# TRANSCRIPT OF PROCEEDINGS

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HERITAGE REPORTING CORPORATION

Official Reporters 1220 LStreet, NW Suite 600 Washington, DC 20005 contracts@hrccourtreporters.com U.S. ENVIRONMENTAL PROTECTION AGENCY

In the Matter of:

Public Hearing on the Proposed Action to Ensure Authority to Issue Permits under the Prevention of Significant Deterioration Program to Sources of Greenhouse Gas Emissions: Federal Implementation Plan

Pages: 1 through 44 Place: Washington, DC
Date: September 14, 20101

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- 4888 U.S. ENVIRONMENTAL PROTECTION AGENCY

Public Hearing on the Proposed Action to Ensure Authority to Issue Permits under the Prevention of Significant Deterioration Program to Sources of Greenhouse Gas Emissions: Federal Implementation Plan

September 14, 2010 EPA Ariel Rios East Building, Room 1153

Washington, D.C.2

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- 4888 P R O C E E D I N G S 1 (9:00 a.m.) 2 MS. SUTTON: Good morning. Thank you for 3 attending this public hearing, held by the U.S. 4 Environmental Protection Agency. We're holding this 5 hearing to take comment on EPA's proposed rulemaking 6 entitled, Action to Ensure Authority to Issue Permits 7 Under the Prevention of Significant Deterioration 8 Program to Sources of Greenhouse Gas Emissions: Federal 9 Implementation Plan, which proposes a federal 10 implementation plan that would apply as early as 11 January 2, 2011, in any state that is unable to submit 12 a state implementation plan, or SIP, revision to ensure 13 that the state has authority to issue permits under the 14 PSD program for sources of greenhouse gas emissions. 15 This proposed rulemaking was published in the Federal 16 Register on September 2, 2010, at page 53883. 17 My name is Lisa Sutton, and I am an 18 environmental engineer in the New Source Review Group 19 in EPA's Air Quality Policy Division, in the Office of 20 Air Quality Planning and Standards, down in North 21 Carolina. I will be chairing today's hearing. 22 As stated, we're here today to listen to your 23 comments on EPA's proposed FIP that would apply as 24 early as January 2, 2011, in any state that is unable 253

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- 4888 to submit a SIP revision to ensure that the state has 1 authority to issue permits under the PSD program for 2 GHG sources. This proposed rule is a companion rule to 3 a second proposed rulemaking, Action to Ensure 4 Authority to Issue Permits under the Prevention of 5 Significant Deterioration Program to Sources of 6 Greenhouse Gas Emissions: Finding of Substantial 7 Inadequacy and SIP Call, also published in the Federal 8 Register on September 2, 2010, at page 53892. 9 In the second rulemaking, EPA proposed to 10 find that 13 states with EPA

- approved PSD programs are 11 substantially inadequate to meet the Clean Air Act 12 requirements because they do not appear to apply PSD 13 requirements to greenhouse gas

- emitting sources. For 14 each of these states, EPA proposed to require the 15 state, through a SIP call, to revise its SIP, as 16 necessary, to correct such inadequacies. 17 Today's hearing is an opportunity for the 18 public to comment on EPA's proposed FIP. I may answer 19 quest ions that seek to clarify what we have proposed, 20 but the purpose of this hearing is to listen to your 21 comments, not to discuss or debate the proposal. 22 Before we open the floor for testimony, I would like to 23 briefly describe the circumstances that led EPA to 24 propose the action that is the subject of today's 254

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- 4888 hearing. 1 On April 2nd of 2007, the Supreme Court found 2 that greenhouse gases are pollutants covered by the 3 Clean Air Act. In December of 2009, the EPA 4 Administrator found that six key greenhouse gase s 5 threatened the public health and welfare of current and 6 future generations, and that greenhouse gases from 7 new motor vehicles and engines contribute to greenhouse 8 gas pollution, which threatens public health and 9 welfare. 10 On April 1, 2010, EPA finalized the 11 light

- duty vehicle rule controlling greenhouse gas 12 emissions, where January 2, 2011 is the earliest date 13 on which a 2012 model year vehicle meeting these rule 14 requirements may be sold in the U.S. 15 Based on EPA's interpretation, under the 16 Johnson Memo Reconsideration, of when a pollutant is 17 subject to regulation under the Clean Air Act, and, 18 therefore, subject to PSD requirements, the Clean Air 19 Act permitting requirements apply to a newly regulated 20 pollutant at the time a regulatory requirement to 21 cont rol emissions of the pollutant takes effect. For 22 greenhouse gases, that would be January 2, 2011. 23 In May of 2010, EPA issued the final PSD and 24 Title V Greenhouse Gas Tailoring Rule. The Tailoring 255

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- 4888 Rule sets thresholds for greenhouse gas emissions that 1 define when permits under the PSD and Title V Operating 2 Permit programs are required for new and existing 3 industrial facilities. 4 The Clean Air Act requires states to develop 5 and follow SIPs that include requirements for issuing 6 PSD permits. When federal permitting requirements 7 change, states may need to revise their plans to 8 address such changes. In areas where a state does not 9 have a current SIP

- approved program, sources are issued 10 PSD permits under authority of federal PSD regulations, 11 either by EPA or under a delegation agreement by the 12 state. PSD in all tribal lands is currently 13 implemented under the federal regulations. 14 As I noted previously, EPA has proposed, in 15 an action simultaneous with but separate from the 16 action that is the subject o f today's hearing, to find 17 that 13 states with EPA

- approved PSD programs are 18 substantially inadequate to meet Clean Air Act 19 requirements, and proposed to issue a SIP call because 20 the programs in the states do not appear to apply PSD 21 requirements to greenhouse gas - emitting sources. 22 The states identified in the companion 23 proposal are: Alaska; parts of Arizona; Arkansas; 24 California's Sacramento Metro AQMD; Connecticut, 256

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- 4888 Florida; Idaho; Kansas; Kentucky; Nebraska; Nevada; 1 Oregon; and Texas. Under the SIP call , these states 2 must submit to EPA a SIP revision that applies the PSD 3 program to greenhouse gas

