—— 

Mr. SCALISE. But some of this goes beyond pollution, and hopefully I can have time to get into some of that. But right now your 

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agency has a contest going on where, on your Web site, you claim 

that you are going to award $2,500 to somebody who makes a 

YouTube video explaining why rules are important. 

Do you really think, in the times that we are facing right now 

in our country economically, but also with the debt that our country is facing, that it is a wise use of taxpayer money to be giving 

$2,500 of taxpayer money away to somebody to make a video on 

YouTube about why rules are important? 

Ms. JACKSON. Well, I am happy to take a look at that specific 

concern. I didn’t prepare to look at it for this hearing. But if you 

would like—— 

Mr. SCALISE. It is on your Web site. 

Ms. JACKSON. I am not disputing that, sir. I am not disputing 

that at all. What I am saying is that there are lots of things on 

our Web site that are designed to engage the public in the work 

that we do. And so—— 

Mr. SCALISE. Right. Engaging is one thing, but giving away 2,500 

taxpayer dollars is a different story. 

Ms. JACKSON. I am happy to take a look at it for you, sir. 

Mr. SCALISE. So you would consider withdrawing that $2,500 reward. 

Ms. JACKSON. I am happy to take a look at it. That is what I—— 

Mr. SCALISE. Maybe using it to help pay down debt. I would appreciate that. 

When we talk about the hydraulic fracturing process—and Congressman Green had asked you a similar question. I just want to 

make sure that we are correct on this. It is my understanding that 

you had said that you cannot regulate the fracking process without 

a change in law? 

Ms. JACKSON. My understanding is that we can regulate only, I 

believe it is, hydrocarbons or diesel fluid injections right now. 

Mr. SCALISE. Do you know of any examples—and we have a 2004 

report that says that fracking does not contaminate groundwater. 

Do you have any kind of findings that you have done that disputes 

that? 

Ms. JACKSON. Well, I think there has been some important information that has come out lately. States are doing more and more 

investigation of complaints by their citizens that their water is 

being impacted. I think the—— 

Mr. SCALISE. And the States do regulate that right now. 

Ms. JACKSON. Sir, I am not disputing who regulates it. You are 

asking if I am aware. 

Mr. SCALISE. But do you have any reports of—— 

Ms. JACKSON. I am aware of concerns that there has been misleading information about what is going down wells. That might actually have come out of investigations by this committee. I have 

right now complaints before me from folks who say they are concerned and want—— 

Mr. SCALISE. If you can do this, because my time is running out, 

if you can get me a copy of anything you have that would purport 

to dispute that. Because you are doing a—your agency is putting 

a report together right now which—I would hope this Congress 

doesn’t try to do anything to limit the fracking process, especially 

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57 

when there is no finding and no report from your office. So if you 

can get me that. 

On climate-gate and Himalaya-gate and Amazon-gate, you have 

not changed any of your conclusions on which EPA has based 

endangerment findings. What analysis has EPA done that caused 

you to reach that conclusion in light of these scandals that have 

erupted over falsified scientific data? 

Ms. JACKSON. EPA reviewed the allegations as they were made, 

and they dribbled out over a period of time. And, in each case, my 

direction to staff was clear: to review whatever allegations were 

being made to determine whether they change the foundation for 

the endangerment finding. Certainly, that is our obligation to do. 

And, as I said in response to one of the earlier questions, we 

have made a determination, and it turns out that others now agree 

with that—— 

Mr. SCALISE. When did you conduct that analysis? 

Ms. JACKSON. I am sorry? 

Mr. SCALISE. When did you conduct that analysis? 

Ms. JACKSON. As part of the endangerment finding and as the information became available, because some of this has dribbled out 

since. 

Mr. SCALISE. And if you can get me any information you have on 

analyses you have done on climate-gate, Himalaya-gate, and Amazon-gate. 

Mr. MARKEY. The gentleman’s time has expired. 

Mr. SCALISE. Thank you. I yield back. 

Mr. MARKEY. The chair will recognize the gentleman from Washington State, Mr. Inslee. 

Mr. INSLEE. Thank you. 

I wonder if our friends could put up that slide I had earlier that 

talked about this issue of ocean acidification. 

It has been astounding to me that we still hear debate about the 

existence of climate change. And I wanted to ask about what Janet 

Napolitano, who is the leader of NOAA, calls the evil twin—sorry, 

Jane Lubchenco. Excuse me. Thank you. I appreciate that. What 

she calls the evil twin of global warming, which is ocean acidification. 

We used to think it was a good thing that when we burned the 

oil and the carbon dioxide goes into the atmosphere and then it 

goes into solution and the oceans, we used to think that was a good 

thing because it got it out of the atmosphere so it would reduce the 

climate impact. 

But the scientific community is now telling me and the rest of 

Congress that it is an undisputed certainty, with no scientific debate whatsoever, that the carbon dioxide pollution from burning oil 

is now going into the ocean and creating more acidic conditions. 

And it is a scientific fact, I believe beyond dispute—in fact, I 

have never heard anyone in this room dispute the fact—that the 

oceans are now about 30 percent more acidic than they were before 

we started to burn fossil fuels, and that this happens because the 

pollution goes up, goes in the air, falls out of the sky, goes into the 

solution of the ocean and creates acid. 

Now, the scientists that I am talking about, we have some 

neuroscientists in Seattle and they have been doing research, they 

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tell me that this is a certainty. There is just no doubt about this, 

there is no debate about this. No one has really ever challenged 

this conclusion that we are acidifying the oceans because we are 

burning fossil fuels. 

Is that a fair characterization of the science? 

Ms. JACKSON. Yes. I am going to of course yield to Dr. 

Lubchenco. But we have talked about this, and I know it is exactly 

as you describe it, sir. 

Mr. INSLEE. So if I can refer to this photograph, this is a photograph demonstrating what the future looks like. And it is a photograph, again, of a terrapod. These are small plankton, and these 

are the base of the food chain. These are what everything—not everything, but much of what life depends on in the ocean, because 

small fish eat these terrapods by the gazillions, larger fish eat 

them, and eventually the largest fish eat those fish. The whales depend, essentially, on the presence of these terrapods. So these are 

the basis of the entire food chain in the ocean. 

And what the scientists are telling me is that, as the oceans become more acidic, the very basis of the food chain is threatened because these terrapods and many other creatures will not be able to 

exist. For instance, we have not been able to grow an oyster crop 

in the State of Washington for 2 years, probably because of the 

acidification of the ocean. That is not totally clear yet, but probably 

because of that. 

So we have evidence before our own eyes that carbon pollution 

from burning oil has the capacity to actually melt the very basis 

of the food chain. Because what this experiment shows—and, actually, Dr. Lubchenco showed us this experiment in another committee hearing—that if you expose these shells to water that is as 

acidic as it will be in 2100, that the shells actually melt. 

And this has the fishermen concerned where I live in the State 

of Washington, because if you destroy the basis of the food chain— 

this is what salmon eat when they are in the Pacific Ocean. When 

these things are gone, there is no food for the salmon. 

So I guess the question is, is ocean acidification something legitimately to be concerned about from a human health standpoint? Because we get about 15 percent of our protein from the oceans, and 

the food chain appears to be at risk. Is that something legitimately 

to be concerned about, in your role? 

Ms. JACKSON. I do think that it is a legitimate concern and one 

on which the science, like much of climate science, continues to just 

emerge and one that cannot be ignored. 

Mr. INSLEE. And if you were going to—maybe this is getting to 

the personal a little bit, but let me just ask you. When you think 

of the human impacts of carbon pollution, what personally is most 

troublesome to you? 

Ms. JACKSON. Well, you know, I could cite the $2 trillion in global damages that are estimated to occur from a changing climate. 

I think you know, we have talked about the fact that, although I 

do not attribute Hurricane Katrina to climate change, per se, I 

have seen what it requires of this country and its citizens, who all 

pulled together to help my hometown after the kind of catastrophe 

that happened when you saw a very, very severe flood. 

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And to think about our economy, instead of being a productive 

economy, constantly having to respond to catastrophes that are induced by a changing climate over time; when I think of my children 

or my grandchildren spending all their time doing that instead of 

making new things, innovating, and building a better life, I worry. 

And I am very, very concerned. And I think—I know that we have 

an obligation to follow science and do that. 

And the good news of it, which I hoped we would talk about more 

in this hearing, is that we can do it in a way that decreases our 

dependence on foreign oil. It is something no one seems to want. 

I can’t imagine they would. 

Mr. INSLEE. Thank you. 

Mr. MARKEY. The gentleman’s time has expired. 

The chair recognizes the gentleman from Alabama, Mr. Griffith. 

Mr. GRIFFITH. Thank you, Mr. Chairman. 

Thank you for being here. I looked at the clock, and it is 10 after 

12:00, and I know that we would probably prefer to be on the St. 

Charles Avenue trolly headed to the Camellia Grill for some chili 

cheese fries. 

Ms. JACKSON. All right. 

Mr. GRIFFITH. But anyway. 

Ms. JACKSON. Did you go to Tulane? 

Mr. GRIFFITH. Yes, I was there. 

Anyway, did the EPA do its own analysis of the challenge to the 

endangerment reviews? And, if so, I don’t need to know the result, 

but we would like for you to provide us with that. 

Ms. JACKSON. Yes, I did mention that we would provide it. So I 

am happy to get you a copy. 

Mr. GRIFFITH. OK. My other point—and so many of the questions 

have already been asked—is that we, as Americans, represent 5 

percent of the world’s population, maybe 4.5 percent. Does the EPA 

have any responsibility when it regulates to know the economic impact that it has on our economy as it relates to our global competition? Or are we regulating ourselves in a vacuum and, as you mentioned, children and grandchildren, jobs, economy, recognizing the 

population of China and the fact that they are probably not having 

this discussion right now? 

So does the EPA have a responsibility to do a global economic 

impact as it relates to our competitiveness? 

Ms. JACKSON. In general, we do economic impacts on our regulations, but they tend to look at our domestic businesses. 

It is not true to say we don’t care about economic impacts. That 

has been out there for a while. That is not a true statement. But 

we don’t generally look specifically at a foreign business. So many 

businesses now are multinational, that we just look at what the 

impact would be, the cost to our business community. 

Mr. GRIFFITH. I yield back the balance of my time, Mr. Chairman. 

Mr. MARKEY. The gentleman’s time has expired. 

The chair recognizes the gentleman from California, Mr. McNerney. 

Mr. MCNERNEY. Thank you, Mr. Chairman. 

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Administrator Jackson, I want to thank you for coming today. 

You knew it wasn’t going to be an easy hearing, and you have been 

graceful, and I appreciate that. 

My understanding is that the endangerment finding was based 

on a preponderance of evidence supported by recognized scientificbased agencies and organizations. Is that correct? 

Ms. JACKSON. That is a fair statement. 

Mr. MCNERNEY. Could you name a couple of those agencies or organizations? 

Ms. JACKSON. I am happy to. 

In the U.S. Government, the U.S. Global Change program is composed of NOAA and NASA and DOD and Agriculture and Transportation, so all of the folks who are watching these issues from 

various aspects of how they would impact us. 

And then, of course, there are the international efforts. The IPCC 

is named, but the IPCC is really made up of several boards that 

look at various aspects of these issues. 

And then there are additional studies, as well. The National 

Academies did a study that was one that we relied heavily on that 

brought together much of the science, as well. 

Mr. MCNERNEY. Thank you. 

I am also thankful to my friend, Mr. Shimkus, for giving us perspective of global warming deniers, and that perspective believes 

that small changes in chemical composition of a solution couldn’t 

possibly change the physical nature of that solution. So I am 

thankful for the other side for that perspective. 

I have another related question. I represent the Central Valley 

of California, part of it anyway, and it is a great agricultural region. We have terrific crops and export to the entire world. But we 

have air quality problems that cause asthma and other health-related issues. 

I was wondering what impact the endangerment finding and the 

subsequent policy rulings by the EPA might have on public health. 

