TESTIMONY OF SENATOR DANIEL PATRICK MOYNIHAN (D-NY)
BEFORE THE SUBCOMMITTEE ON CLEAN AIR, WETLANDS,
PRIVATE PROPERTY AND NUCLEAR SAFETY,
COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
TUESDAY, OCTOBER 6, 1998

Good morning, Mr. Chairman. Thank you for holding this hearing on acid deposition. I appreciate the opportunity to testify on two bills Senator D'Amato and I have introduced, S. 1097 and S. 2377, legislation to require additional reductions in utility sector emissions of sulfur dioxide (SO2) and nitrogen oxides (NOx), and to reduce the sulfur content in gasoline, respectively.

We have come a long way in understanding the causes and effects of acid deposition and ways to control it. But we have a long way to go yet. We have learned, for instance, that the SO2 emissions reductions required under the Clean Air Act Amendments of 1990 ("1990 Amendments") are insufficient to prevent the continued acidification of many lakes and further damage to sensitive ecosystems. We also have learned that legislation containing regulatory flexibility and market incentives is preferable to the traditional "command and control" approach.

Perhaps most importantly, since the 1990 Amendments were enacted, we have learned that nitrogen oxides, which we largely ignored eight years ago, are significant "precursors" of acid deposition. And we have learned that acid deposition does not cause environmental degradation just in remote, high-elevation forests and lakes in the Adirondacks and northern New England. Rather, it poses a continuing and significant threat to the environmental quality of lakes, streams, forests, bays, and estuaries in numerous regions of the country, and to the health of the people who reside in these regions.

And so Senator D'Amato and I have introduced two bills, each of which addresses different facets of the acid deposition problem: one targets stationary sources of SO2 and NOx, the other targets mobile sources of NOx. The first, S. 1097, is modeled after and builds on the Environmental Protection Agency's (EPA) Sulfur Dioxide Allowance Program. The second, S. 2377, requires a reduction in gasoline sulfur using existing and readily available refinery technology. The cost of gasoline would rise under S. 2377 -- by a nickel a gallon at the retail level, at most. For a car driven 15,000 miles per year that achieves 15 miles per gallon, the cost of S. 2377 would be $50 annually. Keep in mind, however, that gasoline prices, adjusted for inflation, are cheaper now than they have been at any time since 1950 (the beginning point of our analysis). And the benefits to human health and the environment of reducing gasoline sulfur far outweigh this modest cost.

I think these are good bills -- good for human health and the environment, good for New York and the United States -- and I am optimistic that their essential features will be incorporated into legislation this Subcommittee and, eventually, the full Committee will report to reauthorize the Clean Air Act. Certainly, I welcome the scrutiny this hearing affords, and I look forward to working with other Committee Members on fashioning sound legislation to control acid deposition.

Background

Mr. Chairman, as far back as the 1960s, fisherman in the Adirondacks began to complain about more than "the big one that got away." Fish, once abundant in the pristine, remote Adirondack lakes, were not just getting harder to catch. They were gone.

At first, pollution seemed an unlikely cause. The lakes are in a 6 million acre park protected by the New York State Constitution. And most of them are all but inaccessible, except to determined fishermen lured by their solitude and beauty, and by what was once an enormous bounty. But the lakes, it turned out, are accessible to something besides fishermen: the winds that blow in from coal country, Appalachia.

In time, pioneering scientists such as Cornell University's Carl Schofield, Eugene Likens, and Charles Driscoll established a strong inferential link between "acid" deposition -- principally caused by burning coal upwind -- and the diminished ability of lakes in the Adirondacks to sustain healthy fish populations. Water made acidic by atmospheric deposition was leaching inorganic aluminum from the granite bedrock surrounding the lakes, and the aluminum was poisoning the fish, primarily through their gills.

Acid rain. Now there is a powerful image. Not always so. There were days when dark plumes of smoke were a sign of prosperity. During the Depression, New York City's Jim Farley, who was Postmaster General, liked nothing more than to open a new Post Office and hire a WPA artist to paint murals on its walls depicting busy factories belching smoke from their chimneys. No longer.