- emitting sources. Each of 4 these states must submit its SIP revision within 12 5 months of the date of the final SIP call, but the state 6 may advise EPA that the s tate would not object to EPA' s 7 establishing an earlier date that the state identifies, 8 which may be as soon as the end of December 2010. 9 Also under the proposed companion rule, by 10 October 4, 2010, each state permitting agency for which 11 we proposed the SIP call must submit a letter to EPA 12 that explains its greenhouse gas

-permitting authority 13 status and must provide information that documents why 14 its program cannot cover greenhouse gas emissions. 15 Importantly, each state's letter must 16 identify the date by which the state intends to submit 17 the SIP revision. Further, all other states that 18 implement their own PSD programs must review their 19 greenhouse gas

-permitting authority and inform EPA if 20 their PSD programs do not apply to greenhouse gas 21

sources. 22 So, the subject of today's hearing is the 23 proposed FIP that would apply in any state, for 24 example, the 13 states identified in the companion 257

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- 4888 proposal, that is unable to submit, by its specified 1 deadline, a SIP revision to ensure that the state has 2 authority to issue permits under the PSD program for 3 GHG sources. Under the proposed FIP, any source 4 requiring a PSD permit for greenhouse gases that is 5 located in an area subject to this FIP would be issued 6 a permit by the EPA, and the FIP would assure that PSD 7 permitting for greenhouse gases can continue until the 8 state is able to complete its SIP revision and EPA 9 approves that SIP revision. 10 EPA proposes that the FIP would be limited to 11 greenhouse gases, and it would readily incorporate a 12 phase

- in approach for PSD applicability to greenhouse 13 gas sources that EPA has developed in the tailoring 14 rule and expects to develop further through additional 15 rulemaking. We invite comment on the specific elements 16 of the proposal, as well as any other issues raised by 17 the propo sal. 18 Now, let me describe how this hearing will 19 operate and how to comment. 20 Today, we will be accepting oral comments on 21 our proposed FIP, and we will be preparing a written 22 transcript of this hearing. The transcript will be 23 available to the public as part of the official record 24 for this rule, and EPA will consider both oral comments 258

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- 4888 and written comments as we move forward in the 1 rulemaking process. 2 We are accepting written comments on the 3 proposed rule until October 14, 2010. We have a fact 4 sheet available in the registration area that 5 summarizes our proposed action, and it includes 6 detailed information for submitting written comments. 7 For those who will be providing oral comments today, I 8 will call each scheduled speaker to the microphone. 9 When i t is your turn to speak, please state your name 10 and your affiliation. It will help the court reporter 11 in preparing our transcript if you also spell your 12 name. If you wish to speak but have not already 13 registered to speak, either through the 14 pre - registrat ion or today at the registration desk, 15 please check in with our staff at the registration 16 table located just outside the entrance to this room. 17 Due to the small number of registered 18 speakers, we will not restrict each speaker's testimony 19 to five minutes, as is our normal practice. However, 20 we do ask that you limit your testimony to not longer 21 than 10 minutes. After you finish your testimony, I 22 may ask you clarifying questions. If, in addition to 23 the transcript, you would also like us to put the full 24 text of your written comments into the docket, please 259

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- 4888 be sure to give a copy of any written comments to our 1 staff at the registration table. 2 We intend to stay until either 6 p.m. this 3 evening or one hour after the last registered speaker 4 has spoken, whichever is earlier. A lunch break is 5 scheduled from 12:30 p.m. until 2:00 p.m. 6 I would like to thank you all again for 7 participating today. Let's get started. 8 MR. HOFFMAN: Let me introduce myself. I'm 9 Howard Hoffman, and I'm with the Office of General 10 Counsel in EPA. 11 MS. SUTTON: Thank you, Howard. 12 In fact, Howard's our first registered 13 speaker, Howard J. Feldman. 14 MR. FELDMAN: Good morning. I'm Howard J. 15 Feldman, director of Regulatory and Scientific Affairs 16 at API. API represents over 400 member companies 17 involved in all aspects of the oil and natural gas 18 industry, an industry that supplies most of America's 19 energy, supports 9.2 million U.S. jobs, and 7.5 percent 20 of the U.S. economy, and has invested nearly 21 $2 trillion in U.S. capital projects since 2000, 22 including those spurring advances in nearly every form 23 of alternative energy. Thank you for the opportunity 24 to testify today. 2510

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- 4888 In summary, we do not believe the proposed 1 rules under discussion can adequately address the 2 implementation challenges the states face. But more 3 importantly, they cannot remedy the incurable 4 shortcomings of attempting to regulate greenhouse gas 5 emissions under the Clean Air Act, which we believe 6 poses a major threat to the nation's economic recovery 7 and putting Ameri cans back to work. 8 The Agency's proposed implementation rules 9 are an admission that the states are unprepared to 10 issue PSD and new facility permits for control of 11 stationary source emissions. The state agencies 12 deserve no blame for this. With little guidance and 13 little lead time, they have been asked to define and 14 apply industry

- specific, and even equipment

- specific, 15 GHG emission standards for an indefinitely vast segment 16 of the American economy. It is unclear what, how many, 17 and what parts of entitie s would be covered, how many 18 permits would be involved, what emission control 19 technologies would be acceptable, and how much putting 20 such a program into operation would cost the states. 21 Many state officials have complained. It is 22 hard to see how the proposed rules would provide the 23 support, guidance and time states will need. Nor, as I 24 have said, would they lessen the adversity and 2511

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- 4888 sacrifice that EPA's stationary source GHS emission 1 regulation would impose on American workers, business 2 and industry, and the economy. 3 Temporarily changing who is going to do the 4 permitting does not solve the underlying problems with 5 the regulation itself. No matter who signs off on the 6 permits or how government implementation plans are 7 revised, regulation of these emissi ons under the Clean 8 Air Act will create vast uncertainty for U.S. citizens, 9 spur endless litigation, slow or reduce investment in 10 new enterprises, or possibly send investment out of the 11 country entirely, and reduce job creation and economic 12 growth. 13 EPA's own past evaluations of the impacts of 14 the regulation largely confirm this. While the Agency 15 has carefully avoided putting formal regulatory impact 16 analysis on the costs of the regulation, I haven't seen 17 it anywhere. Even while claiming benefits for entities 18 that might temporarily escape its requirements, it has 19 acknowledged that regulation could affect 6.1 million 20 U.S. emission sources, introduce $78 billion in annual 21 costs from just one element of the permitting 22 requirements, cause at least a decade o r longer of 23 permitting delays, slow construction nationwide for 24 years, introduce state and tribal burdens that are both 2512