Ms. JACKSON. The effort to mitigate greenhouse gas pollution— 

which, I should just say for the record one time, I believe is best 

done through legislation, so, obviously, this body has already dealt 

with that question—would, by mitigating and stopping greenhouse 

gas emissions, start to put us on a trajectory to see climate change 

level off. 

There would certainly be some need for adaptation, telling populations that are already seeing changes, as well. So it is a system 

as we level off and stop the increase in changing climate, the heating in the Central Valley and increased droughts, we would—I am 

sorry, and increased impacts on water—we would start to see a 

change. But it is not an instantaneous thing. It is not—— 

Mr. MCNERNEY. But wouldn’t that also have a spin-off of protecting public health, in your opinion? 

Ms. JACKSON. Absolutely. Absolutely, sir. Yes. 

Mr. MCNERNEY. Thank you. 

And I am just going to follow up on what you said. Wouldn’t it 

be true that comprehensive energy legislation would be preferable 

and a superior approach to national security, health, and the economic challenges we are now facing? 

Ms. JACKSON. Absolutely. I join the President in that call. 

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Mr. MCNERNEY. All right. 

And thank you. I will yield back. 

Mr. MARKEY. We thank the gentleman very much. 

And to our audience, we just would like to let you know that 27 

members of the subcommittee have come today, which is just about 

every member of the subcommittee, which is a reflection of the importance of this issue but, you know, has contributed to the length 

of the hearing. And so we apologize to Members for that, although 

the information that we are receiving is invaluable. 

So the chair now recognizes the gentleman from Oklahoma, Mr. 

Sullivan. 

Mr. SULLIVAN. Thank you, Mr. Chairman. I think that is because 

of you, that we have so many here. 

Mr. MARKEY. I would not want to know how many came if it was 

just me. 

Mr. SULLIVAN. Well, again, thank you for being here. I am from 

Oklahoma—— 

Mr. MARKEY. Oh, I apologize to the gentleman. I actually went 

out of order there. 

Mr. SULLIVAN. Oh. 

Mr. MARKEY. The gentlelady from California, with the indulgence 

of the gentleman from Oklahoma, is recognized. 

Mrs. BONO MACK. Well, I thank both the chair and my colleague. 

I hate to have that false start, but also glad to know that I am not 

last and least at the same time. 

But I want to welcome the administrator, as well, and thank her 

for her patience and say that I have an issue that I am hoping that 

you can look into further that is specific, at least now, to southern 

California. 

As you know, southern California has faced extremely challenging air quality issues, and, over time, the region established air 

quality standards in the issuance of permits for those who wish to 

construct or expand infrastructure projects. Those who seek these 

permits include everyone from hospitals, schools, fire, police stations, water projects, small businesses, and the list goes on and on. 

Recently, the EPA was petitioned to try to halt the issuance of 

new permits, even though the State acted with overwhelming bipartisan support on legislation to ensure that these could move forward. 

Given the nearly 15 percent—I am sure much higher, actually— 

but the 15 percent unemployment rate in much of California’s Inland Empire, the importance of providing new job opportunities is 

crucial. In fact, holding up the existing permits being requested in 

parts of southern California will impede the progress of $10 billion 

in projects that will provide tens of thousands of jobs. 

It is my hope that the EPA will reject this petition, as we have 

had the permit program serving areas throughout L.A. and surrounding counties for decades. Our businesses need the certainties 

that they can invest, and our public entities like hospitals must expand to meet the growing needs. Again, it is my firm belief that 

this petition should be rejected, given the high stakes it represents 

for our regional economy. 

Are you able to respond specifically on this matter today, if you 

know personally about it? And if you don’t know, are you willing 

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to work with me to ensure the effects of this petition are seriously 

considered? 

Ms. JACKSON. I am aware of the petition. I don’t have a full briefing. I would be happy to meet with you and discuss it further. Obviously, staff have to review the petition on its merits, but we are 

happy to work with you on that. 

Mrs. BONO MACK. All right. Thank you. It is very, very important. 

But changing back now to the issue at hand, in February you 

testified in the Senate that you would prefer climate legislation 

over regulation of carbon dioxide emissions under the existing 

Clean Air Act. I happen to feel the same way, which is one of the 

primary reasons that I supported the House legislation, as it ensured that the EPA would not move forward unilaterally on a number of fronts, or at least temporarily. 

I recognize that there is a proposed enforcement delay being considered for various sources, but that still doesn’t solve the problem 

that moving forward with regulations under existing statutes will 

be harmful to our economy, whether that is now, in 2011, or in 

2020. 

As you know, California has its own regulatory regime that is 

moving forward, as provided by AB–32. And this leads me to my 

question: Would you support a complete preemption of EPA regulation of greenhouse gases under the Clean Air Act or other existing 

statutes and comprehensive climate legislation? As you know, the 

issue is one of the more clear interstate commerce issues we are 

considering in this committee. And if you don’t support this preemption, can you explain why not? 

Ms. JACKSON. Well, I haven’t seen preemption language from the 

U.S. Senate. There is certainly a bill that passed this body that included some preemption. 

I certainly support the fact that legislation is going to have to 

deal with the tricky question of how to deal with competing State 

and Federal standards and try to harmonize all that, which is why 

I believe we have to have a legislative solution. 

But I also have to say that, in the interim, I believe I have to 

follow the law. And I believe very strongly that the Supreme Court 

decision wasn’t an ‘‘if you feel like it.’’ It was, ‘‘EPA must make a 

finding.’’ And everything we have done since making that finding 

and, in fact, even leading up to it has been about trying to ensure 

that the Clean Air Act unintended consequences are minimized, so 

that you can have a rule for cars that is a good-news story without 

immediately having to regulate other sources that you don’t want 

to. 

Mrs. BONO MACK. Can I just narrow this down? And I don’t 

know that the clock necessarily started when I started, but I appreciate that I still have 31⁄2 minutes. 

Regulate or legislate? I mean, it is not yes or no, but it is close. 

Ms. JACKSON. New legislation that puts a market incentive on 

clean energy is the way to go. What that legislation says is the job 

of Congress and will be, I am sure—— 

Mrs. BONO MACK. But you are saying you prefer that route? I 

mean, that is all I am asking is a simple—that is what—you said 

it before, and I am just asking you to reiterate it right now. 

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Ms. JACKSON. Yes, ma’am. Yes, ma’am. 

Mrs. BONO MACK. OK. 

Ms. JACKSON. I prefer legislation. 

Mrs. BONO MACK. Thank you. And would you support Federal 

preemption of State greenhouse gas regulations? 

Ms. JACKSON. All I can say is I prefer legislation. And the details 

of legislation are to be discussed. 

Mrs. BONO MACK. But this is very simple, especially in your capacity, a very simple question. Would you support Federal preemption of State greenhouse gas regulations? What do you support? It 

is very simple. 

Ms. JACKSON. The administration, the Obama administration, 

has said over and over that we need legislation, that we prefer it. 

But that I do not have the luxury of ignoring the law. And so I, 

as I do my job at EPA—— 

Mrs. BONO MACK. This is a second question from the first. Would 

you support Federal preemption of States? It is not regulate or legislate; it is now Federal or State preemption. 

Ms. JACKSON. I support legislation. And I believe that that is one 

of the issues that good legislation is going to have to deal with. 

And, in the interim, I think I should do my job, which is to uphold 

the Clean Air Act as the Supreme Court has interpreted it. 

Mrs. BONO MACK. All right. Well, I don’t think that is much of 

an answer for me. 

Ms. JACKSON. Well, I also don’t believe that it is an either/or 

question entirely. I also believe very strongly that the Clean Air 

Act can be used to do good things that are entirely consistent with 

legislation. And I think the clean cars rule is a perfect example of 

that. 

Mrs. BONO MACK. Well, it is a simple question, though. In fact, 

if California continues to move the bar, then where does that leave 

Federal legislation or regulation? If California—and as a proud 

Californian, but not necessarily agreeing and not necessarily agreeing that what California does is good for the rest of the country— 

but if California changes their standards, are you saying that we 

should then once again meet California standards? 

Ms. JACKSON. I think the cars rule was a great example of a way 

to make sound and smart legislation. And, in fact, much of what 

happened in the bill that passed this committee and the House 

talks about how to meld the Clean Air Act authorities in with the 

new authorities that would come under legislation. 

So, again, I don’t think I can simply say one or the other, because I think the trick of legislation will be to figure out how to 

put those two authorities together in a way that gets you things 

like the clean car rule. And, yes, California may look at even cleaner cars. And I think, when I spoke to the chairman emeritus, he 

asked me to go back and start thinking about what we are going 

to do for 2017 and beyond. And I think that is a fair question. 

Mrs. BONO MACK. Thank you. 

I yield back. Thank you. 

Mr. MARKEY. OK. The gentlelady’s time has expired. 

The chair recognizes the gentleman from Pennsylvania, Mr. 

Doyle. 

Mr. DOYLE. Thank you, Mr. Chairman. 

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Administrator Jackson, you have been most generous with your 

time, and we have covered a lot of ground, so I really just have one 

question. I want to follow up on something that Representative 

Green talked to you about. 

In my State of Pennsylvania, we are sitting on a vast supply of 

natural gas in the Marcellus Shale. Geologists estimate it could be 

somewhere between 168 and 516 trillion cubic feet. And I get asked 

every day—I know that Representative Green referenced the EPA 

study on the effects of hydraulic fracking on drinking water. And 

we are starting to see a lot of wells go up in southwestern Pennsylvania and throughout our State. So we hear from our constituents 

every day about that. 

So we know there is a study, but could you give us an idea about 

the scope of this study? What all is the EPA looking into with regard to fracking? And when might we anticipate this study being 

made available? 

Ms. JACKSON. EPA recently held a meeting of its Scientific Advisory Board. It is the Federal FACA that advises the EPA administrator on the scope of the study, how best to design a study of hydraulic fracking, primarily to look at potential impacts on drinking 

water, on water. And, of course, that would be, in this case, 

groundwater for the most part. 

And that study, I believe, is now scheduled to not have any results until either late in 2011 or early in 2012. I will double-check 

on the date. I mean, we haven’t quite finished scoping it, so we 

haven’t begun the actual study yet. 

We are designing it to be transparent, to use information that is 

being collected. Many States and localities are getting information 

and complaints on potential issues with respect to contamination. 

And it is being done primarily to serve as a resource to EPA but, 

of course, also to Congress and others, the States, in terms of what 

we know. 

One of the concerns is that there was a 2004 literature review. 

There were no samples taken. That study is widely cited as saying, 

‘‘See, that proves it is safe.’’ And I don’t think that is a fair or accurate summation of that study. I think that is an overbroad reading. 

And so I have said I believe we need to take some more data. 

Mr. DOYLE. Having said that and given the fact that we might 

not have the study until 2011 or 2012, do you think it is wise for 

Congress to consider legislation to regulate hydraulic fracking in 

advance of the completion of this study? 

Ms. JACKSON. Certainly, I would leave the legislative decisions to 

you. And I would certainly say that we will be happy to provide information, as we get it, to Congress in helping to inform your deliberations. 

Mr. DOYLE. Thank you. 

Thank you, Mr. Chairman. 

Mr. MARKEY. Great. The gentleman’s time has expired. 

And all time for—oh, I am sorry. I apologize again to the gentleman from Oklahoma. Mr. Sullivan—— 

Mr. SULLIVAN. That is OK. I am used to it, Mr. Chairman. 

Mr. MARKEY [continuing]. Is recognized. 

Mr. SULLIVAN. Thank you, again, for being here. 

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And, you know, the economy is not doing so well right now. I 

guess we can all agree to that. And unemployment levels are pretty 

high. And why did the administration choose to embark on the 

endangerment finding amidst all this? 

Ms. JACKSON. The Supreme Court ruling, which mandated that 

EPA make a finding one way or the other, was in 2007. As you 

heard, the work had been done under the Bush administration, but 

the White House didn’t open the e-mails. And that really didn’t 

comport with the way I saw my responsibilities as the EPA administrator and, frankly, as the White House, you know, wanted us to 

do our jobs. And so we have moved affirmatively in response to a 

Supreme Court decision that is now 3 years old. 

