Matt Dempsey (202) 224-9797

David Lungren (202) 224-5642

Opening Statement of Senator James M. Inhofe

Ranking Member, Senate Committee on Environment and Public Works

Subcommittee on Clean Air and Nuclear Safety hearing entitled, "Oversight: EPA's Proposal for Federal Implementation Plans to Reduce Interstate Transport of Fine Particulate Matter and Ozone."

Thursday, July 22, 2010 9:15 a.m.

Chairman Carper, thank you for holding this hearing today to discuss EPA's new Transport Rule. 

Let me say at the outset that, when it comes to reducing real air pollution from power plants, the best way to accelerate environmental progress and institute certainty for businesses is through 3-P legislation.  I'm pleased that our staffs are working across the aisle to find common ground that could lead to passage of 3-P legislation this year.  Even if we fall short of reaching agreement, we are laying the groundwork for bipartisan legislation in the next Congress. 

This is not something new for me.  I supported 3-P legislation when, as chairman of EPW, I tried to advance the Clear Skies bill.  Because that effort eventually failed, for reasons I won't get into now, we received regulations under the Clean Air Act that the DC Circuit ultimately rejected-something Sen. Voinovich and I predicted would happen.  Here's what I said when the Bush Administration's Clean Air Interstate Rule was promulgated: "This Clean Air Interstate Rule is significantly more vulnerable to court challenges than legislation and will undoubtedly be held up.  Trying to litigate the way to cleaner air only delays progress, often yields little or no result and wastes millions in taxpayer dollars."

So here we sit, debating EPA's replacement regulations that, though admirable in their intent, are onerous and complex and vulnerable to the same lawsuits that stymied previous attempts to reduce emissions of sulfur dioxide and nitrogen oxides. 

Like the Bush Administration's Clean Air Interstate Rule, EPA's Transport Rule addresses the transport of fine particulate matter (PM) and ozone across state lines. This rule is, to put it mildly, not a model of simplicity.  For example, as the Clean Air Task Force has noted, under the rule, "EPA will issue 4 discrete types of new emission allowances for 4 different cap-and-trade programs corresponding to the 4 different control regimes." 

Utilities will also face moving and uncertain emissions targets as EPA further tightens National Ambient Air Quality Standards (NAAQS) for ozone and PM over the next few years.  In my state of Oklahoma, this issue of uncertainty over the pending NAAQS revisions and future transport rules is causing substantial concern, and I look forward to addressing this issue with questions to Assistant Administrator McCarthy.

Also, to address legal problems identified by the Court, EPA greatly restricted the ability of utilities to trade emission rights.   I am afraid that these trading restrictions and the resulting devaluing of previously banked allowances from the Acid Rain Program have created a lack of confidence in emissions trading markets. 

Now, on the question of trading, I want to quickly address the argument that trading for SO2 and NOx is the same as trading for CO2.  This is simply false.  When the 1990 Clean Air Act amendments were passed, we had commercially available technology, as well as low-sulfur coal, to meet emissions reduction requirements.  As two EPA attorneys have noted, with Acid Rain, "Little new technology or infrastructure was needed and little was created."

With CO2, we don't have emissions-specific technology; compliance would come, in many cases, from shutting down coal.  That's why passing restrictions on CO2 will mean, among other things, higher electricity prices, especially in the Midwest and South, serious reliability problems, and fewer jobs. 

So let's avoid the temptation to re-introduce CO2 into this debate.  We can pass a straightforward 3-P bill that sets clear targets and timetables and avoids the endless raft of litigation that enriches lawyers at the expense of attaining certain public health and environmental benefits.  We could surprise many in this city who don't think passing bipartisan legislation of this kind is possible.   And I stand ready to make it happen.  Thank you.