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- 4888 administratively infeasible and overwhelming, and 1 impact sources otherwise not appropriate at this point 2 to even consider regulating. 3 Climate change is a serious issue, and the 4 oil and gas industry recognizes that action is needed. 5 That is one reason why America's oil and natural gas 6 industry invested more than $58 billion between 2000 7 and 2008 in climate change mitigation, including 8 ef forts to increase the energy efficiency of its 9 operations, develop lower carbon fuels, reduce natural 10 gas flaring and fugitive emissions, and capture and 11 sequester carbon emissions. It is also one of the 12 reasons why government has increased fuel efficiency 13 standards for highway vehicles, which promise to 14 produce major reductions in carbon emissions. 15 But the challenge we face cannot justify the 16 Agency's ill

- advised stationary source greenhouse gas 17 regulation. The Clean Air Act was not designed to 18 addres s GHG emissions, and modifying the existing 19 statutory thresholds to make them work for greenhouse 20 gases, as the Agency has done, amounts to rewriting the 21 Clean Air Act, not applying it. Furthermore, forcing 22 the Clean Air Act into service for which it is 23 ill

- suited will unnecessarily increase the costs of 24 emission reductions. This doesn't ever make sense, and 2513

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- 4888 it beggars belief that the administration would do this 1 when the nation is mired in one of the worst economic 2 downturns since the Great Depression, with 15 million 3 Americans still jobless. 4 The answer is clear. Set the regulation 5 aside. Let Congress address climate change with new 6 legislation. This will take time, but the result will 7 be a fit

- for

-purpose law that reflects the will of the 8 people and reduces the burden on the economy and the 9 American worker. Thank you. 10 MS. SUTTON: Mr. Feldman, thank you. 11 We are ahead of schedule. Our next scheduled 12 speaker, Janet Phoenix. 13 (No response.) 14 MS. SUTTON: If you are here, you are 15 welcomed to speak at this time. Janet Phoenix? 16 (No response.) 17 MS. SUTTON: Craig Segall is our next 18 registered speaker. 19 This is your option, if you'd like to speak. 20 MR. SEGALL: Sure. 21 MS. SUTTON: Thank you, and then we'll take a 22 break. 23 MR. SEGALL: Good morning. My name is Craig 24 Segall, and I'm with the Sierra Club. On behalf of its 2514

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- 4888 more than 1 million members and supporters, we're very 1 pleased to be here today to give comments. 2 The Clean Air Act provides that air pollution 3 control at source is the primary responsibility of 4 states and local governments, who recognize that 5 federal financial assistance and leadership is 6 essential to support the states. Global warming 7 pollution poses an especially pressing pollution 8 control responsibility. The Sierra Club agrees, 9 strongly agrees in fact, with EPA that the science 10 supporting the Administrator's finding that elevated 11 concentrations of greenhouse gases in the atmosphere 12 may reasonably be anticipated to endanger the public 13 health and welfare of current and future U.S. 14 generations is robust, voluminous and compelling, and 15 that action is both needed and duly mandated in your 16 Act now. 17 Now, the lion 's share of stationary source 18 greenhouse gas emissions comes from just a few thousand 19 very large facilities that ADOT mentions in the 20 tailoring law. It is entirely appropriate that EPA's 21 decided to phase in control requirements, focusing 22 initially only on these dominant polluters, rather than 23 on the 6 million sources that Mr. Feldman cited, even 24 though that

-- he had no record whatsoever

-- 2515

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- 4888 (unintelligible). 1 Now, because greenhouse gases are pollutants 2 due to regulation under the Clean Air Act, new 3 facilities and facilities conducting major construction 4 projects are required to use the best available control 5 technology to limit their emissions and to obtain 6 permits containing these limitations before they begin 7 construction. 8 Many of these facilities regulated, of 9 course, have long experience with this preconstruction 10 permitting process and for other pollutants, and it 11 will readily adapt the additional responsibility. And 12 we expect the technologies used to control greenhouse 13 gases, including controlling leaks, using more 14 efficient boilers, to burning cleaner fuels

-- and I'd 15 like to make that cited in our testimony

-- will be 16 familiar to most emitters and will be relatively 17 inexpensive to include in the preconstruction planning 18 process. The states, moreover, have been handling this 19 process for decades and certainly the experience and 20 expertise to begin implementing these controls. 21 I want to state briefly some of the concerns 22 EPA has raised under a 10

- year old structure. 23 (unintelligible). I mean, it's absurd. 24 Now, as to the counties, we agree with EPA 2516

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- 4888 that some state SIPs have outdated language which may 1 prevent them from including greenhouse gas controls at 2 that time. Until these states update their plans, they 3 will not be able to issue preconstruction permits to 4 polluters emitting greenhouse gases. They would have 5 to use Section 7477

-- (unintelligible). We' d like to 6 be recognized that there is no need for that and that 7 the states can avoid that. And you have to make sure 8 the states continue their primary responsibility to 9 control this emission. 10 We have a chance to require EPA 11 (unintelligible). We also agree that EPA has the 12 authority to issue the SIP as soon as, in this 13 instance, (unintelligible). We agree with EPA that the 14 January 2, 2011 control deadline is approaching 15 quickly, and it makes sense to issue a SIP call by 16 December of this year and establi sh reasonable 17 deadlines per Section 7410 (k)(5) and work with the 18 states. We also hope that many states will take EPA's 19 offer to take earlier deadlines. 20 (Unintelligible.) 21 MS. SUTTON: Segall testimony. Thank you. 22 Next registered speaker, Janet Phoenix. 23 DR. PHOENIX: Good morning. My name is 24 Dr. Janet Phoenix. I'm executive director for the 2517