Mr. SULLIVAN. Well, what analyses were performed to determine 

whether a positive endangerment finding would be beneficial for 

the economy or energy security? Did you do any? 

Ms. JACKSON. That isn’t what the Clean Air Act requires us to 

do. The Clean Air Act requires us to make a determination as to 

whether pollutants—in this case, greenhouse gases—endanger public health and welfare. 

Mr. SULLIVAN. Whether we lose jobs or people—— 

Ms. JACKSON. Well, let me be very clear. Any regulation of a pollutant is certainly done only after an economic analysis. So I do not 

want anyone to think that means we don’t look at the economy. No 

one is more sensitive to the economic impacts of our rules than me; 

I have to sign off on them. 

But I think the clean car rule is a perfect example of the kind 

of smart regulation we can make under the Clean Air Act that reduces our dependence on oil, reduces pollution, and actually helps 

in job growth because the automakers want it so that they can get 

back to making cars. 

Mr. SULLIVAN. Congressman Doyle talked about hydraulic 

fracking. And I think that is a really good method to use. That is 

how we have been able to get over 120-year reserves of natural gas. 

He talked about the Marcellus in his area. That is why they have 

been able to get so much. And I think that helps us from a national 

security perspective but also jobs. And it is American-made energy, 

and we can use it in vehicles, and it burns clean and all of that. 

But are you aware of how many hydraulic fracks have occurred 

in this country since it has been implemented over decades and 

decades and decades? 

Ms. JACKSON. I know it has been used in the oil industry for all 

that period of time. I don’t know—— 

Mr. SULLIVAN. Well, if you are involved in something like that, 

don’t you think you should know, though? 

Ms. JACKSON. Well, we are doing a study specifically because citizens and their representatives have said that they are concerned 

that, as this Marcellus Shale, which is a tighter formation than we 

have been producing natural gas from and which could potentially 

impact groundwater in areas that are quite densely populated, they 

want to know it is safe. And I think that is a fair question. 

Mr. SULLIVAN. You know that much. But also, there have been 

a million hydraulic fracks, over a million hydraulic fracks in the 

United States. Are you aware, since you do know a lot about that, 

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are you aware of any instance where it has ever gotten in the 

groundwater? 

Ms. JACKSON. Well, we have several allegations and concerns 

raised in places like—— 

Mr. SULLIVAN. No, I mean concrete evidence. 

Ms. JACKSON. —Wyoming and Colorado and Pennsylvania. 

Mr. SULLIVAN. As the EPA director, administrator—— 

Ms. JACKSON. But that is why we are doing the study, Mr. Sullivan. 

Mr. SULLIVAN. I know. But, over the decades, has there ever 

been in your research—I am sure you do research and put information together to determine this as you move forward with this 

study. Have you seen any instance in the past, any court case, anyone suing someone, any verifiable evidence—that is what I think 

you have to go back towards—to see if there is any precedent that 

shows that this—— 

Ms. JACKSON. No, but I would say that we have seen cases where 

people have raised concerns and we haven’t been able to say conclusively ‘‘absolutely not.’’ And that is why, rather than saying, 

‘‘Take our word for it,’’ we are saying, ‘‘Let’s do a study; we will 

involve the industry in it, but—— 

Mr. SULLIVAN. What if I raise concerns I think that this 

endangerment finding could be detrimental to our economy, sending jobs overseas, losing jobs overseas; would you address my concern in that? 

Ms. JACKSON. We did an 11-volume copy to address concerns. 

Mr. SULLIVAN. There are a lot of Americans concerned about this 

legislation, this endangerment finding, and that they will lose their 

jobs. I mean they are concerned about that, especially my district 

where I have 100,000, 300,000 some-odd people working in the energy industry. They are scared to death. This is, I believe, an attempt to curtail that business. But I think that if we have a million 

of these facts and they are willing to list all the things that are 

used, mainly water and sand, but any chemical that is used listed, 

what is the problem? A million; I mean, that is pretty good data 

to use in your study. 

Ms. JACKSON. Well, we have already seen a couple of cases where 

we can’t get the data because it is confidential. So we don’t have 

all the chemicals that are being injected in the wells. 

Mr. MARKEY. The gentleman’s time has expired. 

Mr. SULLIVAN. Thank you, I do appreciate being here. 

Mr. MARKEY. All members of the subcommittee have asked questions, and I am sure everyone remembers vividly the unanimous 

consent request which I made 3 hours ago that Mr. Latta, if he appeared as a member of the full committee, would be allowed to ask 

questions of our witness. 

The gentleman from Ohio is recognized for that purpose. 

Mr. LATTA. I appreciate the chairman’s graciousness and unanimous consent and for being around to participate here today. 

Thank you very much. And also to our ranking member, thank you 

very much for allowing me to be here. And I appreciate the opportunity, Administrator, to—I think last time we had a discussion 

was on transportation infrastructure. 

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But kind of to give a background again, I represent the largest 

manufacturing district in the State of Ohio and also the largest agricultural district. It is kind of an interesting vein that I run on. 

And Ohio, with our neighbors just to my west Indiana, we get 87 

percent of our energy is coal-based, and Indiana 94 percent coalbased. And the reason I always bring up Indiana because I run 

halfway down the State of Ohio, along the Indiana line, so I have 

a lot of people working in Indiana and vice versa. 

As we are talking about the cap-and-trade legislation, especially 

as it is being renewed over in the Senate, as we are looking at it, 

how would this legislation benefit the farmers and the manufacturers and the citizens of my district? Because, again, when we look 

at the cost that is being associated with coal, what do I tell my 

folks back home? Because, again, I also have areas in my district 

that had over 18 percent unemployment because it is on the manufacturing sector. 

Ms. JACKSON. Well, I am not going to speculate what the legislation in the Senate says because I haven’t seen it yet. I can very 

briefly answer the question with respect to the legislation, for example, that passed this committee in the full House. And that is 

that because agriculture was exempt from much of the regulated 

activities, the activities, the agricultural industry would be able to 

use many actions like no-till farming as credits, as offsets. So there 

was actually an opportunity for farmers to make money off of decisions they would make about whether to keep acreage in agriculture or forests or how they tilled. I am certainly not an agricultural expert, but the opportunities were certainly there, I have 

heard Secretary Vilsack speak of them. 

Mr. LATTA. Now briefly, no-till—a lot of our folks back home had 

gone to no-till, but a lot of them now are going out of no-till, because it is different ways of crop production that they are in right 

now. In some areas they find it is not conducive; they will always 

be in the no-till situation. So on a situation with credits there 

wouldn’t be a lot of benefit. 

But we are looking at the unemployment rates, like I said, we 

have in our district. It is very, very difficult to attract jobs at this 

stage of the game out there to our area. Now, we have had some 

good news in the last week with some companies that are going to 

be expanding right now, but our fear out there as, I talk to people, 

there is a lot of angst especially on the business sector, small business or large business. It is kind of interesting, my businesses I 

have in my district go from either very, very large, from stamping 

plants all the way down to your mom and pop and tool and die 

jobs. A lot of folks out there I have talked to are very, very fearful 

about getting into increasing production or hiring people right now, 

because they just are very fearful of what could happen on the legislation right now. 

Again, as we do this and talk about this, it is folks back home 

that we talk to. But again it is highly, highly manufacture, again, 

in my district and folks are just very, very concerned. 

Ms. JACKSON. Thank you. And I do appreciate that concern. I 

want you and them to know that that is something that I think 

certainly all of us as policymakers have to be quite sensitive to, the 

state of our economy. I certainly am. I do believe that to replace 

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those manufacturing jobs, you need sectors to put them in. The 

ones that have gone, and gone overseas, when you ask yourself 

what we can be manufacturing, I think the clean cars of the future, 

clean energy, renewable energy. The President has talked about 

huge investments in nuclear power, and he also certainly talked 

about domestic energy resources. All of those are opportunities to 

replace those jobs. All of those are the kind of clean energy jobs 

that so many of us believe are part and parcel of this revolution. 

Mr. LATTA. Let me ask, we were talking about on the manufacturing side, again, with the Chinese and Indians out there right 

now, because there is a lot of talk that they are not going to go 

down this path, and that is who our competitors are going to be. 

Again, the fear out there is that they will put us at an unfair disadvantage on the manufacturing side. 

But just coming off of the Budget Committee one of the things 

we have out there—thank you very much, Mr. Chairman, I yield 

back. 

Mr. MARKEY. No, I appreciate the gentleman. Thank you for your 

patience as well in waiting for the end of the hearing. 

Actually in the legislation, the Waxman-Markey bill, we exempt 

the agricultural sector from regulation, while providing opportunities are offset income; that is, it could be generated by practices engaged in by the farming community. So the exemption from being 

covered, combined with the economic opportunity of these new agricultural practices being adopted, we think makes it something that 

should be viewed by the farming community as a great opportunity. 

But we thank the gentleman for coming, and we also note that 

Ohio is now in the lead as a new solar technology manufacturing 

base for America. They have taken over the lead, so we are grateful 

for that as well. 

So we thank you, Madam Administrator. You did a marvelous job 

here with our committee today, and I think all members will say 

that they are impressed with your comprehensive knowledge of this 

subject. 

And again, I just want to restate the Supreme Court of the 

United States mandated that the EPA had to make a determination on this endangerment issue and that the Bush ERA sent arguably the most important climate e-mail of all time to the Bush 

White House, making this finding of endangerment, but that Dick 

Cheney was in denial and refused to accept the e-mail; which then 

necessitated you and the Obama administration having to go 

through that whole process again in order to make a determination, which we are now dealing with, but it is legally mandated by 

the Supreme Court of the United States. 

So it is I think it is helpful for us to know that, and to also know 

that on the decisions which are already made in conjunction with 

the White House, that any reversal of that would be objected to by 

the United Auto Workers and by the automotive manufacturers of 

the United States. And I think it is important for all of that to be 

out here and on the record. 

But we can’t tell you how much we thank you for your appearance, how much we admire the work that you do, and we look formstockstill on DSK4VPTVN1PROD with 

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ward to seeing you and your work here in the future. Thank you 

so much. 

Again, we apologize to the second panel. It was an incredibly distinguished panel. It actually should have its own day at 9:30 in the 

morning, with all the members here. Nonetheless, we are going to 

go right to it, and we know that members will return to participate 

in this hearing as well. 

STATEMENTS OF FRED SMITH, CHAIRMAN, PRESIDENT AND 

CHIEF EXECUTIVE OFFICER, FEDEX CORPORATION; JASON 

WOLF, VICE PRESIDENT FOR NORTH AMERICA BETTER 

PLACE; ROBERT DIAMOND, FORMER LIEUTENANT, U.S. 

NAVY, SECURITY FELLOW, TRUMAN NATIONAL SECURITY 

PROJECT; AND CHARLES DREVNA, PRESIDENT OF THE NATIONAL PETROCHEMICAL AND REFINERS ASSOCIATION 

Mr. MARKEY. If the witnesses could take their seats we will begin 

by hearing from Mr. Fred Smith. Fred Smith is the Chairman, 

President, and CEO of Federal Express. He founded FedEx in 1971 

and he has recently become one of our Nation’s most important advocates for vehicle efficiency standards and for a national energy 

policy. 

Mr. Smith also serves as a member of the Electrification Coalition and as cochairman of the Energy Security Leadership Council. 

The Council brings together business and military leaders in support of a comprehensive long-term policy to reduce U.S. oil dependence and improve energy security. 

Mr. Smith, we are honored to have you here today and we welcome your testimony. 

STATEMENT OF FRED SMITH 

Mr. SMITH. Well, thank you very much, Mr. Chairman. I submitted testimony for the record. I am just going to make a few 

summary remarks. 

Mr. MARKEY. Without objection, so ordered. Your written testimony will be included in the record. I think you might have to turn 

on your microphone. 

Mr. SMITH. Oh, sorry. Excuse me. 

