[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
AUTHORIZING SUPPLEMENTAL ENVIRONMENTAL PROJECTS TO INCENT REDUCTIONS OF
DIESEL EMISSIONS
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON ENERGY AND AIR QUALITY
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
SECOND SESSION
ON
H.R. 3754
__________
FEBRUARY 13, 2008
__________
Serial No. 110-89
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
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COMMITTEE ON ENERGY AND COMMERCE
JOHN D. DINGELL, Michigan, Chairman
HENRY A. WAXMAN, California JOE BARTON, Texas
EDWARD J. MARKEY, Massachusett Ranking Member
RICK BOUCHER, Virginia RALPH M. HALL, Texas
EDOLPHUS TOWNS, New York FRED UPTON, Michigan
FRANK PALLONE, Jr., New Jersey CLIFF STEARNS, Florida
BART GORDON, Tennessee NATHAN DEAL, Georgia
BOBBY L. RUSH, Illinois ED WHITFIELD, Kentucky
ANNA G. ESHOO, California BARBARA CUBIN, Wyoming
BART STUPAK, Michigan JOHN SHIMKUS, Illinois
ELIOT L. ENGEL, New York HEATHER WILSON, New Mexico
ALBERT R. WYNN, Maryland JOHN B. SHADEGG, Arizona
GENE GREEN, Texas CHARLES W. ``CHIP'' PICKERING,
DIANA DeGETTE, Colorado Mississippi
Vice Chairman ROY BLUNT, Missouri
LOIS CAPPS, California VITO FOSSELLA, New York
MIKE DOYLE, Pennsylvania STEVE BUYER, Indiana
JANE HARMAN, California GEORGE RADANOVICH, California
TOM ALLEN, Maine JOSEPH R. PITTS, Pennsylvania
JAN SCHAKOWSKY, Illinois MARY BONO MACK, California
HILDA L. SOLIS, California GREG WALDEN, Oregon
CHARLES A. GONZALEZ, Texas LEE TERRY, Nebraska
JAY INSLEE, Washington MIKE FERGUSON, New Jersey
TAMMY BALDWIN, Wisconsin MIKE ROGERS, Michigan
MIKE ROSS, Arkansas SUE WILKINS MYRICK, North Carolina
DARLENE HOOLEY, Oregon JOHN SULLIVAN, Oklahoma
ANTHONY D. WEINER, New York TIM MURPHY, Pennsylvania
JIM MATHESON, Utah MICHAEL C. BURGESS, Texas
G.K. BUTTERFIELD, North Carolina MARSHA BLACKBURN, Tennessee
CHARLIE MELANCON, Louisiana
JOHN BARROW, Georgia
BARON P. HILL, Indiana
______
Professional Staff
Dennis B. Fitzgibbons, Chief of Staff
Gregg A. Rothschild, Chief Counsel
Sharon E. Davis, Chief Clerk
David L. Cavicke, Minority Staff Director
(ii)
Subcommittee on Energy and Air Quality
RICK BOUCHER, Virginia, Chairman
G.K. BUTTERFIELD, North Carolina, FRED UPTON, Michigan
Vice Chairman Ranking Member
CHARLIE MELANCON, Louisiana RALPH M. HALL, Texas
JOHN BARROW, Georgia ED WHITFIELD, Kentucky
HENRY A. WAXMAN, California JOHN SHIMKUS, Illinois
EDWARD J. MARKEY, Massachusetts JOHN B. SHADEGG, Arizona
ALBERT R. WYNN, Maryland CHARLES W. ``CHIP'' PICKERING,
MIKE DOYLE, Pennsylvania Mississippi
JANE HARMAN, California ROY BLUNT, Missouri
TOM ALLEN, Maine STEVE BUYER, Indiana
CHARLES A. GONZALEZ, Texas MARY BONO MACK, California
JAY INSLEE, Washington GREG WALDEN, Oregon
TAMMY BALDWIN, Wisconsin MIKE ROGERS, Michigan
MIKE ROSS, Arkansas SUE WILKINS MYRICK, North Carolina
DARLENE HOOLEY, Oregon JOHN SULLIVAN, Oklahoma
ANTHONY D. WEINER, New York MICHAEL C. BURGESS, Texas
JIM MATHESON, Utah JOE BARTON, Texas (ex officio)
JOHN D. DINGELL, Michigan (ex
officio)
C O N T E N T S
----------
Page
H.R. 3754, to authorize the Administrator of the Environmental
Protection Agency to accept, as part of a settlement, diesel
emission reduction Supplemental Environmental Projects, and for
other purposes................................................. 4
Hon. Rick Boucher, a Representative in Congress from the
Commonwealth of Virginia, opening statement.................... 1
Fred Upton, a Representative in Congress from the State of
Michigan, opening statement.................................... 8
Witnesses
Hon. Jim Costa, a Representative in Congress from the State of
California..................................................... 6
Prepared statement........................................... 8
Tim Regan, senior vice president, Corning Incorporated,
Washington, DC................................................. 11
Prepared statement........................................... 13
Conrad Schneider, advocacy director, Clean Air Task Force,
Brunswick, ME.................................................. 30
Prepared statement........................................... 32
H.R. 3754: AUTHORIZING SUPPLEMENTAL ENVIRONMENTAL PROJECTS TO INCENT
REDUCTIONS OF DIESEL EMISSIONS
----------
WEDNESDAY, FEBRUARY 13, 2008
House of Representatives,
Subcommittee on Energy and Air Quality,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 1:27 p.m., in
room 2322 of the Rayburn House Office Building, Hon. Rick
Boucher (chairman) presiding.
