Senator Bob Smith
Ranking Member, Environment & Public Works Committee
Full Committee Legislative Hearing on S. 556,
Good Morning & thank you Mr. Chairman for holding this hearing. I also want thank all of the witnesses -- and a special welcome to Ken Colburn, who has come down from New Hampshire. Ken does a great job for the people in the State, and he has been extremely helpful to me and my staff.
o I have long been a proponent of reducing our utility emissions
o Unfortunately, Current law often fosters a combative relationship that does too little to increase environmental protection and too much to increase litigation, delay, and uncertainty.†
o In many ways, the law can actually be an obstacle to cleaner air.
The bottom line is that we have a system that discourages new energy production:† increases the cost for current production:†† and delays environmental protection. This is unacceptable.
o I want to change that† -- and began an inclusive process when I first became Chairman two years ago
o I want to applaud Chairman Jeffords for continuing that process
o It is vital that we reduce our emissions and, at the same time, separate ourselves from the current command and control system to one that is more effective and efficient
o We need to embrace the free-market mechanisms that rely on innovation†††††††††††††††††††††††††††††††††††††††
It is my belief that innovation and technology will one day make regulation a thing of the past. We already have a successful model to follow - that of the Acid Rain program. Clearly, we need further reductions in the sulfur emissions level, but no other environmental program compares with the efficiency and effectiveness of the Acid Rain Program.
We have seen compliance under this program exceed 99%; thatís unheard of for any environmental program.† Many of the reductions were realized ahead of schedule as well. Second, although there was concern that the Acid Rain cap & trade program would create so - called Ahot spots@† - EPA data has shown that this is not occurring.
This chart shows the monitored reductions in SO2 deposition due to the Acid Rain Program.† The map on the left shows deposition for 1989-1991, and the map on the right shows deposition for 1997-1999 B the few years after Phase I of the Program went into effect.†
The significant reduction in red and yellow areas on the map indicates that the most adversely affected areas have seen the greatest environmental benefit from the Acid Rain Program.†
The existing hot spots have been cooled B new ones have not been created by trading.
And finally, one last success of the Acid Rain Program has been the steady decline in estimates of annual compliance costs.†
This next chart shows that actual annual costs are less than half the lowest cost estimate at the time of enactment.†
Other estimates at the time of enactment were up to 7 times higher than actual costs.†
A program that is market-based, flexible and incentive driven has proven to be the most effective and efficient environmental program on the books. †We need to embrace that approach.† I want innovation to replace regulation B and I believe that can happen
I want to thank the Chairman for his efforts . I believe that there is more work to be done. I donít believe that his bill S. 556 is complete and ready for mark-up yet.† Discussions with Members simply have not yet gotten to the point where we are ready for a vote on the bill.† †We have a great deal more work to do to establish broad support for specific legislation on this issue. †One thing is clear - absent a broad consensus, there will be no progress.
I appreciate his efforts and pledge my continued constructive participation in this very important process. It is my hope that this will be the first in a long line of legislative hearings where Members are able to discuss options. I donít think that we are far away from reaching that point of consensus. We only have one good shot at this, so lets not rush it, lets get it right.
If we do this right; with flexibility, market based emissions trading and clear emissions limits, we will create a system that not only reduces air pollution, but costs less, while enhancing fuel diversity. Both EIA and EPA have completed analysis of multipollutant reduction scenarios Senator Voinovich and I requested. BOTH indicate that we can make dramatic reductions for an annual cost that is below the original cost estimates by EEI for the Acid Rain Program.
Significant reductions in NOx, SO2, Mercury (EPA=s analysis also includes CO2) for less than the expected cost for partial reductions in just SO2. Whatís more, coal consumption in the east increased in this analysis. This makes me quite optimistic that we can improve on the current system.