As you mentioned, Mr. Chairman, I am the CEO of FedEx Corporation, which employs about 300,000 people in our four major operating units: Federal Express, FedEx Ground, FedEx Freight, and 

FedEx Office. We operate 670 airplanes, over 70,000 vehicles. We 

deliver through our networks almost 8 million shipments a day. So 

we have been extremely interested in the issue of energy consumption and energy independence. And as you mentioned I cochaired, 

with General P.X. Kelley, the Energy Security Leadership Council, 

which produced a series of recommendations, many of which were 

incorporated in the 2007 act. And from that work came the Electrification Coalition, which is a group of companies which have significant interest in the matter of electrifying short-haul transportation in the United States. 

The reason that we got involved with the Electrification Coalition 

after the work that the Energy Security Leadership Council did is 

because we came to the conclusion that it was the most promising 

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single area to reduce United States dependence on imported petroleum, and has been widely discussed here in this committee. 

We use about 20 million barrels of oil a day. We import now almost 60 percent of our oil. It was 30 percent when the first air embargo took place in 1973. And absent some significant change in 

our energy profile, we will continue to be subject to highly volatile 

energy prices like we experienced in the summer of 2008 when a 

barrel of oil went for $147 a barrel. And though it has come down 

today, it is still over $80 a barrel, and the potential for economic 

and national security challenges is very great because of that. 

We are very confident that the electrification of short-haul transportation, including in our industry sector, is very real, not the 

least reason of which I came over here today in a new FedEx Express, zero-emissions, electric-powered vehicle. It was made by JD 

of Modec, a European company which has supplied us 15 of these 

vehicles in Europe; and Navistar in Illinois; and the batteries are 

produced by A123 in Michigan. The vehicle has about a 100-mile 

range, has very low operating economics. 

The issue is simply the capital cost of the vehicle relative to conventional vehicles. We feel very strongly that the price of these batteries, contrary to some other people who have looked at the matter, are going to come down. And in fact we believe in the next 2 

to 5 years, the price of these lithium ion batteries will be at least 

be halved, and significantly more energy production per unit of 

density as well. 

So we think for the industrial sector in which we operate, as well 

as personal short-haul transportation where the vast majority of it 

is conducted with less than 40 miles of utilization per vehicle per 

day, should be a national goal. 

We have laid out a series of recommendations in the report of the 

Electrification Coalition which we commend to the committee. It 

has an enormous payback for the Nation. It significantly reduces 

our need to import petroleum by millions of barrels per day. 

The scholarship has been verified by the University of Maryland, 

and we believe that it is a very promising area. And I think I will 

stop there, if it is acceptable to you, and answer questions or wait 

until after the other testimony. 

Mr. MARKEY. Thank you, sir, very much. 

[The prepared statement of Mr. Smith follows:] 

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Mr. MARKEY. Our next witness is Jason Wolf. He is the Vice 

President of North America, Better Place. Mr. Wolf is responsible 

for overseeing the company’s electric vehicle efforts in California, 

Hawaii, Ontario, and other developing North American markets. 

We thank you, sir. 

From 1986 to 1993 he served as an officer in the Israeli military, 

a country notable for having no oil. And so, obviously, there is an 

imperative from the national security perspective to find a solution 

to that problem, and technology is the answer. 

So we welcome you, Mr. Wolf. Whenever you are ready, please 

begin. 

STATEMENT OF JASON WOLF 

Mr. WOLF. Thank you. And my text says good morning, but I 

guess we ran a little late. So good afternoon, Chairman Markey, 

Ranking Member Upton and committee members, whoever is left. 

My name is Jason Wolf. As you said, I lead Better Place, North 

America. 

Mr. MARKEY. Mr. Wolf, you still have your C–SPAN audience, so 

do not assume that—— 

Mr. UPTON. Twenty-five million people. 

Mr. WOLF. No pressure. 

So Better Place is the global leader in electric vehicle networks 

and services, and our mission is to end dependence on oil. 

Thank you for the opportunity today to come and speak about 

how we can solve the U.S.’s dependence on oil by leading a global 

transition to electric vehicles and why it is imperative to do so 

right now. 

Two years ago our founder, Shai Agassi, was here; came before 

Congress, and described a choice for our country between continued 

reliance on a single strategically vulnerable source of energy that 

fuels, as people said to you, more than 95 percent of our transportation and an imminently feasible alternative path of rapid transition to electric vehicles. 

Sadly, 2 years later, the U.S. remains paralyzed at the same 

juncture, while the rest of the world in many places are making 

tremendous progress towards electrification. For example, as you 

mentioned, Israel 2 years ago made a national commitment to end 

its commitment on oil. And since, there have been more charge 

spots installed for electric vehicles in Israel, a small country, as 

there are in the entire U.S. Over these 2 years. 

China plans to leap-frog the combustion engine directly to electric vehicles, and what we are seeing is that electrification is not 

only a solution, it is the only plausibly possible solution that is accepted across the board. But even more importantly, electrification 

is now globally inevitable. 

The question before you today is will the U.S. lead this inevitable 

transition or will we land behind China, France, Japan and other 

committees in capitalizing on this commercial opportunity. 

Better Place’s business model really enables mass production of 

electric vehicles by removing the three key barriers of high cost: 

limited range and compromised convenience. As a validation of that 

business model—and it is not the only one—we have raised over 

$700 million in the last 2 years from private investment. We 

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partnered with Renault to deliver at least 100,000 vehicles in 

major markets around the world; and we have established operations in countries around the world, not only Israel, Denmark, but 

also Australia, the U.S., Canada, Japan and, recently, China and 

France. 

Just this last week we announced collaboration with Cherry 

Automotive, which is the largest auto independent manufacturer 

and exporter. This past Monday, we launched a taxi demonstration 

in Tokyo with switchable EVs that are working around the clock. 

What this shows us is that this inevitable transition to EVs means 

for the automotive industry that their future is settled. The next 

vehicle will be driven by electricity. 

So the question is no longer if, but how fast will this transition 

to EVs take, and who will lead the transition? What is critical to 

understand and what we are seeing around the world is that governments have made a conscious choice towards electrification. The 

primary motivations for each country differ, from oil independence, 

to automotive industry leadership, to integrating renewable electricity into the grid. But the conclusion is the same. Electrification 

enables all these benefits if done correctly at scale. 

Let’s talk about how the U.S. can lead. If the U.S. was able to 

reflect the true cost of gasoline, private capital would no doubt flow 

to mass transportation solutions as were seen elsewhere. But we 

have not been able to do so as a country, so the only way forward 

is to make clear national commitment to electrification. 

First, set an explicit national electrification policy to signal the 

market and provide clear direction towards the massive option of 

EVs. 

Second, invest in regional EV ecosystems with the goal of catalyzing mass market deployments that address the three barriers I 

mentioned. 

Finally, continue to fund consumer and fleet EV purchases. And 

these should be done through the year 2015. As a country, we can 

wean ourselves off oil dependency at a fraction of the 440 billion 

we export every year. 

I thank you and look forward to working with you to put the U.S. 

in the lead on what we think is an inevitable transition to electric 

vehicles. 

Mr. MARKEY. Thank you, Mr. Wolf, very much. 

[The prepared statement of Mr. Wolf follows:] 

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Mr. MARKEY. Our next witness is Mr. Robert Diamond, a Security Fellow at the Truman National Security Project. He is a 

former lieutenant in the United States Navy, and completed deployments in support of Operation Iraqi Freedom and Operation 

Enduring Freedom. We welcome you, sir. 

STATEMENT OF ROBERT DIAMOND 

Lieutenant DIAMOND. Thank you, Mr. Chairman. And I respectfully request to submit my written testimony for the record. 

Mr. MARKEY. Without objection, so ordered. 

Lieutenant DIAMOND. Chairman Markey, Ranking Member 

Upton, members of the committee, I am deeply honored to have the 

opportunity to appear before this panel to discuss the critically important topic of promoting clean energy policies that will reduce 

America’s dependence on oil and the impact that dependence is 

having on our national security. 

America’s reliance on oil is our Achilles heel. I fundamentally believe that a comprehensive strategy, one that cuts our addiction to 

fossil fuels, boosts clean energy technology, and moves our Nation 

dramatically towards energy independence is vital to our national 

security, the safety of our men and women in uniform, and to the 

fight against terrorism. The bottom line is this: We must put America in control of the energy future. 

I make these arguments before you today as a fellow citizen, 

deeply concerned about ensuring the future prosperity and security 

our country. 

I am a Security Fellow with the Truman National Security 

Project and have been deeply engaged in the debate about our energy security. And I am a veteran in the United States military, 

having served as an officer in the Navy for 7 years. 

In 2004, I deployed to the northern Arabian Gulf. My ship, a 

guided missile destroyer, was assigned a mission of defending two 

Iraqi oil terminals just off the southern coast of that country. These 

two terminals are the economic crown jewels of that country, with 

90-plus percent of Iraq’s oil flowing through them onto supertankers to take that oil to the global market. 

It was no secret that these terminals would be prime targets for 

an insurgent attack. In April 2004, the attack came in the form of 

the wave of two suicide boats. We lost two U.S. Navy sailors and 

one U.S. Coastguardsman, as well as four other service members 

who sustained serious injuries. The oil terminals, however, were 

safely defended. 

I tell this story because it speaks directly to why we are here 

today. At the very core of my wartime deployment was an energy 

security mission. Brave sailors and coastguardsmen gave their lives 

defending a global oil infrastructure half a world away. My experience is just a recent chapter in the U.S. Military’s decade-long role 

of defending our global oil supplies, and I am not alone in feeling 

this way. 

Over the course of the last year, I have been part of a national 

coalition of hundreds of veterans, called Operation Free. These veterans have criss-crossed the country by biodiesel powered bus, over 

25,000 miles, with one simple message: Secure America with clean 

energy. 

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Retired Vice Admiral Dennis McGinn captured the national security dangers of our addiction to oil in testimony he gave before the 

Senate last year. He said in 2008 we sent $386 billion overseas for 

oil, much of it going to nations that wish us harm. 

This is an unprecedented and unsustainable transfer of wealth 

to other nations. It puts us in the untenable position of funding 

both sides of the conflict and directly undermines our fight against 

terror. 

Former CIA director Jim Woolsey explains it this way: Except for 

our own Civil War, this is the only war that we have fought where 

we are paying for both sides. We pay Saudi Arabia $160 billion a 

year for its oil, and 3- to 4 billion of that goes to Wahabbis who 

teach their children to hate. We are paying for these terrorists with 

our SUVs. 

A Truman project colleague of mine conducted an analysis which concluded that for every $5 rise in price of crude oil, Putin’s Russia 

receives more than $18 billion annually; Ahmadinejad, Iran, an additional $7.9 billion annually; and Chavez’s Venezuela an additional $4.7 billion annually. 

This is clearly not in our national interest. No one is more acutely aware of this problem than the Department of Defense, and they 

were actually leading the efforts on breaking our dependency on 

oil. DOD is the largest energy consumer in the Nation, and our Nation is the largest energy consumer in the world. 

For example, the Navy has set ambitious goals for shifting the 

fleet to renewable energy sources. Just last week on Earth Day, the 

Navy successfully conducted the first flight test of the Green Hornet, an SA–18 Super Hornet fighter jet that is still using a 50/50 

blend of conventional fuel and biofuels. This test was the first step 

in achieving Secretary Mabus’s goal of sailing by 2012 the Great 

Green Fleet, a carrier battle group entirely powered by sustainable 

renewable fuel sources, including nuclear power. But that is just 

the military. 

When it comes to the rest of our Nation, frankly we are simply 

not doing enough. Congress must act. Without legislation from 

Congress too many sectors of our economy and our country will 

continue to stagger along, using the dirty fuels of our past. This is 

not a problem that can wait for future generations to solve. It is 

imperative that you, our elected officials, solve this problem now 

and enact comprehensive clean energy legislation that will put 

American power back to work. 

Part of that solution also involves making sure that our regulatory agencies like EPA continue to have the tools and authority 

necessary to drive this transition to a clean energy economy. It 

makes no sense to me to deny these agencies the robust regulatory 

authority they need. Doing so is the equivalent of pulling your 

troops off the battlefield before the reinforcements arrive; in other 

words, it is surrendering the fight. 