Members present: Representatives Barrow, Matheson, Upton
and Shimkus.
Staff present: Lorie Schmidt, Laura Vaught, Chris Treanor,
Rachel Bleshman, Alex Haurek, Erin Bzymek, David McCarthy, Tom
Hassenboehler, and Garrett Golding.
OPENING STATEMENT OF HON. RICK BOUCHER, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF VIRGINIA
Mr. Boucher. The subcommittee will come to order.
I want to begin this afternoon by welcoming to our
subcommittee the gentleman from Michigan, Mr. Upton, who is the
new ranking member of our subcommittee. It has been a privilege
to work with him over the years on a whole range of matters,
telecommunications, energy issues, other things, and I am
delighted that he is now going to be ranking member of this
subcommittee for the balance of this Congress, and I just want
to welcome him here today.
Today the subcommittee will examine H.R. 3754, legislation
introduced by our colleague, Jim Costa from California, which
would allow the continued use of Supplemental Environmental
Project funds for diesel retrofit projects. Identical
legislation has been introduced by Senator Carper. That
legislation last week was unanimously approved by the Senate
Committee on the Environment and Public Works.
Following this afternoon's hearing, the legislation will be
considered for markup in this subcommittee and I will announce
at this time that pursuant to a unanimous-consent request which
will be made shortly, we will be proceeding directly to markup
of this bill as soon as our hearing is concluded, and so
Members who had planned to come here at some other time, 2:30,
perhaps, should make their way to the subcommittee if they
desire to take part in the markup process.
Diesel emissions from on- and off-road vehicles and engines
account for more than one-half of the nitrogen oxide and
particulate matter emissions from mobile sources across our
country. The Environmental Protection Agency has issued
regulations to limit emissions from new diesel engines and
vehicles, but the rules only apply to the new vehicles and not
to the heavy-duty diesel fleet that is currently on America's
highways. Given the long life of many diesel vehicles and
engines, it is estimated that the existing fleet of vehicles
will not be entirely cycled out of operation until about the
year 2030.
In order to achieve emission reductions from the existing
diesel fleet, a number of actions have been taken to encourage
the retrofit of these vehicles with emission reduction
technologies. For example, the EPA has administered the Clean
School Bus Program for a number of years, providing grants to
school districts for the purpose of retrofitting diesel-powered
school buses. As another example, as part of SAFETEA-LU, the
Highway Transportation Reauthorization, Congress provided
funding for diesel retrofits under the Congestion Mitigation
and Air Quality Program. Under the Diesel Emissions Reduction
Act, which was enacted as a part of the Energy Policy Act of
2005, the expenditure of $200 million annually over a 5-year
period for grants and loans funding diesel retrofit projects
was authorized. And most recently, in December, the Congress
passed, and the President signed into law, an appropriation of
$49.2 million for fiscal year 2008 in that year's
appropriations legislation.
In addition to these initiatives administered by the EPA,
private entities have also often funded clean diesel programs
as part of settlement agreements reached with the EPA in cases
in which the Agency had alleged that the private entity had
violated the Clean Air Act. These Supplemental Environmental
Projects devoted to diesel emission reductions have totaled
approximately $45.4 million from fiscal year 2001 through
fiscal year 2006. Unfortunately, as a result of the funding
which was appropriated for the diesel emissions reduction
program, the EPA has concluded that as a matter of law, it is
required to cease allowing Supplemental Environmental Projects
for diesel retrofits as a part of settlement cases for
violations of the Clean Air Act. That decision was made based
on the conclusion by EPA that continuation of the Supplemental
Environmental Projects for diesel retrofits violates the
Miscellaneous Receipts Act, which prohibits the augmentation of
Agency budgets that are appropriated by the Congress from other
means. Given the estimated 10 million heavy-duty diesel
vehicles and engines in use today, there is an extraordinary
need to continue to fund diesel retrofit programs. The
reduction of diesel emissions through retrofit technologies is
cost-effective, and it clearly will produce a needed
environmental benefit.