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- 4888 Coalition for Environmentally Safe Communities. CESC 1 is an EPA grantee through the collaborative problem

2 solving grant process, and we coordinate a coalition of 3 organizations here in the District of Columbia called 4 the D.C. Environmental Health Collaborative. And I'm 5 here in that capacity, although I'm also an assistant 6 professor in the Department of Health Policy at George 7 Washington University in the School of Public Health, 8 but that's for identification purposes only. I'm not 9 here speaking on GW's behalf this morning. 10 I'm really here on behalf of the D.C. 11 Environmental Health Collaborative to encourage the 12 adoption of very strict enforcement policies and the 13 adoption of this proposed rule. It's our viewpoint, 14 speaking on behalf of children here in the District of 15 Columbia, that we are in favor of the most protective 16 process possible to ensure positive health outcomes for 17 children. 18 It is our concern that exposure to pollutants 19 is a hazard and has resulted in adverse health effects, 20 particularly childhood asthma, here in the District. 21 But this also has an impact on the health of the 22 elderly as well, people with chronic conditions, 23

co -morbid conditions such as congestive heart failure 24 or chronic obstructive pulmonary disease. And so we're 2518

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- 4888 in favor of the most protected environment possible to 1 ensure the least exposure for these vulnerable 2 populations. 3 As you are probably well aware, African 4 American and Hispanic children are disproportionately 5 impacted by poor air quality, which has been associated 6 with asthma, increases in exacerbations, attacks, but 7 also has been implicated in the development of this 8 disease and may be, in part, responsible for 9 differences that we see in the incidence of this 10 disease in African American and Hispanic populations, 11 particularly those who live in urban areas. 12 So, therefore, I would encourage the Agency 13 to be forthcoming, to help protect children living in 14 the District of Columbia and the areas of concern, but 15 also in other areas of the country, other cities, and 16 other urban areas where vulnerable populations may 17 live. And so I'm speaking specifically on behalf of 18 vulnerable populations in the District of Columbia, but 19 generally on behalf of vulnerable populations across 20 the country, to take this protective approach and do 21 what's appropriate. It's long overdue. Thank you. 22 MS. SUTTON: Thank you. Phoenix testimony. 23 Our next registered speaker is not scheduled 24 until 1 0:00. 2519

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- 4888 If Andy Wilson would like to speak now or 1 wait until 10:00? Andy Wilson? 2 We'll adjourn the hearing for a break, 3 resuming at 10:00 a.m. Thank you. 4 (Whereupon, a recess was taken.) 5 MS. SUTTON: Again, good morning. My name is 6 Lisa Sutton. I 'm with the New Source Review Group in 7 EPA's Air Quality Policy Division in the Office of Air 8 Quality Planning and Standards. Joining me on the 9 panel is Anna Wood, also from OAQPS. 10 We'll reopen this public hearing. If you 11 weren't here for the opening, I'll ask that you please 12 state your name and your affiliation when you come to 13 the podium to speak to present your testimony. It 14 would also help the court reporter in preparing our 15 transcript if you spell your name. If you wish to 16 speak but are not already registered to speak, please 17 check in with our staff at the table located just 18 outside the entrance to this room. 19 Our next registered speaker, Andy Wilson. 20 MR. WILSON: Good morning. Ms. Sutton and 21 other members of this distinguished board. My name is 22 Andy Wilson. I'm a public citizen, specifically Public 23 Citizen's Texas office, where I'm a climate change 24 analyst. 2520

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- 4888 It's my pleasure to be here today on this 1 great anniversary, the 40th anniversary of the signing 2 of the Clean Air Act, and give comment on the creation 3 of the state implementation programs and federal 4 implementation programs on greenhouse gases. 5 Public Citizen is a nationwide, non

-profit 6 consumer advocacy group, founded in 1971, and our 7 office in Texas has been open since 1985. Because 8 energy is oftentimes, depending on where you are in the 9 socioeconomic ladder, anywhere from the second to your 10 fifth largest family expense that you pay every month, 11 we view energy as a prime consumer issue, and climate 12 change, because of its likely impacts on the energy 13 sector, an equally important consumer issue. 14 Public Citizen Texas has been at the 15 forefront of advocating for renewable energy and the 16 push for renewable portfolio standards and other 17 alternative energy programs within the state of Texas, 18 which has led to Texas being the number one builder of 19 green energy in the United States. However, Texas 20 presents a challenge for federal greenhouse gas rules 21 for the following reasons. 22 First, we're the number one emitter of 23 greenhouse gases in the country, so much so that we are 24 double what the next closest state is, which I believe 2521

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- 4888 is Pennsylvania. This is in large part due to the 1 presence of the oil and gas industry in our state and 2 the large number of refinery and petrochemical plants 3 in the s tate, and also our reliance upon coal

- fired 4 power due to the vagaries of being in our own separate 5 grid and even tough (unintelligible) market. 6 To give you an idea of the scale of our 7 greenhouse gas emissions, depending on your accounting 8 and your year , we're between the sixth and the eighth 9 largest emitter of greenhouse gases in the world, just 10 the state of Texas, if you were to think of Texas as 11 our own separate country, which brings me to the second 12 problem of Texas, and that is that many people, 13 inc luding some of our highest politicians, view Texas 14 as its own separate country. 15 Texas has, to put it lightly, a troubled 16 history with the Clean Air Act, and many of these 17 recent issues go back to the previous administration, 18 the Bush administration, and recently, including 19 disapproval of our Flex permitting program, and just 20 last week, disapproving several other portions of our 21 permitting program, including minor source

-backed 22 issues. 23 Furthermore, you have the recent 24 communications between officials in the state of Texas 2522

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- 4888 and the EPA, including a letter from the Texas attorney 1 general, Greg Abbott, and TCEQ commissioner, Bryan 2 Shaw, just last month stating that they had no 3 intention of implementing any federal greenhouse gas 4 rules. Now, we can't discount that this is just 5 election year bluster; however, it is likely that even 6 if these are just candidates trying to pick a fight 7 with federal government, that should they be returned 8 to office, it's probable that they will attempt to 9 enact the same policies that are, after all, up and 10 running. 11 Regardless of whether Texas decides to create 12 a state implementation plan for greenhouse gases or 13 fails to do so and goes forfeit, we ask for the same. 14 We ask that the Clean Air Act be followed. And we are 15 here to call for that because in so many cases, Texas 16 has not been asked to follow the Clean Air Act, or has 17 not been forced to follow the Clean Air Act, as 18 evidenced by many of our programs, which are now being 19 disapproved. 20 Since it is likely that Texas will be one of 21 the only