I close with this simple request: Help us build a new clean energy economy. It will make our country more prosperous, it will 

help make us more secure, and, once and for all, put America back 

in control of the energy future. Thank you, Mr. Chairman. 

Mr. MARKEY. Thank you. 

[The prepared statement of Mr. Diamond follows:] 

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Mr. MARKEY. Our final witness is Mr. Charles Drevna, the President of the National Petrochemical and Refiners Association. He 

has served as its president since 2007. We welcome you, sir. 

STATEMENT OF CHARLES T. DREVNA 

Mr. DREVNA. Good afternoon, Chairman Markey, Ranking Member Upton, and the rest of the committee. I really appreciate the 

opportunity to be here to testify on such critical issues. While the 

title of this hearing is ‘‘Clean Energy Policies that Reduce our Dependence on Oil,’’ I respectfully suggest that you focus on affordable and economically sensible clean energy policies. 

Such policies should favor getting more energy of all types from 

the United States and from reliable sources abroad. With the level 

playing field, the best, most efficient, and most effective forms in 

energy will triumph in the marketplace. That means the form of 

energy that delivers the BTU at the lowest economic cost will win. 

Most economists believe that oil and oil-based products provide 

the winning form of energy for many of our needs today, particularly for transportation. We and the rest of the globe will continue 

to rely on petroleum-based transportation for much of this century. 

We rely on petrochemicals that are the vital ingredients in thousands of products today and far into the future. Some people believe we can end our reliance on oil by simply saying that is what 

we want to do. They embrace our energy sources like starry-eyed 

lovers seeing perfection and ignoring the flaws. Unfortunately, 

there is no miracle source of energy that is clean, affordable, and 

abundant with no downside. If such a source existed, our Nation 

would have embraced it long ago and we would all be using it 

today. 

Those who say the United States must show leadership on climate change and related issues are absolutely correct. But we have 

to lead intelligently to find the way of a bright and prosperous energy and economic future. Leading recklessly in the wrong direction, based on homes and dreams rather than reality, is a plan for 

failure. We don’t want to make a headlong rush into disaster modeled after Pickett’s Charge. 

America is the land of ideas and freedom and has long been the 

world’s leader in innovation. The government has oftentimes served 

as a catalyst to stimulate new inventions and new processes. But 

government leaders have been wise enough to step aside to give 

private sector entrepreneurs the freedom to transform these good 

ideas into reality. When governments have tried to pick economic 

winners by handing out ill-advised and usually expensive subsidies 

funded by taxpayers, the kind of subsidies some forms of energy depend upon today, the cost has far outweighed the benefits to their 

citizens. 

Thomas Edison literally electrified the world because of the tremendous benefit his light bulbs brought, not because he got funding on a tax on oil lamps, candles, or fireplaces. Alexander Graham 

Bell succeeded because his telephone revolutionized communications, not because government gave him cash generated by a stamp 

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sidies paid for by taxes on telephones, typewriters, pens or other 

printed publications 

NPRA members embrace a future where the best ideas and the 

best products triumph in a free and fair competition and they embrace change. They are not against green jobs. They want to continue to provide jobs that are well-paying, long-lasting, and 

strengthen our Nation’s economy. 

The operators of refineries and petrochemical plants want to 

keep their U.S. manufacturing operations and manufacturing by 

others in our country strong and thriving. In addition, we recognize 

a global climate change must be addressed globally. If the Environmental Protection Agency tries to regulate greenhouse gases in our 

Nation through the Clean Air Act, it risks inflicting a crippling 

blow to our economy. Many American manufacturers will take your 

jobs and move to foreign nations to escape carbon limits that limit 

their growth, their productivity, and their profitability. Those foreign facilities, many with emission controls far less stringent than 

ours, will generate greenhouse gases that go into the atmosphere 

shared by every Nation on Earth. The end result: No reduction in 

global carbon emissions and all gain, no pain, for the American 

people. 

For the refining and petrochemical industries, the question that 

Congress must now ask itself: Do we want gasoline, diesel fuel, and 

plastics and other products to continue being manufactured in the 

United States, or do we want this manufacturing outsourced so 

that we increase reliance on foreign sources of supply. 

I don’t believe Congress wants to overtax and overregulate the 

domestic refining and petrochemical industry, or any other industry, into extinction. But overzealous policies could lead to disastrous effects and become a self-inflicted wound as our country tries 

to struggle to climb out of this recession. That would be an American tragedy that I ask you help avert. 

Thank you for allowing me the opportunity to testify today, and 

I look forward to any questions that you may have. 

Mr. MARKEY. OK, the gentleman’s time has expired. 

[The prepared statement of Mr. Drevna follows:] 

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Mr. MARKEY. The chair now recognizes the gentleman from 

Washington State, Mr. Inslee. 

Mr. INSLEE. Thank you, Mr. Drevna. What I want is the electric 

cars to be built here and not just in China. I am overjoyed to see 

the opening of the first manufacturing plant of lithium ion batteries in Holland, Michigan, which is going to open with Johnson 

Controls this fall, due to the Federal policy that we adopted in the 

stimulus bill this February. 

I am also overjoyed to tell you that on Earth Day, the 40th anniversary, I got to drive the first production model of the Chevrolet 

Volt which we manufactured in America. It is a plug-in car. You 

plug it in, you go 40 miles on total electricity, which would cover 

60 percent of all our trips on an average American day. 

The Ford Focus under Alan Mulally’s leadership is coming out in 

a while. Having driven that car, tremendous acceleration. If you 

want to drive a rocket, drive the Tesla. And if you want a car that 

is on the market right now, the Renault Leaf. There are great 

things happening. We just have to make sure it happens here and 

not in China. 

Mr. Wolf and Mr. Smith, I want to ask you about sort of what 

you see as the slope of technology and cost associated with electric 

drivetrains. We know every technology has a path it goes on where 

we get better technology and decreasing costs. And I would just 

like to address what you foresee in electric drivetrains in the next 

couple of decades as far as costs. Mr. Wolf—you guys decide who 

starts. 

Mr. WOLF. I will start, actually. Mr. Smith mentioned one thing 

in his remarks about the cost of the batteries. The cost of the battery in the electric vehicle is the most expensive component, 30 

percent; 50 to 60 percent in the higher, bigger truck-type deployment. But what we are seeing today is, if a year ago or 2 years ago 

people were talking about $1,000 per kilowatt hour—that is how 

they measured the density of the energy—those prices are already, 

2 or 3 years later, in half. And the projection by DOE, not ourselves, is to $350 and below. 

Mr. INSLEE. Mr. Smith, you are a hard-headed businessman. 

What do you think of those projections? 

Mr. SMITH. We concur. The vehicle that I drove over here today, 

and which is all electric, as I mentioned built, by Navistar with the 

123 battery, about 70 percent—is that right—about 70 percent of 

the cost is the battery. It is a very sturdy industrialized vehicle so 

there is no issue with the vehicle. We have been operating similar 

vehicles in Europe for a couple of years. 

We also operate 300 hybrids which we develop. It is just simply 

a cost of the batteries, and our guess is that in the next 2 to 5 

years the cost of the batteries will come down, just as Mr. Wolf 

said. And at that point in time, that vehicle will be very cost-effective on a straight ROI basis. In other words, you will be able to 

afford it without any other incentive other than the fact that the 

reduction in fossil fuel consumption and the low maintenance cost 

of the vehicle will drive you to buy it. 

Mr. INSLEE. Thank you for your leadership. Mr. Drevna, I wondered if you could put up the picture of the Terrapods again. I appreciate it. 

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I want to ask an issue of Mr. Drevna about ocean acidification. 

Mr. Drevna, you represent the National Petrochemical and Refiners Association. There are a lot of great people who work in your 

organization; hardworking, diligent Americans. We respect their 

work. 

But I want to ask you about the consequences of our burning of 

oil, for our oceans specifically. The scientific community that I am 

talking to are telling me that when you burn oil, carbon dioxide 

goes out of your tailpipe; it goes into the atmosphere and into the 

oceans and into solution in the oceans. And when it goes into solution in the oceans it makes acid. And the scientific community that 

I have talked to said it is scientifically, absolutely clear, with zero 

doubt, that our oceans are 30 percent more acidic than they were 

before we started to burn fossil fuels, and that there is a likelihood 

of disruption in certain critters of the sea that could be very, very 

significant. 

We had a picture I showed earlier of what happens when you expose the very base of the food chain. It melts, because the waters 

are becoming so acidic by the year 2100. I guess the question is: 

Does your industry recognize ocean acidification as a problem, and 

do you agree that the science is clear in this regard that carbon dioxide does acidify the ocean, and it comes in part from your industry? 

Mr. DREVNA. Mr. Inslee, I am not a climate scientist and never 

portrayed myself as one. What I am discussing today is what we 

have to do in, I believe, a systematic approach on energy policy. I 

think the question has to be asked. And I could maybe categorically 

state if this were a Lower 48 climate problem, perhaps some of 

these things that we are talking about today would be beneficial. 

It is a global—my understanding is it is global climate. 

My understanding also is that in EIA projections between now 

and the next 4, 5, 6 decades, the globe is going to continue to be 

dependent upon fossil fuels, including petroleum, to a great extent. 

Our position is, let’s look at what makes economic sense for the 

country. 

I have described our energy policy here in the United States as 

a children’s soccer team. We look at the energy source de jour, and 

we all gather around that. And 5 or 6 years ago, it was hydrogen; 

then it was ethanol. 

Hey, the electric vehicle, all these things have benefits; but let’s 

do it in a systemic, economically viable way and not rush to get 

ourselves off on something the rest of the world is going to do, to 

our economic detriment. 

Mr. INSLEE. Thank you. If you hear anything different than all 

the best of the world scientists, let me know because I think we 

have got a problem. Thanks. 

Mr. MARKEY. The gentleman’s time has expired. 

The chair recognizes the gentleman from Michigan, Mr. Upton. 

Mr. UPTON. Thank you. Mr. Smith welcome, nice to see you 

again. I am cochair of the Auto Caucus, second largest caucus, a 

bipartisan caucus, and I am a very strong supporter of electric hybrids. And for me—I stepped out briefly to talk to the president of 

Western Michigan University. He was in town, really on this issue 

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gan University do is they have begun to transform their utility 

fleet in fact to electric vehicles. They have their own power plant 

in Kalamazoo, they charge them up at night. They are perfectly 

quiet. I think they operate, as I recall, at about 2 cents a mile 

versus the old costs. Obviously they are perfectly quiet; they are 

able to do all of the activities within the campus, and it is a sizable 

campus. And the cost for these new vehicles was almost the same— 

meaning the initial cost, purchase price—as the older vehicles that 

they replaced. 

I am also very fortunate to have Eaton in my district, a very 

large truck engineering firm in Galesburgh, Michigan, just outside 

of Kalamazoo. I have gone to see their electric hybrids and what 

they want to do with the utilities, so you don’t have to have the 

vehicle with the arm up as they are fixing the wires—or whatever 

it is that they are doing—running on that diesel all the time. It has 

got the hybrids and it is significant savings, but the cost is higher 

per vehicle. 

Mr. Smith, you have indicated about, what, 15 vehicles, electric 

hybrids, that are now within your operation? 

Mr. SMITH. We have 15 all-electric, but—— 

Mr. UPTON. I know you have a zillion vehicles. 

Mr. SMITH. We do have over 70,000 in our operation. But I am 

not sure you are aware of this; that the hybrid that you mentioned 

in Eaton was developed in partnership with FedEx. 

Mr. UPTON. I have seen them. 

Mr. SMITH. We have about 300 of those in service. We have one 

of our express pick-up and delivery locations in the New York City 

area which is completely hybrid. They are very—— 

Mr. UPTON. The range is 100 miles; is that right? 

Mr. SMITH. The all-electric is a hundred miles. The hybrid electric is the same as the conventional powered vehicle. We get about 

40 or 50 miles on the electrical charge, and then you use the conventional engine. The problem with the hybrid that we are just discussing is the capital costs, because you in essence have two power 

plants reciprocating. I mean, internal combustion and electric make 

the capital cost very difficult to overcome unless the price of diesel 

is up in the $5–1/2 area. 