The legislation Mr. Costa has brought to us, H.R. 3754,
would ensure that all available means of funding for these
valuable programs are allowed to continue. It would grant EPA
specific authority to accept diesel emission reduction
Supplemental Environment Projects as part of the settlement of
alleged violations of environmental laws, provided that these
projects protect human health and the environment, are related
to the underlying violation and do not constitute activities
that the defendant otherwise would be required legally to
perform, and do not provide funds for the staff of the Agency
or contractors to carry out EPA's internal operations.
I would note that this legislation has the support of more
than 40 groups consisting of a broad range of health,
environment, industry and non-governmental organizations. It
reflects a commonsense approach to ensuring that we utilize all
available and appropriate means to reduce diesel emissions, and
I very much look forward to hearing from today's witnesses
regarding this consensus measure.
The bill before us, as I indicated, was authored by our
colleague, Jim Costa from California, and I want to thank him
for bringing this matter before the subcommittee. In just a
moment we will welcome his comments. Following Mr. Costa's
testimony and that of our second panel of witnesses, I will
announce again that the subcommittee will proceed directly to
markup on this measure.
At this time I will include in the record a copy of the
bill, H.R. 3754.
[The bill follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Boucher. Jim, we are pleased to have you with us this
afternoon, and we thank you for bringing this matter before us.
We will be happy to hear your comments.
STATEMENT OF HON. JIM COSTA, A REPRESENTATIVE IN CONGRESS FROM
THE STATE OF CALIFORNIA
Mr. Costa. Thank you very much, Mr. Chairman, for allowing
me to testify before the subcommittee on H.R. 3754.
This bill is an important measure, not just for my district
but I think it has national implications as it relates to air
quality issues throughout the country, and with the
subcommittee's efforts this afternoon, I think we will continue
to provide greater opportunities to clean our air throughout
the country. My cosponsors of this measure, Representatives
Cardoza, McNerney, Nunes, Matsui, Kind, Bono Mack, Shimkus,
Butterfield, Matheson and Hill, are also to be thanked for
their support for this important measure.
This measure would allow the Environmental Protection
Agency, if it becomes law, to continue its prior practice of
accepting diesel emission reduction projects as part of the
environmental enforcement settlement agreements, as the
chairman outlined in his opening statement.
For many years the Environmental Protection Agency has
funded diesel retrofit projects through Supplemental
Environmental Projects, otherwise known as SEPs, with
corporations as part of overall settlement agreements. From the
fiscal year 2001 to the fiscal year 2006, the Environmental
Protection Agency entered in diesel emission reduction SEPs
that were valued at over $45 million. This bill would maintain
that separate private source of funding for these projects and
would continue these private-public partnerships to improve air
quality throughout the country. This is particularly important
to my district, which suffers from some of the worst air
quality issues in the country as a nonattainment area.
The map there that you have, of course you are familiar
with California. I know the chairman has been in the valley in
the past. This is the area we are talking about. It is over 250
miles in length and 60 to 80 miles in width, and it is ringed
by the Sierra Mountain range, the wonderful mountains of the
Sierras that go up to 14,000 feet, and the Coast Range
Mountains go to 4,000 to 6,000 feet, and the air quality
therefore that comes in from the Bay area across the Pacheco
Pass and the emissions, both stationary and mobile sources of
emissions that we create, creates a very difficult problem, as
we continue to grow in managing our mobile and stationary
sources of emission.
With me today, I have a group of folks who are very
familiar with all of that area. They are a group of both
elected and private citizens that are involved in commerce on
the valley's one voice who come to Washington every year to
advocate on behalf of the valley on a host of issues. I would
like them all to stand briefly. I don't go anywhere without my
group.
Mr. Upton. You are just lucky we didn't impose the line-
sitter fee today.
Mr. Costa. But we are happy that they are here this week
working with their valley representatives, and I thought that
since all of them are involved in this issue in one fashion or
another, they would like to listen and be a part of the hearing
today.
Anyway, as a result of the challenges that we face in the
valley, coupled with the fact that two major transportation
corridors cut through the valley, both Interstate 5 as well as
Highway 99, that not only provide important corridors for the
valley but commerce for the entire Nation as well, both north
and south, contributes to a large portion of our pollution
issues. Over 60 percent of our emissions are mobile sources of
emissions. Less than 40 percent are stationary. The reason this
is important is because State and local government have control
to regulate and to provide solutions to the stationary sources
of emissions, and I think we have done an effective job through
an air pollution control authority that I helped create when I
was in the State legislature back in the late 1980's.
