Statement of Sen. Jim Jeffords, I-Vt.
EPW Subcommittee on Clean Air, Climate Change, and Nuclear Safety
The Impact of the Clean Air Act on Natural Gas Prices Mr. Chairman, the U.S. Environmental Protection Agency was asked to testify at this hearing at the Minority’s request with advanced notice. EPA failed to produce written testimony for this hearing, on a topic as important to the Administration as the price of natural gas. More than 15,000 people work at EPA, and yet the Agency could not produce a few pages of written testimony for us. I am extremely disappointed. Mr. Wehrum, how did this happen? This testimony is critical, as we are supposed to be examining whether the Clean Air Act has had any effect on natural gas prices. I hope we will look carefully at what the evidence shows. I do not believe the Clean Air Act plays a major role in our current high natural gas prices. As many of our witnesses will testify, recent natural gas price spikes are the result of many factors, including weather, imports, market speculation, and the ratio of actual production to proven capacity. While new gas-fired generation has increased, there are many reasons besides environmental considerations that make gas more attractive for new power plants than coal. These reasons are detailed by the Energy Information Administration (EIA) in its testimony, and clean air regulations are but one among many factors cited there. The EIA also points out that between 1990 and 2000, electricity generation from coal grew by a larger amount than electricity generation from natural gas. Moreover, new gas generation typically replaced older, less-efficient gas generation, leading to more electricity being generated from less gas. All of these facts suggest that we should be very careful in suggesting that the Clean Air Act played a significant role in driving the demand for increased natural gas use in the electricity sector. It is also worth noting the human health and environmental benefits of the Clean Air Act greatly outweigh any costs. For example, the Office of Management and Budget has estimated that the benefits of the acid rain provisions of the Clean Air Act outweigh the costs by somewhere between two and 20 times. EPA estimates that this provision has saved more than 18,000 lives per year and had enormous benefits for our forests, lakes and streams. The country still has a long way to go to improve air quality. This Committee’s first and foremost responsibility is to protect public health and the environment. The Clean Air Act does just that. We must be mindful that as beneficial as the use of natural gas to generate electricity, heat our homes, and produce commodities has been to public health by improving our air quality, it has also had real environmental impacts on our country’s public and private lands. We heard compelling testimony in March of 2004 in this Committee that federal environmental laws were not sufficient to protect the property of landowners farming adjacent to natural gas wells. We have now weakened those laws. The new 2005 Energy law exempts natural gas and oil production sites from Clean Water Act stormwater permit requirements. It exempts hydraulic fracturing from the Safe Drinking Water Act. By deregulating natural gas through these provisions of the new Energy law, we have provided another incentive to use natural gas as opposed to other energy sources. Thank you, Mr. Chairman, for holding this hearing. I look forward to hearing from the witnesses.
EPW Subcommittee on Clean Air, Climate Change, and Nuclear Safety
The Impact of the Clean Air Act on Natural Gas Prices Mr. Chairman, the U.S. Environmental Protection Agency was asked to testify at this hearing at the Minority’s request with advanced notice. EPA failed to produce written testimony for this hearing, on a topic as important to the Administration as the price of natural gas. More than 15,000 people work at EPA, and yet the Agency could not produce a few pages of written testimony for us. I am extremely disappointed. Mr. Wehrum, how did this happen? This testimony is critical, as we are supposed to be examining whether the Clean Air Act has had any effect on natural gas prices. I hope we will look carefully at what the evidence shows. I do not believe the Clean Air Act plays a major role in our current high natural gas prices. As many of our witnesses will testify, recent natural gas price spikes are the result of many factors, including weather, imports, market speculation, and the ratio of actual production to proven capacity. While new gas-fired generation has increased, there are many reasons besides environmental considerations that make gas more attractive for new power plants than coal. These reasons are detailed by the Energy Information Administration (EIA) in its testimony, and clean air regulations are but one among many factors cited there. The EIA also points out that between 1990 and 2000, electricity generation from coal grew by a larger amount than electricity generation from natural gas. Moreover, new gas generation typically replaced older, less-efficient gas generation, leading to more electricity being generated from less gas. All of these facts suggest that we should be very careful in suggesting that the Clean Air Act played a significant role in driving the demand for increased natural gas use in the electricity sector. It is also worth noting the human health and environmental benefits of the Clean Air Act greatly outweigh any costs. For example, the Office of Management and Budget has estimated that the benefits of the acid rain provisions of the Clean Air Act outweigh the costs by somewhere between two and 20 times. EPA estimates that this provision has saved more than 18,000 lives per year and had enormous benefits for our forests, lakes and streams. The country still has a long way to go to improve air quality. This Committee’s first and foremost responsibility is to protect public health and the environment. The Clean Air Act does just that. We must be mindful that as beneficial as the use of natural gas to generate electricity, heat our homes, and produce commodities has been to public health by improving our air quality, it has also had real environmental impacts on our country’s public and private lands. We heard compelling testimony in March of 2004 in this Committee that federal environmental laws were not sufficient to protect the property of landowners farming adjacent to natural gas wells. We have now weakened those laws. The new 2005 Energy law exempts natural gas and oil production sites from Clean Water Act stormwater permit requirements. It exempts hydraulic fracturing from the Safe Drinking Water Act. By deregulating natural gas through these provisions of the new Energy law, we have provided another incentive to use natural gas as opposed to other energy sources. Thank you, Mr. Chairman, for holding this hearing. I look forward to hearing from the witnesses.
