Cite Unfair Process, Weak Technical Basis, and Major Economic Harm

Washington D.C. – Today, the Committee on Science, Space, and Technology held a hearing to review the scientific, procedural, and technical basis for the Environmental Protection Agency’s (EPA) Cross-State Air Pollution Rule (CSAPR).  Witnesses discussed the unclear processes and data EPA used in creating the CSAPR and explored economic, employment, and reliability impacts of implementation. 

“A week ago President Obama gave a speech about jobs and asked Congress to give him $450 billion in new money to spend,” Chairman Ralph Hall (R-TX) said in his opening remarks.  “As we debate the merits of that proposal, I hope the Administration will recognize the single most important thing it can do for the economy doesn’t cost a dime; all it takes is for the President to assert some leadership and get the out-of-control EPA to stop its regulatory assault on American jobs.”

“Issuing a rule forcing major installations of pollution control equipment and expecting States to comply with it five months later is unheard of, even by EPA’s previous track record, and appears to be setting up States to fail,” Hall continued.  “The rule serves as another monument to the activist EPA’s legacy of putting bad politics ahead of good science without regard to economics.”

The CSAPR, which the EPA released earlier this summer, requires Texas and 27 other states’ power generators to make dramatic reductions in emissions beginning January 1, 2012.  On Monday, Texas-based power company, Luminant, announced plans to lay off over 500 employees in preparation to meet the Rule’s unrealistic compliance deadline.  Moreover, the Electric Reliability Council of Texas has found that the rule could result in rotating power outages, and further studies indicate it could contribute to double-digit increases in electricity prices and the loss of countless jobs.

The EPA recently communicated its intention to make technical adjustments that will give thousands of additional tons of pollution allowances to alleviate emission reduction requirements.  In response to a question regarding these adjustments, EPA Assistant Administrator for Air and Radiation Ms. Regina McCarthy assured Members that stakeholders nationwide would receive opportunity for similar treatment, stating “if there are technical adjustments, we are making them.”

Mr. Barry T. Smitherman, Commissioner of the Texas Railroad Commission, summed up the impacts CSAPR will have on Texas, saying that the Rule “was promulgated using a flawed procedural process, will jeopardize the reliability of the Texas electric grid, and will eliminate many high paying jobs nationwide.”

Dr. Bryan W. Shaw, Chairman of the Texas Commission on Environmental Quality, echoed concerns over the EPA process with this rule, saying there is a dangerous precedent being set by EPA because of “its disregard for transparency and full public participation.” Dr. Shaw said that the EPA’s “selective use of data undermin[es] common sense and Federal Clean Air Act obligations.”

Regarding the transparency of the EPA process, Chairman Hall said, “The model assumptions EPA uses are hidden from the public and not subject to peer review.  These black box models allow EPA to pick and choose its input data and assumptions free from technical scrutiny. That is not how science should be done.”  Mr. Gregory Stella, Senior Scientist at Alpine Geophysics, noted the shortcomings associated with the EPA modeling upon which CSAPR was based, citing analysis showing that over 80% of the monitoring sites predicted by EPA to be out of compliance with Clean Air Act requirements in 2012 were in fact already in compliance.  “These results indicate that air quality has improved more rapidly than predicted by EPA’s PTR [Proposed Transport Rule] modeling,” Stella said.

Representing a rural electric cooperative that will be negatively impacted by the Rule, Mr. Wayne E. Penrod, Executive Manager of Environmental Policy at the Sunflower Electric Power Corporation, told Members of the Committee that the compliance schedule is unrealistic.  “EPA has suggested that utilities can comply with the rule by installing new control technology, by relying more on natural gas, by allowance trading, by fuel switching to natural gas and low-sulfur coal, and by purchasing electricity from others,” Penrod said.  “Yet none of these options is truly available given the extremely short compliance schedule.”

Consumer-owned energy generators in Florida will also be impacted by the Cross-state Rule.  “I would like to emphasize that Central Florida is still reeling from the economic downturn,” said Mr. Chip Merriam, Chief Legislative and Regulatory Compliance Officer at the Orlando Utilities Commission (OUC).  “Small businesses have been hit particularly hard by the recession and are still struggling to make ends meet.  Increasing utility rates to pay for the CSAPR regulation could have a devastating effect on OUC customers and the Central Florida economy.”

The following witnesses testified before the Committee:

Panel One

Dr. Bryan W. Shaw, Chairman, Texas Commission on Environmental Quality
Mr. Gregory Stella, Senior Scientist, Alpine Geophysics, LLC
Mr. Barry T. Smitherman, Commissioner, Texas Railroad Commission
Mr. Wayne E. Penrod, Executive Manager, Environmental Policy, Sunflower Electric Power Corporation
Mr. Chip Merriam, Chief Legislative & Regulatory Compliance Officer, Orlando Utilities Commission

Panel Two

The Honorable Gina McCarthy, Assistant Administrator, Office of Air and Radiation, Environmental Protection Agency