However, over 60 percent of the emissions come from mobile
sources and that is the jurisdiction of the Federal Government
and therefore this legislation becomes more important, not just
to the rest of the country but to the valley as well that
suffers from PM emissions, as well as smog, that provide health
hazards for heart disease, lung cancer and asthma. The problem
is considerable throughout the State, but particularly in the
valley as a nonattainment area. We experience 35 to 40 days in
which we exceed the Federal health standards for ground-level
ozone and more than 100 days that we exceed the levels for
State ozone standards.
Today more than 90 percent of the commercial trucks are
powered, as the chairman noted, by diesel engines. Two-third of
all the farms and construction equipment run from diesel
engines, and this valley that I outlined to you earlier is
among the richest agricultural regions in the entire country
and therefore the world. We produce half the Nation's fruits
and vegetables, and we lead in a host of other specialty crops
as well. So therefore when you look at the combination of the
challenges, this legislation becomes more important. California
has done a lot. We lead the Nation in clean diesel technology
and diesel retrofit projects that can make important
contributions to improve air quality, not only in California
but throughout the country. In addition to retrofitting clean
diesel technologies for diesel vehicles and equipment, we think
this is one of the more cost-effective strategies for teaching
tangible and immediate results when we look at our long-term
strategies to cleaning up the air in this nonattainment area.
The Environmental Protection Agency estimates that these
retrofit projects have a 13 to 1 benefit-to-cost ratio. Let me
repeat that. This project, these projects like this have a 13
to 1 benefit-to-cost ratio, meaning that the $45 million
invested during that 5-year period from fiscal year 2001 to
2006 translated into almost $600 million in health benefits.
That results obviously in fewer asthma cases, fewer
cardiovascular cases and other health-related issues that we
have to deal with.
So in closing, Mr. Chairman, I want to thank you and the
subcommittee members for inviting me to testify today. This
bill is not just cost-effective in allowing us to try to
provide meaningful air quality improvements in the valley but
in the Nation as well, and for all of those reasons I ask the
subcommittee to support this effort.
[The prepared statement of Mr. Costa follows:]
Prepared Statement of Hon. Jim Costa, a Representative in Congress from
the State of California
First, I want to thank Chairman Boucher for inviting me to
testify today. This is an important issue for my district, and
for improving air quality throughout the country, and I
appreciate the opportunity to discuss this bill.
H.R. 3754 will allow the Environmental Protection Agency
(EPA) to continue its prior practice of accepting diesel
emission reduction projects as part of environmental
enforcement settlement agreements.
For many years, the EPA has funded diesel retrofit projects
through Supplemental Environmental Projects (SEP's) with
corporations as part of settlement agreements. From fiscal year
2001 to fiscal year 2006, EPA entered into diesel emission
reduction SEP's valued at $45.5 million. This bill will help
maintain this separate, private source of funding for these
projects.
In recent years, there has been a new era in clean diesel
technology, which includes three critical parts. First, a
cleaner burning, lower sulfur diesel; second, lower-emitting
diesel engines; and third, new emissions control technology.
Retrofitting clean diesel technologies for diesel vehicles
and equipment is one of the most cost-effective strategies for
achieving tangible and immediate air quality benefits. Areas of
the country struggling to meet clean air standards can greatly
benefit from diesel retrofits to help improve air quality.
Retrofits can be done on older vehicles or equipment. The
EPA estimates these retrofit projects have a 13-to-1 benefit-
to-cost ratio, meaning that the $45.5 million invested from
fiscal year 2001 to 2006 translates into almost $600 million in
health benefits--from fewer asthma cases to fewer
cardiopulmonary deaths.
Right now, more than 90 percent of commercial trucks are
powered by diesel engines, and two-thirds of all farm and
construction equipment run from diesel engines.
Diesel retrofitting for these engines can make a
significant contribution to improving air quality--in
particular, by reducing particulate matter emissions, which are
linked to health hazards such as heart disease and lung cancer.
In closing, I want thank you, Chairman Boucher, and the
members of the subcommittee, for inviting me to testify. This
bill will allow cost-effective, meaningful air quality
improvement to continue, and I hope that the subcommittee will
give its support.
----------
Mr. Boucher. Thank you very much, Mr. Costa. It is a
pleasure to have you with us today, and you are quite right, I
have on a number of occasions visited your part of California.
It is indeed a gorgeous place, and I am impressed with the
number of your constituents who have journeyed here to show
their support for this measure. The only time I get that many
of my constituents coming here is when they are angry about
something. You are to be congratulated for having them here for
a positive purpose.
Mr. Costa. I promised them I would take them out this
evening.
Mr. Boucher. And they are to be congratulated for being
here to show support for your efforts.
I want to recognize Mr. Upton. I intended to recognize him
for a statement earlier and neglected to do that, so at this
time let me call on him for whatever statement he decides to
make.
OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN
Mr. Upton. I thank the chairman, and I appreciate Mr.