-- although I am told now that Wyoming has 22 said they will also not create a state program. But we 23 are one of the only that will refuse to create a state 24 implementation program. We ask you to examine Texas' s 2523

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- 4888 specific place in the greenhou se gas, green world. And 1 our greenhouse gas emissions

-- create rules that are 2 tailored to those specific issues, specifically 3 relating to refineries, petrochemical facilities, 4 coal

- fired power. And in any proposed FIP, that you 5 would do the same with the state implementation 6 program. We asked that you would do this not only 7 because of the different types of emissions that we 8 have, but because of our primacy in the world of 9 greenhouse gas emissions. 10 We would ask that with any federal 11 implementation program, that there will be no 12 grandfathering of any facilities. In many cases, we 13 have fought grandfathering from other rules and we want 14 to keep that from happening, with many of our oldest 15 and biggest pollutant plants. 16 There's also the question of atta inment 17

versus non- attainment. Since it is increasingly 18 obvious from the scientific evidence that we've already 19 passed what is considered by many scientists to be the 20 safe level of greenhouse gas emissions, it's obvious 21 that we will have to create just one standard for 22

non- attainment, and be prepared, to some extent, for 23 perpetual non

- attainment because of the long

- lived 24 nature of carbon dioxide because of greenhouse gas. 2524

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- 4888 And so we ask for very stringent standards so that we 1 can not only curb the growth of our emissions, but 2 eventually get to a place where we can begin to cut 3 down, and where we return to a safer level below 370 or 4 350 parts per million in the atmosphere. 5 It's probable that in order to do this rule, 6 we have to employ other measures beyond just new source 7 review. If you have any leeway as for further arrows 8 in your quiver, we believe that it might be smart to 9 create a kind of cash for clunkers program for 10 coal

- fired power because it is likely that in many 11 cases that will mean fuel switching to natural gas or 12 to wood pellets, or some other form of fuel, and that's 13 going to require a retrofit. And if there were a pool 14 of money set aside to be able to help plants cut their 15 emissions in the best way possible and modernize a very 16 old fleet of coal

- fired power plants, that would be 17 something we would support. 18 That's my testimony for today, and I thank 19 you for your time. 20 MS. SUTTON: Thank you very much. 21 This is your opportunity to register to speak 22 at this time. If we have no additional registered 23 speakers, we have a long lull this morning until our 24 lunch break. If you don't sign up now, we'll close the 2525

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- 4888 hearing at this point. We open at 2 p.m. 1 (Pause.) 2 MS. SUTTON: For now, the hearing is closed. 3 (Whereupon, a recess was taken.) 4 MS. SUTTON: Our next speaker will be 5 Antigone Ambrose. 6 MS. AMBROSE: Good morning. My name is 7 Antigone Ambrose. 8 [30

- second audio gap: Ms. Ambrose identified 9 herself and her affiliation with the Sierra Club and 10 its support for the proposed rulemaking.] 11 (Whereupon, at 10:32 a.m., a lunch recess was 12 taken.) 13 // 14 // 15 // 16 // 17 // 18 // 19 // 20 // 21 // 22 // 23 // 24 // 2526

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- 4888 A F T E R N O O N S E S S I O N 1 (2:00 p.m.) 2 MS. SUTTON: I'll run through the 3 introduction more briefly than this morning. 4 Thank you all for attending this pub lic 5 hearing held by the U.S. EPA. We're holding this 6 hearing to take comment on EPA's proposed rulemaking 7 entitled, Action to Ensure Authority to Issue Permits 8

under the Prevention of Significant Deterioration 9 Program to Sources of Greenhouse Gas Emissions: Federal 10 Implementation Plan. This proposes a federal 11 implementation plan that would apply as early as 12 January 2, 2011 in any state that is unable to submit a 13 state implementation plan, or SIP , revision, to ensure 14 that the state has authority to issue permits under the 15 PSD program for sources of greenhouse gas emissions. 16 This proposed rulemaking was published in the Federal 17 Register on September 2, 2010, at page 53883. 18 My name is Lisa Sutton. I'm an environmental 19 engineer in the New Source Review Group in EPA's Air 20 Quality Policy Division of the Office of Air Quality 21 Planning and Standards, and I'm chairing today's 22 hearing. 23 To recap my formal introduction of this 24 morning, at today's hearing, we're accepting oral 2527

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- 4888 comments on our proposed FIP, and we 'll be preparing a 1 written transcript of this hearing. The transcript 2 will be available to the public as part of the official 3 record of this rule, and EPA will consider both oral 4 comments and written comments as we move forward in the 5 rulemaking process. 6 We're accepting written comments on the 7 proposed rule until October 14, 2010, and we have a 8 fact sheet available in the registration area that 9 summarizes our proposed action, and it includes 10 detailed information for submitting written comments. 11 If you wish to speak but have not already 12 registered to do so, please check in with our staff at 13 the registration table

-- we can accommodate 14 you -- located just outside the entrance to this room. 15 We intend to stay until either 6 p.m. this evening or 16 one hour after the last registered speaker has spoken, 17 whichever is earlier. 18 Again, thank you for participating in our 19 public hearing today. I'll reopen the floor for oral 20 testimony. 21 Our first speaker scheduled, Dr. Brenda 22 Ekwurzel. If you'd come to the podium, we'd ask that 23 you state your name and affiliation. And it will help 24 our court reporter if you could spell your name as 2528

