CHAIRMAN JAMES INHOFE

OPENING STATEMENT

SUBCOMMITTEE HEARING ON CLEAR SKIES LEGISLATION

APRIL 8, 2003

Thank you Madam Administrator for coming before us to testify on the President’s Clear Skies legislation. I appreciate your presence here today and the signal it sends as to how important this legislation is to the Administration.

I would like to begin by complimenting the Administration for taking the Clean Air Act into the 21^st century. This legislation cuts emissions of sulfur dioxide, nitrogen oxides, and mercury by 70 percent – the biggest reductions ever called for by an American President.

As you know, the Clean Air Act has resulted in tremendous gains in improving the air quality in our nation over the last 30 years. Lead, which was commonplace in gasoline, is virtually gone from our airsheds. The Act has led to improvements in control technologies from the auto industry, power plants, and other industrial sectors. As a result, U.S. man-made emissions have declined dramatically for all six criteria pollutants – by 29 percent since 1970.

The power industry has been a vital part of that success story. Since 1970, emission rates at coal-fired power plants for sulfur dioxide and nitrogen oxides have been cut by more than half.

Unfortunately, each additional ton of emissions reduction that our nation seeks to reduce comes at an increasingly expensive price tag. The current Act is plagued by bureaucratic and sometimes contradictory programs, and every new significant regulation is greeted by endless rounds of litigation that do more for trial lawyers than they do to clean up the air. A prime example of that is the 1997 PM / ozone rule that has still not been implemented because of years of litigation.

Generators face an uncertain future as to what costs will be imposed on them. Without certainty, generators will hesitate to invest the significant capital necessary to build a new base-load coal plant to meet our nation’s growing demand into the future. Two years ago, natural gas prices spiked and the nation witnessed the California energy crisis. Prices spiked again this February, going as high as $19.50. We should not strain natural gas supplies beyond its ability to continue to service residential consumers and industrial users. Preserving our diverse fuel mix also promotes national security. More than half of the nation’s electricity currently comes from coal. Our country has been called the “Saudi Arabia of coal.” As this chart shows, 85 percent of the ultimately recoverable fuel reserves on a Btu basis are coal. That is simply too important a resource to push aside.

One issue I remain concerned about is mercury. When the President announced his Clear Skies Initiative, we were told that the phase 1 cap of 26 tons would be based on the co-benefit of controls installed to meet the sulfur dioxide and nitrogen oxides caps. Now it appears the 26 tons has been redefined as a cost-effective level. My constituents tell me that 26 tons is an unrealistic target and will cause fuel switching from coal to natural gas, which I find very troubling. I believe we should return to basing the mercury level on actual co-benefits.

I am pleased, however, that the bill does not attempt to regulate carbon dioxide, which is not a pollutant under the Clean Air Act. As you know, I am an avid proponent of taking costs into consideration. To the extent that there is any consensus in the climate change debate, it is that even the draconian Kyoto protocol would have no measurable effect on global temperatures. In other words, regulating carbon dioxide would bring no measurable benefit at extreme costs.

The President’s Clear Skies approach is the sensible approach, and will result in the most significant reforms. By putting in place a cap and trade program based on the Acid Rain program – the most successful and efficient program in the Clean Air Act Amendments of 1990 – power plant operators will have the flexibility to choose which plants should have which control technologies so that the system gets the biggest bang for the environmental buck.

I look forward to hearing from you on this aggressive initiative for reducing air emissions.