Costa's work on this issue and the way that he has really begun
on this from a bipartisan way from the get-go, and I know Mr.
Shimkus and others are cosponsors and certainly I want to be
part of the process to make sure that we have smooth sailing
today and I suggested to my chairman that we move right away to
the markup. We have had lots of extra votes today and we don't
need to have this put off because of action on the House floor,
so I would like to see this happen very quickly.
This is an issue that we can all rally around, reducing
diesel emissions in an immediate cost-effective manner that
eliminates the need for new infrastructure requirements. This
legislation will address EPA's legal interpretation that SEP
money may not be used for diesel retrofits. Today we will take
a legislative step forward to authorize the EPA to use these
funds under the Diesel Emissions Reduction Act for reducing
diesel emissions through retrofits. This is an issue that is
supported by a broad coalition of environmental, science-based,
public health, industry, State and local government groups.
One of the groups that is in fact going to testify on the
second panel is Corning, and at the invitation of our former
colleague, Amo Houghton, I visited Corning's headquarters in
Corning, NY, back in 2006. I was particularly impressed by the
commitment that Corning has made toward advancing environmental
technology. The company invests over 10 percent of its revenue
in R&D. I visited the research lab that day to see the fruits
of their investments. The advances being made to reduce
pollution from diesel engines in fact are very significant and
it is yet another example of how we can effectively address our
environmental problems through technology. I know that they are
in support of this legislation.
I look forward to being part of the positive process of
moving this legislation forward, and at this point I will yield
back my time to my chairman. Thank you.
Mr. Boucher. Thank you, Mr. Upton.
Let me ask other members if they care to make opening
statements. The gentleman from Georgia, Mr. Barrow.
Mr. Barrow. No, I will waive my opening statement, Mr.
Chairman.
Mr. Boucher. That is fine.
The gentleman from Illinois, Mr. Shimkus.
Mr. Shimkus. Thank you, Mr. Chairman. I would just like to
thank Jim for bringing the legislation, and I am proud to be a
cosponsor.
We are moving into an era where diesel is not a dirty word
anymore. We all remember, especially in communities, diesel
buses and the big fumes but with new technology, research and
development, clean diesel, the fact that diesel is a primary
fuel for automobiles in Europe is bringing a new venue, and we
focus in this committee on energy security. Diesel is going to
have a big role in that, and the fact that we can also tie this
to this Supplemental Environmental Projects, it is a win-win
all around, and I am just pleased to be a cosponsor.
Thank you for your work, and I yield back my time.
Mr. Boucher. Thank you, Mr. Shimkus.
The gentleman from Utah, Mr. Matheson.
Mr. Matheson. I waive.
Mr. Boucher. Thank you, Mr. Matheson.
Mr. Costa, I just have one question of you. I note that the
legislation requires that for a project to be accepted under
its terms, the project itself must be related to the underlying
violation, and I am wondering if you can give us a sense of how
that will apply, and I realize that was also a part of Senator
Carper's legislation in the Senate, but do you have any
examples for us of what would be in bounds and out of bounds,
given that requirement?
Mr. Costa. The committee has noted that in fact we need to
ensure that we are flexible and it is my intent to ensure that
we bring that about so as it relates to this legislation, I
want to make sure that the conditions in which the EPA is
working with private parties on settlement agreements that the
enabling legislation will allow for that flexibility under
those circumstances when we think it is deemed appropriate. But
I think the sense of Congress clearly needs to be determined
prior to us moving. So on the markup I would like to get a
sense of the subcommittee's own experiences in terms of how we
can best ensure that the individual examples that we have in
our districts that we know of in which parties have had to
negotiate with the Environmental Protection Agency on these
matters that we include what is fitting and appropriate to
address the air quality issues because whether it is in the San
Joaquin Valley, in the area that I represent, or whether it is
in other parts of the country where you have nonattainment
issues, I think it is critical that we are able to leverage
these dollars and to put them to the use of trying to provide
for these Supplemental Environmental Projects that will do the
most good.
Mr. Boucher. OK. Thank you. And you don't see this
requirement as unduly restricting the acceptance of projects by
EPA?
Mr. Costa. It has not come to my attention that it is. If
you have some examples or other members do, I would clearly
want to look at them to ensure that we address that issue.
Mr. Boucher. OK. That is great. Thank you.
Mr. Upton, any questions?
Mr. Upton. I really don't have any questions. I just want
to say thanks again for introducing the legislation and working
in a bipartisan manner. Thank you.
Mr. Boucher. Mr. Barrow.
Mr. Barrow. Mr. Chairman, you don't know how long I have
waited to get this witness on the stand where I could submit
him to a thorough and sifting cross-examination. But
unfortunately, there is nothing I can add by way of either
eloquence or comprehension to his statement, so I just want to
thank him for sponsoring this legislation and I will yield the
balance of my time.