The all electric, on the other hand, which would be obviously 

shorter range, the one I came over in here today, has about a 100- 

mile range. But presumably if the battery cost performance goes 

down on a curve, Mr. Wolf and I think that it—I should say, in my 

case, our experts think; he probably has real knowledge. I am just 

telling you what our people think. Then in about someplace between 2 to 4 years, the all-electric pick-up and delivery vehicle, utilized in an environment where its range is not an issue to us, 

would have a positive return on investment and be competitive 

pricewise when you take operating and capital costs. So the hybrid, 

like the Eaton FedEx truck, has a capital cost barrier that is hard 

to reach. 

Now, there is a third iteration, of course, which is the approach 

that Chevrolet has taken with the Volt. There you have the electric 

power as the primary engine, and you have a small internal combustion engine you use as a generator. I personally think that has 

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an enormous amount of promise. And some combination of all-electrics and the Chevy Volt approach—— 

Mr. UPTON. They actually think the Volt will be a good number 

of them. Because of the range, it will never use an ounce of gasoline, and it will always be on the electricity because it uses the 

backup—— 

Mr. SMITH. Right. 

Mr. UPTON. The question I wanted to get to, even with the Volt, 

50,000 vehicles will be sold this year, particularly on the east and 

west coast and here Washington as well. They still predict that by 

the end of this decade, they are not going to—with all the electric 

hybrids—not be able to penetrate more than a 15 or 20 percent 

market share. And so we will still rely significantly then on the petroleum-based vehicle. So it is going to take some time to get where 

maybe a lot of us want to go. 

Last question, Mr. Drevna, and then I am out of time. We had 

this testimony last year from Lion Oil, that if the clean air bill goes 

through, 1,200 jobs that are going to be moving out to a new refinery in India. We all care about the planet, we all do. What is the 

cost of the regulation per unit of fuel in this country versus someplace else that won’t have these regulations, that one of those jobs 

might go? Do you know? 

Mr. DREVNA. I could hope to get that back to you in writing. I 

don’t have that with me today. I can tell you, though, that the market is won and lost on pennies, and just driving up the cost of domestic production, given the state that the domestic refinery and 

petrochemical industries economic state we find ourselves in today, 

and for the foreseeable future, that it is no secret that India, with 

their plant in Reliance, are looking at the United States to export 

vast quantities of fuel at the domestic refiner’s expense. 

Mr. MARKEY. The gentleman’s time has expired. The gentleman 

from Vermont, Mr. Welsh. 

Mr. WELSH. Thank you very much, Mr. Chairman. A few questions, Mr. Drevna. I am sorry I wasn’t here for your testimony, but 

had a chance to review it. I want to make sure I understand it. 

You did testify that the best energy policy is one that creates a 

level playing field; is that more or less right? 

Mr. DREVNA. Absolutely, sir. 

Mr. WELSH. It allows the most cost-competitive form of energy to 

win out. 

Mr. DREVNA. Correct. 

Mr. WELSH. Page 5 in your testimony stated: NPRA members 

paid billions of dollars in taxes rather than consume billions of taxpayers subsidies. Correct? 

Mr. DREVNA. That is correct, sir. 

Mr. WELSH. So here is a question that I think a lot of us struggle 

with. I want to ask if NPRA would support the removing of several 

subsidies in the Tax Code which some folks think would provide a 

level playing field. 

Let me go through these. My understanding is that section 199 

of the domestic production incentive provides a tax rate reduction 

on refinery income; and that subsidy is, according to CBO, expected 

to cost taxpayers about 14.8 billion for 10 years for the oil and gas 

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industry. Would your association support repeal of that tax subsidy 

as it applies to energy companies? 

Mr. DREVNA. Absolutely not, sir. And let me tell you, if you recall 

the genesis of the section 199 credit, there was going to be a WTO 

charge against the United States on the subsidizing unfairly domestic manufacturing, of which refining is, all manufacturers, 

whether you are producing gasoline or loaves of bread. So in the 

Jobs Act—— 

Mr. WELSH. Let me interrupt you, and welcome back. I just want 

to go down some of these. What I understand you saying is you 

think there is a reason—— 

Mr. DREVNA. There is a very valid reason. 

Mr. WELSH. So you oppose repeal? 

Mr. DREVNA. Yes. 

Mr. WELSH. The Tax code, as you know, includes a bonus depreciation provision for oil refineries, and it allows refiners to immediately write off 50 percent of the capital cost of certain refinery 

expansions. That is the benefit that the CBO estimates will cost 

taxpayers 3.5 billion over the next 5 years. Would your association 

support repeal of that energy tax subsidy? 

Mr. DREVNA. No, sir. And the history of that was the EPAC 05, 

in the negotiations in this very room on the best path forward to 

continue to provide domestic—— 

Mr. WELSH. So you not only oppose repeal but you defend extension? 

Mr. DREVNA. Yes, sir. 

Mr. WELSH. Finally, I understand that until recently a tax credit 

was available for complying with EPA’s low-sulfur diesel requirements, and an extension of this credit is included in a pending Senate tax extenders bill, which I am sure you are aware of. That is 

estimated to be a $20 million cost to the taxpayers. Does your association oppose the extension of this energy tax subsidy. 

Mr. DREVNA. Oppose the extension? No, sir. 

Mr. WELSH. So you like that one, too? 

Mr. DREVNA. Again, sir, in a vacuum you look at each one of 

these things and say, what are they? But when you look at the history of them—— 

Mr. WELSH. Well, I get it; you are here doing your job and you 

have a case to make for why these tax subsidies should be extended to your industry. And you are representing the refiners, and 

it is your job to help them look out for their viability and bottom 

line. 

Obviously, we in Congress, both sides of the aisle, have a broader 

set of concerns. The energy policies have to factor in the things you 

raise—national security, environmental protection and consumer 

protection. So what is one person’s subsidy is a competitor’s disadvantage. 

So the question that I think is begging is whether there is a level 

playing field when there are taxpayer subsidies that apply to one 

form of energy but are denied to another form of energy. 

Mr. Chairman, I yield back. 

Mr. MARKEY. The gentleman’s time has expired. The chair recognizes the gentleman from Texas, Mr. Burgess. 

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Mr. BURGESS. Thank you. Mr. Smith, if I understood the figures 

you gave us a few minutes ago correctly, you have 70,000 vehicles 

in your overall fleet and, of that, 300 hybrids; is that correct? 

Mr. SMITH. [Nonverbal response.] 

Mr. BURGESS. Peterbilt Company in Denton, Texas makes a 

great hybrid. I would encourage you to look at that. They get great 

mileage, and they are quiet, and low-emission vehicles, which is 

critical in our part of the world, because we do have some air quality issues. Did you give us a figure on the number of total electric 

vehicles you currently have in your fleet? 

Mr. SMITH. We have, I think, 15 in Europe that we are running 

experiments on in prototype, and we have four that we just put out 

in Los Angeles which we will be running the experiments on. 

Again, they are definitely not cost-effective from a capital standpoint at this point. 

Mr. BURGESS. Out of curiosity, what is the cost currently of an 

all-electric vehicle for your purposes? 

Mr. SMITH. I think we have a non-disclosure with the manufacturer, but let me put it this way. If you take an equivalent size 

van, which is roughly a Freightliner or Sprinter, and you take the 

all-electric vehicle, it is about 2–1/2 times the capital cost; but 70 

percent, perhaps more, of all-electric is the battery cost. So if it 

comes down the price performance curve that we projected, you get 

out about 4 or 5 years and you have a positive return from the allelectric. 

Mr. BURGESS. Sure. The cost of chassis and the frame is not 

going to be any different. 

Mr. SMITH. No, it is not any different. 

Mr. BURGESS. And with electric vehicles, ultimately, at least in 

my part of the world, you are charging that with electricity; but the 

electricity is not a gift, it is generated by burning natural gas and 

coal in most Texas power plants. 

We have one nuclear plant in Comanche Peak which I understand is going to be expanded, and I am grateful for that. But we 

have lost 25 or 30 years of nuclear technology by taking ourselves 

out of that. And it would seem to me that a power grid, supplied 

by a nuclear plant which was providing the baseload, really would 

be—if we were talking about a carbon-neutral environment and a 

fleet that is of electric vehicles for the type of deliveries that you 

do, that would be the almost ideal situation, would it not? 

Mr. SMITH. Well, in the Energy Security Leadership Council report that I referenced, we strongly endorse nuclear power. And you 

are completely correct that that would be a zero-emissions production of power and a zero-emissions from the vehicle that was powered by the nuclear power plant. 

But it is also important, which is in the Electrification Coalition’s 

report that I mentioned, we have the capability in this country to 

power many, many millions of electric and hybrid electric vehicles 

with the off-peak power production that we already produce with 

the coal plants or natural gas plants or what have you. And the 

reason for that is that the power can’t be stored during the night, 

so it is just a matter of relatively. And I don’t mean to minimize 

the complexity of it. But it is relatively easy to modify the inframstockstill on DSK4VPTVN1PROD with 

122 

structure and the charging stations at the homes or the apartment 

to do it. 

Mr. BURGESS. Let me move on quickly now. Have you looked at 

those in your business—have you looked at the use of natural gas 

for your heavy vehicles, your cross-country vehicles? 

Mr. SMITH. We have. And our belief is that the best use of natural gas is for heavy, centrally fueled vehicles, like garbage trucks, 

buses, and so forth, or for the generation of electric power. Longhaul truck transportation, whether it is fine products or Peterbilt 

or Freightliner or so forth, are probably better served, in our opinion, by the advanced diesel technologies because of the infrastructure problems. 

Mr. BURGESS. But of course the infrastructure problem is something that, regardless of the fuel of the future and recognizing that 

hydrocarbons are going to be the transitional fuel for a while, but 

the fuel of the future is going to require an infrastructure investment. And whether we call it investment or subsidy, it is going to 

be required. 

But I do agree that we, in Congress, really should not try to pick 

winners and losers. That ultimately should be decisions based, just 

as you are doing it right now, based upon what is economically viable for your company. It is hard enough to make a living today 

without us complicating it for you. 

If I could just ask you one quick question. And we understand 

the problem with climate change is a global problem. And I certainly appreciate your service and appreciate the wisdom that you 

have brought for us today. 

When I visited with the Iraqi oil minister, I believe his name is 

Dr. Shahirstani, he is a Harvard-educated petroleum engineer, he 

assured me that none of Iraq’s oil was going to be—was involved— 

there were no Chinese contracts involved with Iraqoil. And yet I 

hear from individuals like yourself coming back that the Chinese 

were all over Basra in 2005, 2006, looking to tie up oil contracts. 

Do you have any insight for us as to what is going on there? 

Lieutenant DIAMOND. I don’t have any firsthand knowledge of 

Chinese presence on the ground in my time in the country, sir. 

Mr. BURGESS. And, again, I appreciate the problem. We want to 

produce American energy for a security standpoint. But on a global 

standpoint, from the carbon production and the pollution, we do 

have to be mindful of what is happening in those other countries. 

Lieutenant DIAMOND. Absolutely. You see a Chinese Navy now 

that is looking to make a global presence and building itself aircraft carriers and submarines that are defending their own energy, 

free flow of energy around the world. Yes, sir. 

Mr. BURGESS. Thank you, Mr. Chairman. I yield back. 

Mr. MARKEY. Great. The gentleman’s time has expired. The chair 

recognizes himself for a round of questions. 

Let me ask you this, Mr. Smith. And I think it is important for 

us to say because the gentleman from Texas and the gentleman 

from Louisiana who are here obviously want to protect the oil industry and Texas and Louisiana. We don’t have any problem with 

the 8 million barrels of oil a day that are produced here in the 

United States. Do we? 

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Mr. SMITH. No, Mr. Chairman. In the Energy Security Leadership Council report, which we produced—and, remember, there 

were 10 four-star generals and admirals who had spent a great 

percentage of their careers protecting the oil trade, as the Lieutenant exemplifies in more recent times, and the businesses were 

large energy consumers like us and Southwest Airlines, Royal Caribbean. The basis of the recommendations we made were, number 

one, maximize U.S. domestic production of oil and gas for sure. So 

it is definitely not in conflict with that at all. 