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- 4888 well. 1 DR. EKWURZEL: Good afternoon. I'm 2 Dr. Brenda Ekwurzel. I'm a climate scientist and 3 assistant director of Climate Research and Analysis at 4 the Union of Concerned Scientists. Thank you for 5 hearing my testimony today. 6 On behalf of our members, the Union of 7 Concerned Scientists supports EPA efforts to ensure 8 state permitting programs comply with the 9 administration's regulations on industrial sources of 10 greenhouse gas emissions. Such programs would be in 11 line with the best available science, which indicates 12 the need for urgent actions to reduce global warming 13 emissions. Unabated, overloading our atmosphere with 14 heat

- trapping gas es poses significant risks to human 15 life, health and well

-being. 16 Today is the 40th anniversary of the Clean 17 Air Act, and over the last 40 years, this law has saved 18 hundreds of thousands of American lives and has allowed 19 the government to keep up with the best available 20 science on air pollution. In your report series, the 21 Benefits and Costs of the Clean Air Act, it projects 22 that in 2010 alone, the Clean Air Act is likely to 23 save, on average, 23,000 lives and prevent nearly a 24 million to over 2 million asthma attacks, and, on 2529

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- 4888 average, 4 million lost work days, and between 23,000 1 and 144,000 hospitalizations and/or emergency room 2 visits. In its first two decades alone, it created 3 benefits valued at over $ 22 trillion. That's 42 times 4 greater than the estimated cost of its regulations. 5 Climate change has the potential to risk 6 countless lives in the U.S. According to the National 7 Weather Service, between 2000 and 2009, fatalities from 8 heat, hurricanes and floods were the top three 9 dangerous natural hazards for the U.S. citizens. 10 Excessive heat can kill us. We can overheat if our 11 steady, core body temperature of 98.6 degrees 12 Fahrenheit rises with sustained skin temperatures above 13 95 degrees Fahrenheit. If our skin is not sufficiently 14 colder than our core, the body cannot cool itself by 15 conducting metabolic heat to the skin. Once the heat 16 is transferred to the skin, then a breeze or low 17 humidity are critical for sweat to evaporate and help 18 us cool down. 19 Despite modern technology and emergency 20 response mea sures, heatwaves in Chicago and Europe in 21 1995 and 2003 still took an excessive toll, with over 22 35,000 deaths. Researchers estimated it is very 23 likely, with greater than 90 percent confidence level, 24 that the role of human

- induced climate change doubled 2530

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- 4888 the risk of exceeding the average 2003 summer 1 temperature in Europe. 2 Shifts in precipitation also threaten human 3 health. On average, in the United States, the amount 4 of rain or snow falling in the heaviest 1 percent of 5 storms has increased nearly 20 percent, almost three 6 times the rate of increase in total precipitation since 7 1958. For some regions of the United States, these 8 percentages can go up as high as 67 percent increase in 9 the amount of rain or snow falling in the heaviest 10 precipitation events. This is a well

- known consequence 11 of a warming planet that has both increased the 12 evaporation rates, delivering more water to a warmer 13 atmosphere that can hold higher relative humidity. 14 In places where rain or snow occur, light 15 precipitation events are dropping less rain or snow on 16 average, and heavier precipitation events are dropping 17 more rain or snow on average. Ironically, this trend 18 creates conditions that are more likely to produce both 19 intense drought periods punctuated by floods, often in 20 the same region. 21 A study by Ashley & Ashley in 2008 analyzed 22 flood fatalities between 1959 and 2005 in the 23 contiguous United States, excluding those from 24 Hurricane Katrina. Texas had the largest total number 2531

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- 4888 of fatalities from flash floods and river floods over 1 the study period. When standardized for population, 2 South Dakota, Mississippi, West Virginia and Montana 3 have the largest fatalities per 100,000 people from 4 flooding. 5 Those between the ages of 10 and 29 and over 6 60 years old were disproportionately at risk. Although 7 human behavior contributed to these flood statistics, 8 there is strong evidence that conditions that put 9 people most at risk in the first place, flash floods, 10 are due, in part, to the shift in the baseline to more 11 extreme precipitation events in a warming world. 12 This makes me wonder if it is entirely honest 13 to call these natural hazards. This gives a false 14 impression, as it does not acknowledge the growing role 15 of climate change and shifting the baseline conditions 16 within which weather events spawn. There can be no 17 doubt that when a storm forms over an ocean, or over a 18 valley, the initial conditions of local sea surface 19 temperature and atmospheric humidity are intimately 20 linked to a warmer planet compared to a hundred years 21 ago. 22 We must improve our weather warning systems, 23 emergency response plans, public health, education, and 24 so on. It is entirely prudent for the Environmental 2532

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- 4888 Protection Agency to address the root cause, greenhouse 1 gas emissions, that are causing the climate to change 2

even further. Extreme weather events are increased in 3 severity, and this is only the very beginning of what 4 we risk if we allow heat

- trapping gases to accumulate 5 in the atmosphere. 6 According to the U.S. Global Change Research 7 Program Report in 2009, the 1

- in

- 20

- year heavy downpour 8 is expected to be between 10 and 25 percent heavier by 9 the end of the century than it is now. According to 10 studies published in the Journal of Science and Nature, 11 if heat

- trapping emissions continue to [] unabated, a 12 heatwave similar to the 2003 event could occur every 13 other year in Europe by the end of this century and be 14 considered quite an ordinary summer, which is 15 considered quite extraordinary in today's climate. And 16 remember, this heatwave took between 35,000 and 50,000 17 lives. 18 It is extremely important that the EPA comply 19 with the requirements under the Clean Air Act to take 20 over permitting programs for states that can't or won't 21 comply with greenhouse gas rules. The Clean Air Act 22 has been so successful because, on it s heart, it is 23 driven by the best available science. Historically, 24 the Clean Air Act has been used to respond to 2533

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- 4888 scientific findings about the dangers of exposure to 1 smog, lead, particulate matter, and acid rain. Now, we 2 know that overloading our atmosphere with carbon 3 dioxide is dangerously altering our climate and 4 threatening public health, including more extreme 5 weather events and as a catalyst for the creation of 6 more ground

- level ozone or smog, a conventional 7 pollutant when fossil fuel emissions are present at 8 similar levels. 9 Nearly all the studies to date find that more 10 heat