By the early 1970s, environmentalists were alarmed. Environmentalism is nothing if not an ethic of responsibility. Our first responsibility is to the facts. Facts about cause and effect. Facts about costs and benefits. It is not knowledge that we should fear, but the lack of knowledge.

When I entered the Senate in 1977, there was much we needed to learn about acid rain. So I introduced the first Federal legislation to address our "knowledge deficit" about acid rain: the Acid Precipitation Act of 1979. My bill was enacted into law as Title VII of the Energy Security Act, which Congress passed in June 1980 (Public Law 96-264). Title VII established the National Acid Precipitation Assessment Program (NAPAP), an interagency program charged with assessing the causes and damages of acid deposition, and reporting its findings to Congress.

NAPAP created a network of long-term atmospheric deposition monitoring stations, permanent forest plots, and lake sampling regimes. These stations and sites, which comprise the infrastructure of the National Science Foundation's Long Term Ecological Research (LTER) network, provide scientists with data sets now spanning decades across a variety of ecosystems. One of these sites, the Hubbard Brook Experimental Forest in New Hampshire, has been under continuous study for 35 years. The availability of long-term data is critical for the study of complicated ecosystems.

NAPAP spawned tremendous academic interest in the subject of acid deposition. Between 1970 and 1979, only two doctoral degrees were issued in the "field" of acid deposition -- if it could be called such at the time. From 1980 through 1989, after NAPAP was established, 71 individuals earned doctoral degrees in the field. And between 1990 and 1995, another 35 scientists earned their Ph.D.s in the field.

More than 1,700 research papers describing the results of NAPAP-funded research were published in technical journals by October 1989, when debate on reauthorization of the Clean Air Act was under way. This is a good indicator of new findings. Authors must compete for limited space in these publications. Poor science and shopworn discoveries are usually rejected. As we began consideration of the 1990 Amendments, we could glean from the technical "state-of-science" reports that at least 800 lakes and 2,200 streams in the eastern United States had been made acidic by acid deposition; at least 200 additional streams, about 10 percent more, would become acidic over the next decade without additional legislation to control emissions.

In all, some $570 million was spent to underwrite the scientific research contained in the first NAPAP report to Congress. Except for space and weapons research, NAPAP had become the Federal government's biggest scientific undertaking in history. It continues.

I was an original co-sponsor of the Clean Air Act Amendments of 1990, and I am proud of what we accomplished through that landmark legislation. Title IV of the 1990 Amendments established a "Sulfur Dioxide Allowance Program." Its creation represented a radical departure from the traditional "command and control" approach to environmental regulation common at the time. This program was the first national, statutorily-mandated, market-based approach to pollution control. It has been tremendously successful.

The SO2 Allowance Program is successful because of the flexibility it affords the affected utilities. The EPA allocated a number of allowances to each utility under the Program. Each allowance represents the limited authority of the utility to emit one ton of SO2. EPA "capped" the number of allowances to ensure an overall reduction in emissions. Each utility may choose to reduce its own emissions, or to purchase unused allowances from another utility. Further, utilities may choose to "bank" their allowances, which may be used or sold at a later date. The allowances trade quite freely, as stocks do. In fact, members of my legislative staff recently purchased two such allowances, at a discounted price of $100, which they donated to the New York-based Adirondack Council. The Council, in turn, "retired" the two allowances, which is their right under the Program.

This past August, NAPAP issued another report. It states that we have made progress under the SO2 Allowance Program toward our goal of protecting sensitive ecosystems from the scourge of acid rain since 1990. In 1995, the first year of the program, SO2 emissions declined dramatically, to nearly 5 million tons below 1980 levels -- a reduction which was 39 percent ahead of the Program's target. Large areas of the eastern United States saw up to a 25 percent decrease in sulfate concentration levels in the air and in the acidity levels of wet deposition. Between 1989 and 1995, monitoring stations at eastern sites showed dry deposition of sulfur dioxide and sulfates decreased by 35 and 26 percent, respectively. Concentrations of sulfates in lakes and streams have decreased in many areas, with evidence of some recovery from acidification in New England.