Mr. MARKEY. You support President Obama’s decision to begin to 

open up additional parts of the Outer Continental Shelf? 

Mr. SMITH. Absolutely. 

Mr. MARKEY. So your problem is with the OPEC oil. 

Mr. SMITH. Our problem is that the oil market is not a free market. It is managed by OPEC in a manner which, if it were done 

in the United States, would be illegal with supplies withheld and 

the market price—with their attempt to set the market price. The 

problem is it then becomes a social geopolitical weapon or an issue 

between us and China. And, by the way, we have huge operations 

in China. Been there 25 years, fly many 777 flights there every 

day. 

So this oil problem for the first time is different, because it is 

being driven by demand increase and not just by supplies being 

withheld. And those are the seeds of a future confrontation among 

the nations of the world and why we need to minimize the importation of petroleum and fossil fuels in this country from potentially 

unfriendly regimes. 

Mr. MARKEY. So could you talk a little bit as a result about the 

economic impact on the United States of having the price of oil set 

overseas in terms of its equivalence from being attacks on individual Americans. Because I think that is an important translation 

for the American people to hear. They are economically impacted 

by having this price of oil set overseas. 

Mr. SMITH. Well, the costs are incredible, really. The Department 

of Energy did a study, and the estimate in real dollars between 

1970 and 2008 of our dependence on foreign petroleum was over $5 

trillion. In 2008, when the price of oil ran up to $147 per barrel 

in the summer, the price that year was about $600 billion total to 

our economy, and it was $388 billion in terms of adverse balance 

of trade and it was about 56 percent of our total trade deficit. It 

was enormous. 

Mr. MARKEY. So this oil that we import—again, and this is just 

for the members from Louisiana or Texas or other oil producing 

States. We are not talking about that oil. None of this discussion 

is about Louisiana or about Texas. It is about Saudi Arabia, it is 

about other countries that we import the oil from. That is the strategy that we are trying to construct that deals with that issue. So 

we are not in any way trying to deal with this domestic industry. 

So talk a little bit, if you could, about what that balance of payments issue means in terms of the American economy as well. 

What is the economic impact on our country? 

Mr. SMITH. Well, in the summer of 2008—people forget this, at 

their peril—while the great financial meltdown was because of the 

subprime mortgage situation, and that was the bonfire that almost 

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consumed us, the match that lit it off was the run-up in fuel prices, 

where the subprime borrowers of these mortgages literally had to 

make the choice between making the mortgage payment or paying 

for the gas to go to and from work. 

It is also important to recognize that each of the four other major 

recessions that the United States has experienced from 1973 forward was precipitated by a significant run-up in oil prices. 

Mr. MARKEY. And you believe that the recession that we are still 

in was precipitated by that run-up to $147 a barrel? 

Mr. SMITH. No question that that was, as I said, the match that 

lit off the financial meltdown in the summer of 2008. 

Mr. MARKEY. And, again, that didn’t have anything to do with 

Louisiana or Texas or Arkansas’ oil production. That had to do 

with what was going on overseas that put us at the mercy of 

OPEC. 

Mr. SMITH. No question. 

Mr. MARKEY. So I just think that is important going forward, 

that we continually divide this question between the 8 million barrels of oil that we produce here and the 11 or 12 million barrels 

of oils a day that we import, again, as Lieutenant Diamond said, 

from places that we probably should not be importing them from. 

Lieutenant Diamond, would you care to comment? 

Lieutenant DIAMOND. Just a fact, Mr. Chairman, when you talk 

about cost, for every $5 increase in the price of a barrel of oil, that 

costs the Department of Defense $1.7 billion. That is larger than 

the procurement budget of the United States Marine Corps. So 

when you talk about the scope of price impact on the Department 

of Defense, it is tremendous. 

Mr. MARKEY. So repeat that again. And that goes right down to 

the American taxpayers. 

Lieutenant DIAMOND. Exactly. 

Mr. MARKEY. So explain that a little bit more. 

Lieutenant DIAMOND. So for every $5 increase in the price of a 

barrel of oil, that costs the Department of Defense an additional 

$1.7 billion in energy costs. That is more money just spent on energy costs than we actually are spending on procuring equipment 

and bullets and tanks for the Marine Corps. 

Mr. MARKEY. So that comes right out of our defense budget? 

Lieutenant DIAMOND. Right out of our troops’ pockets, is what I 

am trying to say, sir. 

Mr. MARKEY. So that is terrible. So there is no question that we 

need a plan that we put in place to have a different pathway for 

our consumption of oil from a national security perspective. 

And, Mr. Wolf, Israel has made that decision: They do not want 

to import oil. 

Mr. WOLF. Israel has made the decision that, by 2020, to be oil 

independent, which doesn’t mean that their local production, which 

someone said is zero, they have some production. It doesn’t mean 

that they are going to stop producing locally. 

And one point to just clarify the linkage between economics and 

oil, in the last 12 months we have seen the most nascence of economic recoveries, and the price of oil has recovered 70 percent in 

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125 

selves, what is the size of the next stimulus that we have to put 

if we reach those heights that we did in 2008. 

Mr. MARKEY. My time has expired. Let me turn and recognize 

the gentleman from Louisiana, Mr. Scalise. 

Mr. SCALISE. Thank you, Mr. Chairman. I am glad we are talking about this issue, because in fact many of the policies that are 

being proposed by this administration that are threatening America’s energy security. And when we talk about wanting to reduce 

our dependence on foreign oil, and especially Middle Eastern oil, I 

strongly agree with that. The problem is, many of these policies, 

like cap-and-trade, this energy tax, like the removal of tax incentives to explore in America, are going to make us more dependent 

on foreign oil. And so some of the same people who keep saying, 

because it sounds good to them, I guess, that they want to reduce 

our dependence on foreign oil, are proposing policies that would 

make us more dependent on foreign oil. And so we have got to be 

clear about how the policies adversely affect our energy security. 

And we are seeing some of those things play out right now. 

And I want to ask Mr. Drevna, when we talk about this EPA 

finding—and we had EPA Administrator Jackson here earlier 

today—as they try to regulate greenhouse gases, what kind of impact does that have on American energy exploration? 

Mr. DREVNA. Well, I can talk about what impact it will have on 

American domestic refinery production. What the—and the tailoring rule will do is naturally it will exempt for a while a lot of 

sources, and it will focus on larger sources. And we can debate 

whether that is legal or not and whether it is congressional intent 

or whatever. 

However, just to simply have a greenhouse gas CO2 requirement 

will automatically—on these resources and refineries and petrochemical facilities, it will automatically make you go through a 

PSD review. Now, PSDs are going to say, well, whatever you increase, whatever it is above that threshold, you have got to put the 

best available control technology on. Well, in a refinery or petrochemical facility, what is best available control technology for CO2? 

At the same time, where we are making cleaner and cleaner 

fuels that require more and more robust kinds of processes, hydrotreaters, that actually increase CO2. So we are caught in this vicious circle that says, OK, we are 

going to put back on a refinery that doesn’t exist—that the back 

doesn’t exist. But you are going to have to increase your CO2 emissions because we want you to make cleaner and cleaner fuels. 

There is only one way of doing it, and you are going to have to reduce production. And the question—— 

Mr. SCALISE. And if we reduce production, where would that go? 

Mr. DREVNA. Well, it is going to go overseas. 

Mr. SCALISE. What countries would be primarily the beneficiaries 

of a cap-and-trade energy tax? 

Mr. DREVNA. As I said before, India and that Reliance Refinery 

there is a massive, massive facility with a target on the United 

States. 

Mr. SCALISE. And so, in walking all the way through this, as 

countries like China and India take more of our jobs from these 

reckless policies, what are the environmental regulations that a 

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country like India has on refining? Would they be refining with 

these same kind of emission standards? 

Mr. DREVNA. Not when it comes to CO2 or not when it comes to 

the other myriad of environmental rules that we have here. 

Now, I am not saying that these plants aren’t efficient and clean. 

But they don’t have the myriad of rules that we do. And this is a 

good hearing to talk about this, because we are talking about reducing our reliance on foreign oil, but a lot of these policies are 

going to increase our reliance on foreign imported products, finished product, not crude oil, but the gasoline and the components 

that make up gasoline. 

Mr. SCALISE. And the irony is the jobs that would go to those 

countries, I mean, we have seen numbers. National Association of 

Manufacturers says cap-and-trade energy tax or similarly some 

kind of EPA ruling would cost millions of jobs just in the first year 

that would leave our country. But the irony is, for the folks who 

say they want to go and reduce greenhouse gas emissions because 

that is destroying the planet with global warming, you would have 

increased greenhouse gas emissions, because when China gets 

those jobs, when India gets that refinery, they are actually going 

to be emitting more greenhouse gases than if that was done here 

in the United States. 

So we lose jobs and we lose billions of dollars in our economy, 

surely at a time when we want to be doing the opposite; we should 

be creating jobs. But what is worse is we have an increase in 

greenhouse gas emissions. So the folks that are running around 

saying manis destroying the earth, we need to have cap-and-trade, 

what they are going to do in effect is increase greenhouse gas emissions through their policies. 

And I know you have talked about it. We have other companies 

and industries that have come and laid it out, and we are seeing 

it. We are seeing companies already pull back and start moving operations overseas. 

In south Louisiana there is a steel plant that is going to go one 

of two places, they are going to go in south Louisiana or they are 

going to go to Brazil. And the irony is, in Brazil they would get 

over 700 good high-paying jobs that we otherwise would have had, 

$2 billion, with a B, $2 billion of private investment, not government bailouts, private investments. And it takes four times the 

amount of carbon—four times the amount of carbon—to produce 

steel in Brazil than it would in the United States under our current rules. And so you would actually increase emissions. 

And one last thing. The National Highway Traffic Safety Administration, they have said that they have the authority to establish 

their own CAFE standards without the EPA doing their own thing. 

I have got a letter from the National Automobile Dealers Association talking about that that I would like to have unanimous consent to enter it into the record. I know we don’t have time to talk 

about it. 

Mr. MARKEY. Without objection, it will be included in the record. 

[The information was unavailable at the time of printing.] 

Mr. SCALISE. Thank you. And I yield back. 

Mr. MARKEY. The chair recognizes the chairman of the full committee, the gentleman from California, Mr. Waxman. 

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Mr. WAXMAN. Thank you very much, Mr. Chairman. 

I am trying to think through the cost to this country of ever increasing oil prices. Between 2001 and 2008, the average household 

doubled its spending on gasoline. That is 7 years. And many of us 

remember the soaring costs that we had in the fall of 2008 when 

gasoline prices reached more than $4 a gallon, and may be coming 

back as our economy improves. 

Now, there are companies that rely on oil in the course of their 

everyday business, and they certainly feel the impact. If these companies feel the impact, they have to figure out how to deal with it 

and may have to close up. That is a loss of jobs. 

Now, there is a cost not just to the individuals and the businesses, but to the taxpayers. For instance, the RAND Corporation 

estimated that the cost to American taxpayers of protecting oil interests abroad at between $67 billion and $83 billion per year. That 

is a lot of money. 

So, Mr. Smith, let me start with you. You testified that while oil 

prices are lower today than they were last summer, many of the 

fundamentals that pushed oil prices up are still present today. Can 

you tell us how important fuel costs are to a company like yours 

and why it is in the Nation’s economic interest to adopt a clean energy policy? 

Mr. SMITH. Well, Mr. Chairman, FedEx Corporation is about a $36 billion corporation, and we are one of the largest fuel users in 

the country. I think combined jet fuel, obviously our express company is an enormous user of that. It is the biggest air transportation system in the world and certainly the biggest all-cargo network in the world. So we burn in excess of 1.5 billion gallons of fuel 

every year, and the cost is a major consideration for us. 

But the consideration is much greater in the damage that it does 

when prices run up to the overall economy than to just our company, because what we do is we have an established fuel price and 

then we adjust it each month based on the run-up or the run-down 

on fuel prices. Now, over the years we have had to vastly increase 

that base price. 