Mr. Costa. And I want to thank my classmate for that
wonderful response.
Mr. Boucher. Thank you, Mr. Barrow.
Mr. Shimkus?
Mr. Shimkus. No questions.
Mr. Boucher. Mr. Matheson.
Mr. Matheson. No questions.
Mr. Boucher. Mr. Costa, with the subcommittee's thanks, we
excuse you and we will treat your legislation very tenderly.
Mr. Costa. Thank you very much.
Mr. Boucher. Thank you very much.
Let me welcome now our second panel of witnesses, the
senior vice president of Corning Incorporated, Mr. Tim Regan,
speaking from an industrial perspective, and also Mr. Conrad
Schneider, who is advocacy director of the Clean Air Task
Force, an organization comprised of numerous environmental and
health associations. We welcome both of you here today, and
thank you for taking time to share your views with the
subcommittee. Without objection, your prepared written
statements will be made a part of the record. We would welcome
your oral summaries and hope that you would keep those
summaries to approximately 5 minutes.
Mr. Regan, since I mentioned your name first, we will begin
with you.
STATEMENT OF TIM REGAN, SENIOR VICE PRESIDENT, CORNING
INCORPORATED, WASHINGTON, DC
Mr. Regan. Thank you, Mr. Chairman, Mr. Upton, members of
the committee. It is a pleasure to be here today. We are here
to endorse the bill because we think it really is necessary to
clear up a conflict that we have been the many acts of Congress
that many of you have been involved with, as a matter of fact,
and this interpretation of the Miscellaneous Receipts Act by
EPA.
I am here as president of the Emissions Control Technology
Association. We are the guys that invented the material that
sits inside a catalytic converter and creates a passive
chemical reaction which breaks up the various pollutants in the
exhaust. This technology has had a phenomenal impact to remove
1.5 billion tons of pollution from the air we breathe over the
last 35 years, and this is the successor technology. This is
what we call a diesel particulate filter. This is a device that
will filter out very, very fine particulate matter about 1 to 2
percent of the width of your human hair and it will withstand
thermal shocks and will last about 435,000 miles in a diesel
truck.
This here is an example of what we take out of the air.
This is the amount of fine particulate matter that is generated
out of a school bus over its operation for 500 miles. So I
think you can see that this is very significant. This one
device here which looks like simply a piece of ceramic, a
rather large piece, cost Corning $850 million to invest and to
invest to manufacture, so it is a rather significant
achievement.
The challenge, as has been said already before, is to see
that this technology is now crafted onto the 11 million
vehicles and engines that are out there today. It is on all new
vehicles that have been on the road since January 1, 2007, as
required equipment, but there are 22 times more vehicles and
engines in the fleet today than are put on every year. So we
have a rather significant source of pollution on these existing
vehicles, and the goal here has been and Congress's goal has
been to help get those vehicles retrofitted by providing the
equipment owners with the financial resources to make those
kinds of investments.
Mr. Boucher reviewed with you all the things that have been
done by Congress over the last 5 years and they are indeed very
significant. Mr. Shimkus has been very much involved in moving
ahead with the appropriation that the chairman mentioned, $49.2
million last year, to retrofit the vehicles under the Diesel
Emissions Reduction Act.
The problem we have is--and of course, EPA has supplemented
all that with these Supplemental Environmental Projects which
have provided another source of funding for this kind of
activity. In fact, 37 percent of the diesel retrofits that were
diesel particulate filters that were deployed from 2003 to 2006
were funded with SEPs, so it is a significant source. The
problem we have is just not enough funds, and that is sort of
exemplified by the EPA's school bus program. Seventy-five
percent of the grants don't get funded. The applications don't
get funded. And in the case of Virginia, for example, the
chairman's State, there have been 11 grants requested and only
one was funded. And so it demonstrates vividly the need for
more resources. The problem we have now is that EPA is about to
make a determination, in fact, has already made a determination
or about to implement it that they can no longer fund diesel
retrofits with these SEPs because of a potential violation
relative to the Miscellaneous Receipts Act.
Now, this is a real conflict, and we would argue in this
particular instance a statutory exclusion would be appropriate.
Statutory exclusions to the Miscellaneous Receipts Act have
been adopted before and it has been ruled that where there is
such an exclusion, SEPs can continue. This bill will
effectively provide such an exclusion.
We would say there are four compelling reasons to do this.
One, the existing vehicles are a major source of pollution on
the road today. Number 2, there are very sensitive populations
that are being affected by this pollution, for example, the 25
million students that are riding school buses every year that
are affected by it. Third, Congress has obviously acted over
and over again to provide such funding and the demand far
exceeds the supply. And finally, this is not going to have any
direct impact on the budget. So taken together, because of
these factors, we were able to generate for you a letter from
43 different groups from business, NGOs, trade associations in
support of the bill. It passed unanimously out of the
Environment and Public Works Committee last week on the Senate
side, and we can really see no compelling public policy reason
not to proceed with this.