- trapping gases in the atmosphere mean more likely 11 risks of severe events that are most threatening to 12 human life. Knowing that future studies will only 13 refine this general trend implies that, as a society, 14 we would be wise to improve plans to adapt to what 15 historic heat

- trapping emissions have already locked in 16 for the next couple decades, and at the same time, 17 reduce global warming emissions so that the following 18 decades do not put even more lives at risk. 19 We hope that the states will meet their 20 deadlines in preparing their plans for upcoming 21 greenhouse gas regulations, and that the EPA will move 22 forward on their own if the states cannot meet their 23 deadline. By holding up the requirements of the Clean 24 Air Act, the Environmental Protection Agency can live 2534

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- 4888 up to its name and protect the citizens of the United 1 States, and perhaps many people around the world, by 2 implementing sound regulations to swiftly and deeply 3 reduce national global warming emissions. Thank you. 4 MS. SUTTON: Thank you. That was Ekwurzel's 5 testimony. 6 We have only one other registered speaker 7 this afternoon. That's William Snape. 8 MR. SNAPE: Good afternoon, Ms. Sutton, EPA, 9 members in the audience. I am senior counsel with the 10 Center for Biological Diversity. We're based in 11 Tucson, Arizona. We have a climate law institute in 12 San Francisco, California. We'll be submitting written 13 comments that will be much more detailed than the 14 overview I will give this afternoon. To the extent 15 there is any contradiction between the two, and I don't 16 imagine there would be, I think our written comments 17 will be the comments that we will eventually adhere to. 18 I should note that I'm also a practitioner in 19 residence at the American University Law School, the 20 Washington College of Law. I have looked at the Clean 21 Air Act, both as a practitioner and as a professor. I 22 have studied it for over 20 years. And like my 23 preceding speaker, I do want to talk about the factual 24

context in which we are having this discussion. This 2535

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- 4888 is ultimately a very legalistic set of questions you're 1 presenting, and I appreciate that, and I will attempt 2 to answer those questions. But I think why it matters 3 and what the point is for this effort i s highly 4 relevant. 5 Building upon the Union of Concerned 6 Scientists spokesperson's testimony, we are seeing 7 example after example , just even within the last year, 8 and certainly within the last decade, of the 9 deleterious impact global warming and associated 10 climate change are having upon not only the natural 11 world but also human beings specifically. 12 We are seeing sea level rise. We are seeing 13 and predicting sea level rise will continue to 14 accelerate. We are seeing floods in Pakistan; 15 heatwaves in Russ ia; storms such as Hurricane Katrina, 16 certainly not limited to , a prolonged drought in the 17 Colorado River Basin, for which much of the West 18 depends upon their livelihood; predictions that a third 19 of Florida may be under water by the year 2100; a 20 melting arctic that is warming twice as fast as the 21 rest of the planet; chunks of Greenland and Antarctica 22 breaking away from their continental base. The 23 examples go on and on. 24 From the Center's point of view, we have 2536

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- 4888 traditionally focused on plants and animal s and their 1 natural habitats. That was how the organization was 2 founded. There's no doubt that biological diversity as 3 we know it is absolutely being negatively impacted by 4 global warming and climate change and that this climate 5 change, as I said, is having a negative impact upon 6 humans, and will only get worse. So that is the 7 factual context, and that's why we're here. 8 What's interesting about the proposal

-- and 9 by the way, I should just note, quite straightforwardly 10 and for the record, that we strongly support EPA's move 11 to fully implement the Clean Air Act to address climate 12 change. We think the plain language of the statute in 13 the legislative history makes it clear that the Agency 14 has full authority to do so. The Supreme Court has 15 already affirmed that authority, and I think public 16 opinion is on your side as well. 17 It's ironic that as I stand here today, there 18 are efforts in Congress

-- which I know are not 19 relevant to this hearing today, but actually in some 20 ways still are relevant to this, at least 21 potentially

-- to somehow abridge the authority of the 22 Environmental Protection Agency. And we can't predict 23 right now what will happen with that, and it's outside 24 the purview of this particular hearing. But the reason 2537

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- 4888 I raise it is that it's indicative of the backlash that 1 industry is engineering. And by industry, I mean the 2 coal industry, the oil industry, the American Petroleum 3 Institute, the Chamber of Commerce, who look at things 4

on a quarterly, for

-profit basis and are not looking at 5 the annual decade

- and century

- long impacts that this 6 will have upon the United States and the rest of the 7 world. 8 So that's the context in which EPA is 9 proposing these actions and ha s finalized some of the 10 actions they've already finalized, such as the 11 tailoring rule, which I'm going to talk about in a 12 little bit. EPA's absolutely under incredible pressure 13 from these industrial interests, but I would opine, and 14 I think the public opinion polls back me up, that the 15 public, when presented with the facts in a cl ear way, 16 is behind EPA, and is behind the Clean Air Act, which 17 has not only science

-based standards but flexibility as 18 well. The best available control technology standard 19 as an example for stationary sources is ultimately a 20 very flexible standard for whi ch the Agency is given 21 deference, in general, and for which it can take into 22 account socioeconomic issues, to the extent that they 23 are relevant. So I think the Clean Air Act is 24 perfectly situated to address greenhouse gases and 2538

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- 4888 greenhouse pollutants, such as black carbon. 1 One last threshold matter

-- actually, two 2

more -- before I get into the question that was 3 actually presented. The first is that the Center has 4 an outstanding petition before the Agency, where we 5 would like to see the Agency enunci ate a global 6 greenhouse pollution cap under the NAAQS program. We 7 think the NAAQS program and the statute has language 8 whereby the Agency could apportion various levels of 9 greenhouse pollutants from each of the states and for 10 the country as a whole, so that, for instance, we were 11 not "carrying China's load" but taking the proportion 12 of pollution that we emit. We think as a general 13 matter, the United States needs a national greenhouse 14 pollution cap, and we believe EPA already has the 15 authority to establish one. 16 The next statement that I make actually 17 demonstrates another point that will be relevant as I 18 now head into the legal part of my presentation, which 19 is that you have to look at the Clean Air Act in its 20 entirety, all of its provisions. Whether it be mobile 21 sources, stationary sources, new source review, new 22 source performance standards, NAAQS, hazardous 23 pollutants, et cetera, they each are in different 24 sections of the Act and have different regulations that 2539