Resources For the Future (RFF) scientists and economists conducted an analysis to estimate the benefits from reduced risk of human health effects resulting from SO2 emissions reductions required under Title IV of the 1990 Amendments. The RFF analysis estimates mortality benefits ranging from $1,075 to $15,020 per ton of reduction in SO2 emissions. Even the lowest benefit exceeds the cost per ton of emissions reduction by more than a factor of ten. (The price of allowances reflects the control costs for SO2 emissions reductions. The price of an allowance has dropped from an estimated $500 per ton when the 1990 Amendments were passed to about $100 per ton currently.)

The median value of benefits from reduced risk of human morbidity effects estimated in the RFF analysis is an additional $475 per ton of SO2 emissions reduction. The RFF analysis is consistent with analyses conducted by EPA staff on the magnitude of health benefits.

Reductions in SO2 emissions have provided substantial improvements in visibility, especially in the eastern United States. EPA estimates that reductions in SO2 emissions so far have resulted in a 20 percent reduction in regional haze in large areas of the eastern United States. Researchers have estimated monetary benefits to residential areas in 31 eastern states and to national parks in the southeastern states of $3.4 billion (1994 dollars) in 2010, or about $377 per ton of SO2 reduction.

Perhaps the most pleasant development with regard to the SO2 Allowance Program has been program compliance and cost. Because of the Program's flexibility, the compliance rate is 100 percent. The cost of compliance has been less than half of what was projected in 1990. Actual costs of compliance for 1995, for instance, are estimated at $726 million. The General Accounting Office (GAO) had estimated in 1994 that the costs of compliance for 1995 would be $1.2 billion. Estimates of total costs of Title IV compliance continue to be revised downward.

The market flexibility provided by allowance trading promotes innovation and competition in emissions reduction technologies. This flexibility has allowed reductions to be made at sites where they could be achieved in the most cost-effective manner. Studies conducted since 1990 have estimated that the cost savings due to emissions trading, compared to the cost of a traditional command-and-control approach, has been between $230 million and $600 million per year.

S. 1097: Addressing Stationary Sources of SO2 and NOx

We can be proud of our accomplishments thus far. But we must look carefully at the scientific data before we conclude that our work is done in controlling SO2 emissions. The data indicate that the 1990 Amendments did not go far enough to prevent continued damage from acid rain. For example, the August 1998 NAPAP Report contains an assessment of long-term data collected at monitoring sites in the Southern Appalachians which indicates that sulfate concentrations of surface waters have been increasing consistently for more than a decade. The majority of Adirondack lakes have not shown recovery from acidity levels, and the most sensitive Adirondack lakes continue to acidify.

So Senator D'Amato and I introduced S. 1097, the Acid Deposition Control Act of 1997. Our bill would require additional reductions in emissions of 50 percent for SO2, and 70 percent for NOx, from the electric utility sector. It would also require the EPA to develop measurable indicators of ecosystem health to evaluate the effectiveness of the Agency's Acid Rain Program.

S. 1097 would require reductions in SO2 emissions beyond those provided for in Phase II of the existing Program. In light of the impressive success and cost effectiveness of the SO2 Allowance Program, our bill is designed to build onto it as seamlessly as possible. In effect, our bill establishes a "third phase" under the existing SO2 Allowance Program. Under the proposed Phase III, total utility emissions of SO2 would be reduced to just under 4.5 million tons per year -- a 50 percent reduction.

The Importance of Nitrogen

We have learned a great deal about the science of acid rain in the years since the 1990 Amendments. Perhaps the most important insight we have gained from the last decade of scientific research is that the emission of nitrogen oxides (NOx) contributes significantly to acid deposition. We now know that nitrogen is quantitatively as -- or, in some cases, more -- important than sulfur as a cause of both chronic and episodic acidification.

Normally, terrestrial and aquatic plant growth is limited by the availability of nitrogen. Inputs of new nitrogen from atmospheric deposition (as opposed to nitrogen recycled within the ecosystem) have caused some forests to become "nitrogen saturated." Nitrogen saturation is accompanied by depletion of soil base cations (which are nutrients) such as calcium that buffer the soil from acidity. The soil chemistry changes, affecting forest health. And increases in soil acidity affect the pH of drainage water which empties into lakes and streams. Chronically high nitrate concentrations have been documented in lakes and streams in a variety of locations throughout the United States, including the San Bernardino and San Gabriel Mountains within the Los Angeles air basin, the Front Range of Colorado, the Allegheny Mountains of West Virginia, the Catskill Mountains of New York, and the Great Smoky Mountains of Tennessee.