Thank you very much.
[The prepared statement of Mr. Regan follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Boucher. Thank you, Mr. Regan.
Mr. Schneider, we would be happy to hear from you.
STATEMENT OF CONRAD SCHNEIDER, ADVOCACY DIRECTOR, CLEAN AIR
TASK FORCE, BRUNSWICK, ME
Mr. Schneider. Thank you, Mr. Chairman, Representative
Upton and other members of the committee. My name is Conrad
Schneider and I am the advocacy director of the Clean Air Task
Force, an environmental advocacy group based in Boston but
working nationwide, and we work with a national partnership to
reduce diesel emissions, a coalition of hundreds of public
health, environmental and other organizations and we support
H.R. 3754 to allow the continued use of diesel retrofits in
SEPs.
As part of the recent budget bill, Congress for the first
time appropriated money under the Diesel Emission Reduction
Act, approximately $50 million, it has been said. That will
help to pay for the retrofits that we so desperately need for
public health reasons. That is the good news. The bad news is
that EPA now has decided that these no longer qualify to be
used as part of settlements under these Supplemental
Environmental Projects, and that is because they say that it
would violate the Miscellaneous Receipts Act. We ask for your
support for this to create a clarification that EPA may
continue to use that money.
Why do we care about this as an environmental organization?
We care about it because we are engaged in a comprehensive
campaign to try to clean up diesel pollution, which is a brew
of toxins and pollution particles that can be considered the
number one environmental health problem that threats the United
States today. Eleven million diesel engines and buses and
trucks, construction equipment and so forth produce 1,000 tons
of toxic particulate matter every year, and according to a
study that was performed by EPA's benefits consultant using
EPA-approved methodology, that pollution results in
approximately 21,000 premature deaths each year plus tens of
thousands of asthma attacks and heart attacks. Nationally,
diesel exhaust poses a cancer risk that is more than eight
times higher than all of the air toxics that EPA tracks
combined. While EPA's new engine rules set the standards for
emissions from new diesel engines, EPA estimates there are
about 11 million engines currently in operation that will take
decades to fully replace them with new, cleaner engines.
This retrofit technology, as Mr. Regan mentioned, is proven
and cost-effective and I would direct your attention both to
the screen and toward I believe a piece of paper in front of
you. We did some emissions testing of a vehicle, a box truck,
before it had a diesel particulate filter on it, and you can
see the emissions there on the left, and on the right-hand side
of that chart, you can see that once it had a diesel
particulate filter, those emissions were reduced by up to 90
percent. That is the effective part of the cost-effective that
we are talking about here.
These SEP monies have been a very important funding stream
for diesel projects, providing tens of millions of dollars. In
fact, just this past December, EPA entered into a settlement
with American Electric Power containing a Federal SEP,
designating as much as $21 million for diesel retrofits. More
of concern, there are settlements that are currently under
consideration by the Agency that may exclude these very cost-
effective measures because of EPA's current opinion on this. We
feel that this position unnecessarily hampers the progress we
could be making and we applaud Representative Costa and his
cosponsors for addressing this problem by introducing this
legislation to correct it.
The Miscellaneous Receipts Act was really passed in order
to ensure that government agencies didn't bypass your
appropriations authority and keep monies that otherwise would
inure to their agency budgets rather than turning them back
over to the Federal Treasury. There is no legislative history
in that act to suggest that it was meant to disturb private
settlement agreements, particularly where the money as in here
in SEPs is really not directed toward the Agency or to the
Treasury. It is directed to really third parties who administer
these Supplemental Environmental Projects. So there is no loss
to either the Agency budget or to the Federal Treasury by
creating this exclusion as we described it.
We feel that rather than engage in a protracted argument
with the Agency about their interpretation, a statutory
clarification is in order if it can be enacted quickly,
primarily because EPA is in the midst of negotiating many of
these settlements and they won't be able to have these type of
cost-effective projects if Congress fails to act, and it won't
mean that additional dollars won't flow to the treasury. It
will mean that probably the Supplemental Environmental Projects
that are included won't be as effective as the ones that use
diesel.
So in conclusion, I just would also echo that this wouldn't
be the first time that Congress created an exclusion to the
Miscellaneous Receipts Act. It has happened many times before
and I detailed those in my written testimony. And unlike the
current bill, even those exemptions would have allowed the
executive agencies to hold onto the money. That is not what we
are asking here. We are asking that they continue to go to
cost-effective pollution control.
So thank you very much. I will be happy to answer any
questions, and we just urge passage of the bill as soon as
practicable. Thank you.
