Click here to watch Ranking Member Capito’s opening remarks from the committee hearing.
WASHINGTON, D.C. – Today, the Senate Environment and Public Works (EPW) Committee held a hearing on the Environmental Protection Agency’s (EPA) “Headwind rule” that targets American power production and burdens states with misguided air regulations.
Below is the opening statement of Ranking Member Shelley Moore Capito (R-W.Va.) as delivered.
“Thank you, Mr. Chairman.
“Thank all of you for being here today. And common sense sounds like something we definitely agree on even though I didn't know your dad, I can agree on that. So we look forward to the testimony today.
“The EPA’s so-called ‘Good Neighbor’ Rule is the latest version of a regulation that has gone by many names. I’ve been on this committee for eight years and I’ve seen it in different names.
“It has previously been called the Cross-State Air Pollution Rule – or CSAPR, the ozone transport rule, and the NOx Federal Implementation Plan.
“But they all refer to the same rule and this is a topic that we’ve discussed.
“While being a ‘good neighbor’ is great, and we all want to be good neighbors, the name is a bit of a misnomer.
“It’s a $14 billion cost rule targeting the states that are energy suppliers in our nation and our industrial heartland.
“So what does that $14 billion in costs get us? Unfortunately, the rule will not change any nonattainment areas to attainment in the downwind states.
“Instead, it places a burden on states that will help provide our nation with power, manufactured goods, and building materials, as though we’re in different economies.
“As we try to make ourselves competitive against rivals like China, bring back and reinforce our supply chains, and make generational investments in our infrastructure, which we are doing now, having our states that provide electricity and manufactured goods to their neighbors is not just the most sustainable solution.
“We have to compete as one nation.
“Requirements for the use of American iron, steel, and other materials in the bipartisan infrastructure package are directly undercut by this new iteration of the cross-state air pollution rules that, for the first time, target those domestic industries and their significantly unionized workforces. And I’d like to ask unanimous consent to put a letter from the United Steel Workers expressing great concern about this rule.
“As we have heard from those sectors broader concerns about the retirement of baseload electric generation that may reduce the reliability and [raise the] cost of energy for plants that were built because of those assets.
“So perhaps this regulation might be more aptly named the ‘Headwind Rule’ because that is what it will be for American workers and consumers.
“With that table setting out of the way, let’s talk about what states the final Headwind Rule will impact.
“It targets 23 states for ‘interstate transport’ of air pollution.
“While that is down from 26 states in the original proposal, there are still two states, Tennessee and Wyoming, in regulatory limbo because the EPA has ‘deferred’ action on these.
“The only state that was dropped from this was Delaware. Now, with all due respect to the Chairman, that’s an interesting omission. You and somebody else you know well are from Delaware, right?
“As I mentioned earlier, this rule is going after power plants and industries, including iron, steel, cement, concrete, pulp and paper, and natural gas pipelines, for the very first time.
“So it’s a much broader rule, impacting more states, which is going to put us in uncharted waters I believe to implementation.
“And the process EPA undertook to develop this rule, and the way in which the Agency went about denying state implementation plans, cuts against congressional intent in the Clean Air Act’s cooperative federalism approach.
“For instance, West Virginia’s pending State Implementation Plan, or SIP, was denied, along with 18 other states in January.
“This was a legal step that EPA took so they could federalize the issue and require a one-size-fits-all, or FIP, which is a ‘Federal Implementation Plan.’
“With witnesses representing three different states, I look forward to hearing from them on how the SIP development process typically works and who knows the intricacies of their states better than the hardworking folks that we have with us today?
“I am very glad to see Arizona here because I know they have unique state, they have a unique case.
“Being downwind from California, as well as having international transport of pollutants from China and Mexico that affect its attainment of various air regulations, and facing potential incorporation into this rule, I look forward to hearing Ms. Peters’ views on what this may mean for her state.
“It would be a shame if the only hypothetical benefits for Arizona are as a result of shuttering or reducing shifts for manufacturing sites in California, because that seems to be the most likely outcome.
“And it will leave Arizona if it doesn’t happen to be sanctioned under tightened National Ambient Air Quality Standards for ozone and particulate matter that the EPA is working on.
“I am not sure even the EPA knows what the ramifications of this will be for these states or the impacted sectors.
“My office has heard repeatedly from the industries being regulated for the very first time under this rule under the Office of Air that the EPA did not understand the businesses and technologies that they were attempting to regulate.
“That does explain the significant changes in covered facilities and components between the proposal and the final rule, which we’re glad about that.
“But even with those changes, there will be hidden costs for Americans in the form of higher prices, delayed or unbuilt infrastructure, and potentially lost jobs that could result in litigation.
“I truly hope that the EPA knows that when they take action that is likely to shut down our nation’s industries, it does not mean the need for those products will disappear.
“Instead, it merely moves the need for these abroad to countries with lower environmental standards, the opposite of what both parties are trying to accomplish in terms of ‘re-shoring’ our manufacturing base.
“This rule is just one small piece of the administration’s plan to target affordable, reliable baseload power generation.
“As we know from a presentation in February of 202[1], the EPA has been developing a number of new regulations drafted to disproportionately affect coal and natural gas power plants.
“The Wall Street Journal Editorial Board wrote about how these policies, like the ozone transport rule that we are talking about today, are driving power plant retirements and how those plants are shutting down without adequate replacement capacity for the grid.
“As the Wall Street Journal observed, ‘the steep costs of complying with the EPA regulations, including a proposed ‘good neighbor rule’ that is expected to be finalized next month, will force about 10,500 megawatts of fossil-fuel generation to shut down.’
“And now that this rule has been finalized, it is actually projected to shutter 14,000 megawatts.
“In comments to the so-called Good Neighbor’ proposal, MISO, the Midcontinent Independent System Operator, stated that the proposal ‘creates significant concerns about MISO’s ability to maintain electric reliability.’
“PJM, which covers my state and several others represented, is also ringing the alarm about the effects that retirements will have, and explains that most upcoming power plant retirements are ‘policy-driven.’
“The cooperative federalism model under the Clean Air Act has resulted in significant reduction in air pollution over these five decades.
“More can be achieved in the years to come through coordination between the states and the federal government, something I expect to hear from our state witnesses today.
“But imposing a federal plan on half the states does nothing to support that spirit of collaboration and will only, I think, harm our national economy.
“Thank you for holding this hearing, Chairman Carper, and I look forward to the witnesses."
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