We also have gained an improved understanding of the importance of episodic acidification. In 1990, the best science available at the time indicated that chronic acidification posed the greatest threat to sensitive ecosystems. We now know that episodic acidification -- short-term drops in the pH of lakes and streams during periods of high water flow, such as storms and snow melt -- can be extremely damaging to ecosystems, too. We now understand that nitrogen plays a more important role in these acidic episodes than does sulfur.

Episodic acidification is ubiquitous in our surface waters. Nearly all lakes and streams throughout the United States, Canada, and Europe experience increased acidification during high water flow events. Biological effects on fish in acidified lakes and streams are largely attributable to increased concentrations of dissolved aluminum. The aluminum is transported to drainage waters from soils which have been leached by excess nitrates. We know that much of the nitrates accumulate in the soil as a result of acid deposition.

Since 1990, we have become much more aware of the problem of eutrophication of bays and estuaries. Through a combination of monitoring, experimental research, and modeling, scientists better understand the effects of atmospheric deposition of nitrogen to these near-coastal waters. Excessive nitrogen loading causes eutrophication, which is the increase in the rate of supply of organic matter to an ecosystem. The consequences of eutrophication include massive die-offs of estuarine and marine plants and animals; loss of biological diversity; growth of nuisance algae potentially toxic to humans and marine animals, such as pfisteria; and damage to ecosystems which endangers the sustainability of local fisheries resources.

Atmospheric deposition is a significant source of nitrogen loading to coastal waters stretching from the Gulf Coast around and up the entire length of the eastern seaboard. For example, the Chesapeake Bay is believed to receive 27 percent of its nitrogen load directly from the atmosphere. For Tampa Bay, the figure is 28 percent. For the coastal waters of the Newport River in North Carolina, between 35 and 80 percent.

In 1997, the Ecological Society of America convened a workshop to consider atmospheric nitrogen deposition to coastal watersheds. The participants in the workshop included eminent scientists, coastal managers, and national policy makers. The workshop report concludes that atmospheric deposition of nitrogen must be included in policy and coastal management plans to address coastal eutrophication problems successfully.

EPA NOx SIP CALL

Just two weeks ago, the EPA released its Final Rule to reduce the emissions of nitrogen oxides from the utility sector. The EPA plan, patterned after the highly successful "cap-and-trade" allowance program for SO2 emissions, is designed to reduce levels of NOx emissions which contribute to ground-level ozone in urban areas. The Final Rule is likely to increase the air quality significantly in urban areas during the summer "ozone" season, and to protect urban populations from the deleterious health effects caused by exposure to ozone.

The EPA's Final Rule, however, is not designed to solve the problems caused by acid deposition. The EPA's NOx "cap-and-trade" allowance program outlined in the Final Rule is seasonal, regional, and voluntary. While the Final Rule is an appropriate way to address urban ozone levels, solving the problems of acid deposition will require a more comprehensive approach.

Nitrogen emissions contribute to acid deposition to forests, lakes, streams, and estuaries on a year-round basis. From an environmental (as opposed to health) standpoint, acid deposition may be more important during the winter months than during the summer. NOx emissions during the winter months contribute to stockpiles of acidified snow, which cause extremely acidic episodes in lakes and streams during the spring thaw. Many aquatic systems are most biologically sensitive at precisely this time, during the spring spawning season.

Recognizing the need for reductions in nitrogen emissions throughout the year, our bill -- S. 1097 -- establishes a year-round cap-and-trade program for NOx emissions from the utility sector. Because of the particular health risks of urban ozone formation during the summer months, S. 1097 requires utilities to surrender two allowances for each ton of NOx emitted between the months of May through September. During the remainder of the year, only one allowance is required to produce one ton of NOx emissions. In this way, utilities are encouraged to make their most stringent emissions reductions during the summer months, when the collective risk to human health is higher.