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- 4888 adhere to them, but they are interrelated . They work 1 together. And so, many of the things I will talk about 2 legally today are related to NAAQS and are related to 3 themselves in many ways. 4 We supported the Agency's endangerment 5 finding. Congratulations on that. That was long 6 overdue by the previous administration, which dragged 7 its heels. 8 In terms of the specific question that has 9 been presented on the Federal Implementation Plan, go 10 forth. Implement fully. Use all your authorities. I 11 think there are some states, such as Connecticut and 12 California, that are making good

- faith attempts right 13 now to deal with how their state implementation will 14 deal with the federal Act. Certainly, I think the 15 Agency ought to work with those states. 16 I think there are other states, such as 17 Alaska and Texas, that are being quite recalcitrant, 18 and I think the EPA ought to use its powers to the 19 fullest extent, particularly in Texas, where I think 20 the governor's comments have been unconstructive, and 21 ultimately illegal, to demonstrate under the supremacy 22 clau se of the Constitution that it is the federal 23 government, under the laws that Congress passed, that 24 implements this statute and will dictate the terms if 2540

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- 4888 the state will not or cannot. Those are just two 1 examples. 2 In terms of the tailoring rule, which is in 3 litigation right now, the beginning of litigation, as I 4 think some of you know, the Center, and myself 5 personally, I agree with the philosophy of the 6 tailoring rule. And by the philosophy, I mean that I 7 believe the Agency has the authority, and that it 8 logistically makes no sense for EPA to begin regulating 9 households, small businesses, schools and the like. 10 And I think the tailoring rule, as an overview, 11 attempts to effectuate that goal. 12 However, when you read the final tailoring 13 rule, which I believe is weaker than the proposed 14 rule

-- but when you read the final tailoring rule in 15 conjunction with the Johnson memo and the Jackson memo, 16 which has now postdated the Johnson memo

-- some of 17 this stuff gets pretty wonky and acronymed fast. So 18 I'm calling it the Jackson memo, the most recent 19 iteration of the Johnson memo. 20 Unfortunately, I think because of the 21 aforementioned industry pressure I discussed, there has 22 been a backtrack at some of the thresholds. And so 23 now, for instance, entities such as coal

-burning power 24 plants, such as industrial boilers, such as oil 2541

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- 4888 refineries, that are between 25,000 tons of carbon 1 dioxide and 75,000 tons

-- or 74,999 tons per year of 2 carbon dioxide

-- get a free pass until at least 2016 3 under the tailoring rule and the Jackson memo, read in 4 combination. And, in fact, under the Jackson memo, it 5 appears, through our reading, that EPA could punt 6 indefinitely on those sources. And just to put it in 7 the context, even 25,000 tons of carbon dioxide is a 8 lot of pollution . We think the threshold could be 9 perhaps lower. 10 So we're not talking about mom- and

-pop shops 11 emitting 50,000 tons of carbon dioxide a year. None of 12 us in this room, cumulatively, in our individual lives, 13 come anywhere close to that, despite the rhetoric we 14 hear and the fear

-mongering by some of those industrial 15 lobbyists. 16 One of the things that EPA could also do most 17 immediately, in addition to regulating some of these 18 not mega polluters but still the very big polluters 19 that this 25

- to 75,000

- ton threshold shows, as I was 20 just discussing, is to be more aggressive on 21 fast

- acting greenhouse pollutants, such as black carbon 22 and methane. I'm not totally pleased with how the 23 Agency dealt with black carbon in the endangerment 24 finding. We'll see how that plays itself out. Other 2542

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- 4888 rules that EPA is promulgating seems to be addressing 1 black carbon, and that is good. 2 I've told the Agency and the State 3 Department, and anyone else who will listen, that black 4 carbon reductions around other parts of the 5

wo rld

-- China, Indian, Pakistan, to name 6 three

-- reducing their black carbon would have 7 tremendous public health benefits, tremendous global 8 warming abatement benefits, American economic 9 opportunities, and I think if you think about those 10 three countries, and there are others, some diplomatic 11 benefits as well. Those are three of the highest black 12 carbon

- emitting countries in the world. 13 Methane. We could be regulating methane 14 today if we wanted to be, and I think we should be more 15 aggressive. Methane does not stay in the atmosphere as 16 long as carbon dioxide, so reducing it would actually 17 have a positive impact in the short term and would give 18 us some time to deal with carbon dioxide. And it also 19 is 22 times more powerful than carbon dioxide. So 20 methane from landfills, from agricultural operations 21 and the like should be addressed right away. 22 So, in conclusion, interpret the Act and 23 implement the Act to its fullest, EPA. I know it's 24 hard. I know it's not always easy politically. But 2543

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- 4888 it's the right thing to do, and you have the legal 1 authority to do so. The Clean Air Act has the 2 flexibility and the scientific standards. The rule of 3 law and the weight of history is on your side. Thank 4 you. 5 MS. SUTTON: Thank you. That was Mr. Snape's 6 testimony. 7 I don't believe we have any other registered 8 speakers. For this reason, I will close the floor to 9 public testimony, adjourn, until 3:30 at the latest, at 10 which point we will conclude today's public hearing. 11 So, thank you. 12 (Whereupon, a recess is taken. ) 13 MS. SUTTON: This is Lisa Sutton. The time 14 is approximately 3:40 p.m. We will now conclude this 15 public hearing. Thank you. 16 (Whereupon, at 3:40 p.m., the hearing was 17 concluded.) 18 // 19 // 20 // 21 // 22 // 23 // 24 // 2544

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- 4888 CERTIFICATE OF REPORTER 1

I, JANET EVANS
-WATKINS , do hereby certify that the foregoing proceedings were taken by me and thereafter reduced under my direction to typewritten form; that this transcript is a true record of the proceedings; that I am neither counsel for, related to, nor employed by any of the parties to this action; and, further, that I am not a relative or employee of any attorney or counsel employed by the parties hereto, nor financially or otherwise interested in the outcome of this action.

JANET EVANS
- WATKINS 2 Digital Reporter 3