But as I mentioned a moment ago, the difference this go-round 

compared to the other major oil crises since 1973—and I have lived 

through all of them. It is for the first time this is a demand-driven 

situation, where the rise of China and India and the other developing nations and geopolitical considerations mean that there is 

likely to be significant spikes in the price of oil like we experienced 

in 2008, right before the financial meltdown, or military confrontations over the issue. People forget at their peril that World War II 

for this country was triggered by the United States embargoing oil 

to the empire of Japan. That is what caused—the proximate cause 

of the war. 

So we need as a country to reduce our dependence on petroleum 

imported from unstable and unfriendly regimes in parts of the 

world. And with that, not only do you get increased national security, better economic productivity, but as far as we can see, the 

technologies that can do that will vastly improve the environment 

as well. So you get a troika there. 

Mr. WAXMAN. It is a win-win. 

Mr. SMITH. It should be a win-win. 

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Mr. WAXMAN. Do you buy this argument that Mr. Drevna is 

making that the oil companies will have to go overseas, they will 

have to locate overseas, we will lose domestic jobs? 

Mr. SMITH. Well, I am not an expert on his sector. I think it is 

the chemical processing companies that are probably, and the refineries, that are most at risk. 

What we have advocated is maximization of U.S. oil and gas, as 

well as nuclear power, battery power, wind, solar. In fact, we have 

I think with our installation in New Jersey at our Woodbridge 

FedEx ground hub, I believe that is the largest solar industrial location in the country at present. 

So we have got to do all of those things. I just don’t know enough 

to speak authoritatively about his sector. 

Mr. WAXMAN. Well, you are looking at it from the impact on your 

company and the economy and Mr. Wolf is looking at what it will 

cost consumers if we move away from oil, and it would be a huge 

benefit. And, Mr. Diamond, you have firsthand experience in the 

military guarding Iraqi oil terminals. And I want to commend you 

for your service to this country. I guess your salary was part of 

that what RAND estimates $83 billion per year protecting our access to oil. And I think, if we reduced our dependence on oil, that 

can mean a lot in terms of savings for the Armed Services and limiting our involvement in places where we will not need to be. Is 

that right? 

Lieutenant DIAMOND. Absolutely, Mr. Chairman. And also, not to 

sound over dramatic, but the military also measures its cost in 

human lives when you are talking about our involvement overseas, 

not just dollars or jobs. 

Mr. WAXMAN. Well, clean energy legislation would deprive Iran 

of $100 million a day in oil revenues. And what are they using that 

$100 million a day to do? It is not in our interest that they have 

that money to spend to become a military force that can threaten 

our allies like Israel and interests of the United States elsewhere 

in the Middle East, and maybe even the United States itself. 

Thank you very much, Mr. Chairman. I yield back the balance 

of my time. 

Mr. MARKEY. The gentleman’s time has expired. The chair recognizes the ranking member of the full committee, Mr. Barton. 

Mr. BARTON. Thank you, Mr. Chairman. The beauty of television, 

I could watch Mr. Waxman in my office and for once I timed it just 

right. I had a very nice lunch, too. So I am glad you all were here 

while I was eating lunch. 

Mr. MARKEY. I don’t think our witnesses wanted to hear that. 

Mr. BARTON. I know. We do appreciate each of you gentlemen 

being here. I know it has been a long day. 

I want to start with Mr. Drevna. You talked in your statement 

about the form of energy that delivers a BTU at the lowest economic cost and that a free market economy wins. Does economic 

growth in this country depend on the source of the BTU or the cost 

of the BTU? 

Mr. DREVNA. I think it depends upon the cost. I mean, the American consumer deserves the most efficient, the least cost approach. 

So I would like to clarify something here. Let’s make a difference 

between the imported crude and its effect on the economy. 

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The domestic refining industry is the first customer to be impacted by high-priced oil, and you have seen the results of this impact and what the state of the industry has been since it went up 

to $147 a barrel, and then with the recession. You know, we don’t 

like paying high prices for oil any more than the consumer at the 

pump. 

So, I mean, the programs—and I agree wholeheartedly with Mr. 

Smith’s comment. I think I said it, and if I didn’t state it clearly 

enough, I will try to repeat it. We have to cover the field. We have 

to make sure that the U.S. energy policy provides the proper incentives for the entrepreneurs to develop these kinds of technologies. 

But we can’t flip a switch and automatically transform ourselves 

into a non-oil reliant country. We have plenty of resources here in 

the United States. Let’s start using them and end that reliance on 

so much imported oil. 

But even at that, you have got to realize where the imported oil 

comes from. Most of it comes from North and South America. And 

if we do our own resources, we can put a big dent in that, in the 

rest of our imports. 

Mr. BARTON. Mr. Smith, I didn’t read your testimony, so I am 

kind of shooting in the dark here, which is not a good thing. You 

should know the answer to the question you ask before you ask it. 

But I know a lot of your reputation as a straight shooter, so I am 

going to take a shot and see how you respond. 

Have you followed the endangerment process that the EPA has 

used to come up with their endangerment finding? 

Mr. SMITH. Not to the extent that I was exposed to it this morning. But I got a pretty good tutorial on it. 

Mr. BARTON. Well, Administrator Jackson admitted that if you 

find that the endangerment finding is not done properly; in other 

words, if you repeal that or dispose of it, under current law the 

EPA does not have the authority to regulate CO2 as a pollutant 

under the Clean Air Act. If you put a price on carbon because of 

this endangerment finding, it is obvious that you are going to raise 

the price of doing business for a business like yours, which I don’t 

know what your cost of aviation fuel is, but it has got to be—and 

your trucks on the ground, but it has got to be a considerable cost 

of business. So anything to regulates CO2 is going to raise your 

business cost. 

Do you feel you know enough to give an opinion whether the 

endangerment process that the EPA has used is appropriate or 

not? 

Mr. SMITH. I am not qualified to make that statement one way 

or the other. 

Mr. BARTON. That is fair. Did you put in your testimony anything about what the cost to your business would be of putting a 

price on carbon under the proposed Waxman-Markey bill? 

Mr. SMITH. No. I didn’t put anything in the testimony. I did say, 

when you were out of the room, though, that FedEx Corporation is 

roughly a $36 billion company, and we are the largest air cargo, 

air transportation system by far and we operate over 70,000 vehicles. So we burn north of 1.5 billion gallons of fuel. So anything 

that increases the cost of energy obviously would affect us. But, 

much more importantly, since the way we handle this is to have 

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130 

a base price of fuel in our rates and then pass along increases with 

fuel surcharges, the effect would be to our customers even more 

than us. 

Mr. BARTON. Is there anything in the research phase that takes 

the place of hydrocarbon aviation fuels as a fuel source for your airplanes? 

Mr. SMITH. Well, the answer to that is, from a technical standpoint, absolutely yes. The aviation industry has shown that jet fuel 

is made from Jatropha, from Camolina, and from algae can be 

intermixed with Jet-A. And the fuel efficiency, in other words per 

BTU of power produced by the gallon of the biojet, is actually 

greater than the Jet-A and it burns cleaner. 

So the technical issue is really not much in question. I think the 

Lieutenant mentioned that the Navy flew an F–18 Hornet and they 

called it the Green Hornet just the other day. 

So from a technical standpoint it can be done. The issue is 

whether you can get the cost of production to a cost effective level. 

Mr. BARTON. Thank you. Thank you, panelists, and thank you, 

Chairman Markey. 

Mr. MARKEY. Thank you, Mr. Chairman, very much. 

We were about to complete the hearing, but the gentleman from 

Illinois. 

Mr. SHIMKUS. Mr. Chairman, I said, with respect to you and the 

staff in the next hearing that is supposed to be starting in about 

1 minute, I will forego any further questions. 

Mr. MARKEY. And will the gentleman from Kentucky also take 

that position? 

Then let’s do this. We will wrap up the hearing this way. We are 

going to ask each one of you to give us the 1 minute you want us 

to remember from your testimony. We are going to do it in reverse 

order of your original testimony. We will begin with you, Mr. 

Drevna. 

Mr. DREVNA. Thank you, Mr. Chairman. One minute. OK. I 

think that there is a lot of misunderstanding and miscommunication as to where the energy is going to come from for this country 

going forward. I think—I believe that, as I said before, we have got 

to make a decision: Do you want to continue a strong, robust domestic refining and petrochemical industry here? And, if we do, we 

can certainly work toward alternatives and we can certainly work 

toward supplements. But for a long time we are going to be dependent upon the hydrocarbon molecule. And the people who can 

deliver that molecule at the least cost are going to be the economic 

winners, and I sure hope it is the good old USA and not some foreign nation. 

Mr. MARKEY. Thank you, Mr. Drevna. Lieutenant Diamond. 

Lieutenant DIAMOND. It would certainly be the takeaway, sir, 

that, again, these current conflicts where America has put itself in 

a position of funding both sides of this war on terrorism due to its 

reliance on overseas energy supplies, sir. 

Mr. MARKEY. Thank you. Mr. Wolf. 

Mr. WOLF. I think the thing we might be missing here, which is 

important, is we are looking very internally focused on the U.S. 

The electric mile today versus a gasoline mile, which is that cost 

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131 

element that is so important, is actually cheaper in most of the 

world and is also cheaper in the U.S. today. So I would leave you with the fact that at $3 a gallon—even at $3 a gallon, which is half the price of Western Europe and a lot 

of developed countries that are moving ahead, the electric mile is 

cheaper. It is that history of infrastructure around gasoline that is 

not being developed. And once you develop that infrastructure, you 

can actually access those marginal electric miles. 

Mr. MARKEY. Thank you. And Mr. Smith. 

Mr. SMITH. Well, I would simply reiterate that we feel strongly 

that the electrification of short-haul transportation with plug-in 

electric and hybrid electric vehicles offers a substantial opportunity 

for the United States if the Electrification Coalition’s recommendations were adopted by the Congress to reduce our petroleum consumption per unit of GDP, reduce the emissions as a consequence 

of that even when looking at the power generation of the electrical 

power for the electrified vehicles; and, finally, would significantly 

reduce the economic and national security challenges that will undoubtedly occur if we do not take some very strong measures to accomplish the goals that we have been discussing today. 

Mr. MARKEY. Thank you, Mr. Smith, very much. 

And I would just like to say to you, Mr. Smith, that we very 

much appreciate your leadership in increasing the fuel economy 

standard from 25 to 35 miles a gallon. I don’t think it would have 

happened without you and your organization, Mr. Diamond—the 

other Mr. Robert Diamond in the room behind you back in 2007. 

We had that fight in 2001 on the House floor, only 155 votes; 2003, 

168 votes; 2005, 178 votes. I know, because I was making that 

amendment with Mr. Boehlert. When the price really started to 

spike in 2006, we were not allowed to have that vote up on the 

House floor. But because of you and your organization, we have 

made that breakthrough. And I think we have seen the technological revolution already unfold. And the same thing we saw in 

telecommunications. Alexander Graham Bell invented his phone, 

and we were all still using black rotary phone 100 years later. It 

was only after this committee and the Justice Department acted 

that we changed the incentives that moved us from black rotary 

dial phones to BlackBerries. It only happened in 10 years after everyone said we could not do it. 

So I think when America has a plan, America wins. And I saw 

you checking that BlackBerry in the course of this hearing. And, 

by the way, the members of the committee are very proud that you 

can check your BlackBerry. 

Mr. SMITH. I was afraid I said something wrong, and Gene sent 

me a message saying shut up. 

Mr. MARKEY. No more tapping on the shoulder. 

Mr. WOLF. That is a Canadian technology. This is an American 

technology. 

Mr. MARKEY. But that revolution in telecom happened because 

we changed the policies in this committee. And what we are seeing 

in the automotive sector is the same thing. And I think if we just 

put together a plan America won’t have to try to keep China out 

because we will be taking them on. We will have a plan, and we 

will win. America wins when it has a plan. 

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132 

Anyway, thank you all so much for your testimony today. With 

that, and with the thanks of the committee, this hearing is adjourned. 

[Whereupon, at 2:05 p.m., the subcommittee was adjourned.] 

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