The NOx cap-and-trade program proposed by EPA is a regional program because it has been envisioned as a response to a regional problem -- the problem of urban ozone. The problem of acid deposition, however, is not limited to the Northeast. As I noted earlier in my testimony, eutrophication is adversely affecting the coastal waters throughout the eastern seaboard, including the Chesapeake Bay and Long Island Sound, and the Gulf of Mexico. Forests, streams, and rivers in the Southern Appalachians, the Front Range of Colorado, and the San Bernardino Mountains in California are also showing the effects of acidification and nitrogen saturation.

The best scientific data available indicate that emissions of NOx, like SO2, are transported across state lines. A recent report released by Northeast States for Coordinated Air Use Management (NESCAUM) concludes that several northeastern states will be unable to attain the health-based air quality standards set by EPA without reductions in the emissions levels transported to the Northeast from upwind states. Moreover, several urban centers in the western part of the country have already recorded numerous "exceedances" of permissible air pollution levels established by EPA. Consequently, a national emissions reduction program for NOx -- as well as SO2 -- is required.

S. 2377: Addressing Mobile Sources of NOx

It is worth noting that utility emissions are not the only significant source of NOx emissions. When we designed the SO2 Allowance Program in 1990, our task was simplified by the fact that over 85 percent of SO2 emissions originated in fossil fuel-fired electric utilities. Emissions from utilities account for just under 30 percent of total NOx emissions, roughly speaking. The share from utilities is certainly large enough that any serious program to reduce NOx emissions must address the utility sector. But another major source of NOx emissions, the transportation sector, must be addressed as well.

Earlier this year, I introduced S. 2377, the Clean Gasoline Act of 1998. This bill establishes a national, year-round cap on the sulfur content of gasoline sold in the United States. The bill would extend the so-called California gasoline sulfur standard nationwide. The benefits of reducing gasoline sulfur would be dramatic and virtually immediate.

The transportation sector accounts for nearly half of national NOx emissions. A large portion of these emissions are in the form of tailpipe exhaust from our national vehicle fleet. In recent years, advances in vehicle technology have produced Low Emission Vehicles (LEVs) -- vehicles designed to reduce vehicle emissions by 90 percent. These vehicles were first sold in New York last fall, beginning with the 1998 model year. Unfortunately, New York will not see the full air quality benefits these vehicles are capable of providing because New Yorkers do not have access to the higher quality, lower sulfur gasoline these vehicles have been designed to use.

Low Emission Vehicles were first marketed in California, where their use has contributed to significant improvements in local air quality. One reason for the success of these vehicles in California is that California adopted a maximum level for gasoline sulfur content, beginning in June 1996. In California, gasoline sulfur levels average about 30 parts per million (ppm). The national average, outside of California, is more than ten times greater -- about 330 parts per million.

The presence of sulfur in gasoline increases vehicle emissions because sulfur poisons the catalytic converter used in the vehicle's emissions control system. Sulfur is a pollutant only: its presence (or absence) does not effect engine performance. In the 1970s, we fought to remove lead from gasoline to make possible the introduction of catalytic converters. Until recently, we did not appreciate that sulfur is a catalyst poison, too. The problem is not limited to LEVs, although these vehicles are especially sensitive to gasoline sulfur. All vehicles in the national fleet with catalytic converters -- virtually all vehicles -- produce higher levels of emissions because of the high levels of sulfur in the gasoline they burn.

A recent study by the State and Territorial Air Pollution Program Administrators and the Association of Local Air Pollution Control Officials (STAPPA-ALAPCO) found that reducing gasoline sulfur levels to 40 parts per million, the California standard, would bring an air quality benefit equivalent to removing nearly 54 million vehicles from our national fleet. New York City alone would have a benefit equal to removing 3 million vehicles from its streets.

* * * * *

As I mentioned earlier, I am proud of what we accomplished in enacting the Clean Air Act Amendments of 1990. The SO2 Allowance Program established by that legislation has achieved extraordinary benefits at program compliance costs less than half of initial projections. The efficacy of the approach is proven. The current science indicates, however, that we did not go far enough in 1990 in setting our emissions reduction targets. The bills I have introduced, S. 1097 and S. 2377, endeavor to build upon our accomplishments thus far, and to begin the work which remains to be done.