[The prepared statement of Mr. Schneider follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Boucher. Thank you very much, Mr. Schneider and Mr.
Regan. I think with your testimony and the clear understanding
that we have of this matter, there are few questions that we
need to propound.
I want to ask Mr. Regan though what the cost of installing
one of those devices on an existing vehicle is.
Mr. Regan. Somewhere within a range of $5,500 to $8,500. It
is a major undertaking.
Mr. Boucher. It is a considerable expense.
Mr. Regan. Yes, it is. It involves basically a systems
change. It has to be engineered to the particular vehicle that
it is on, and there has to be some systematic connection
between this device and the engine.
Mr. Boucher. And apart from these supplemental projects,
how much retrofitting is taking place at the present time just
because owners of these vehicles would like to emit less
particulate matter, NOx, et cetera?
Mr. Regan. Without funding, virtually none.
Mr. Boucher. Virtually none. So this measure is essential
in order to make sure that that happens on a broad basis?
Mr. Regan. Absolutely.
Mr. Boucher. OK. Let me ask Mr. Upton if he has any
questions of these witnesses.
Mr. Upton. Just briefly.
Mr. Regan, did the Clean School Bus Fund, did that
appropriate any money to help with school buses with retrofits,
or not?
Mr. Regan. Yes. The Clean School Bus USA Program was
developed by EPA and has been funded by the Congress since
fiscal year 2003.
Mr. Upton. Since 2003?
Mr. Regan. Since 2003. But the amount of funding for that
whole period of time is only something on the range of $25
million. So the Agency has not been able to even keep up with
the grants. In the period from fiscal year 2003 to 2005, they
had 292 requests for grants and they were only able to fund 72.
So 75 percent of the grant applications went unfunded.
Mr. Upton. And Mr. Schneider, do you have any record of
what kind of reductions have occurred so far with the
settlement payments?
Mr. Schneider. In terms of tonnage reduced as a result of
the money? I don't have that number but we could calculate that
number. Because the settlement agreements--the information we
have about them that the Agency keeps on that is really in
dollars as opposed to tons of pollution reduced, but there is a
calculation that we could do to get you that number.
Mr. Upton. And are there any other ways to look at
retrofits, any other funding sources that are out there, or
not?
Mr. Regan. This is a nationwide movement. States are moving
ahead doing this as well as the Federal Government so we have
got the DERA program underway. We have got the money coming out
of the SAFETEA-LU. The SAFETEA-LU made funding diesel retrofits
a priority under the CMAQ Program. There is potentially a lot
of money. And then you have got States that are doing their own
thing. California has had a program in placed called the Carl
Moyer Program funding hundreds of millions of dollars for many
years. Texas has a program, a TEFRA program to reduce emissions
in Texas. And then New York and North Carolina recently put a
law in place, and we have one in Massachusetts, in Connecticut,
in Rhode Island, in Ohio, in Oregon. So States are stepping up
because they know that this is a very cost-effective way to
reduce emissions and meet their nonattainment goal.
Mr. Schneider. Most of the States have nonattainment areas,
and because they know this is one of the most effective things
they can do, it is money well spent, and that also means that
with respect to these environmental settlements, it is money
well spent.
Mr. Upton. It does make a lot of sense.
Mr. Chairman, I have no further questions.
Mr. Boucher. Thank you, Mr. Upton.
Mr. Barrow.
Mr. Barrow. Thank you, Mr. Chairman.
Mr. Regan, I want to commend you and your outfit for what
you all are doing for this huge research and development bullet
that you all bit down on in order to be able to make this
technology as available as you have. For the benefit of those
who are here and don't realize, I represent Washington and
surrounding counties in Georgia, the kaolin capital of the
world, and you folks employ 700 families in order to try and
bring this technology to the marketplace, trying to harvest the
kaolin in that part of the world, and I commend you for what
you are doing. One question I have, I represent the kaolin
capital of the world but I also represent the birddog capital
of the world. Over in Burke County, they are working with a
sorry boy that doesn't want to try. It is a little bit like
going bird hunting and having to tote the dog. Well, working
with an Agency that doesn't want to do right can sometimes be
like going bird hunting and having to tote the dog. And the
question I have is, I respect an agency that has been doing
something for a long period of time and all of a sudden they
decide they haven't got the authority to do what they have been
doing, and all of a sudden they adopt a principled stance.
Well, we can fix that principled objection with a simple change
in the law. We are going to do that. My question is, is there
any reluctance or resistance on the part of the EPA to take the
authority this bill would give them that is the next roadblock
we have to encounter, or will we really get some response from
them? Because giving them the authority that they ought to
have, that they have had or exercised in the past is good but
now they don't want to use it.
So my question to you is, is this really the main hang-up
or is there more to it than that?
Mr. Regan. That is a question that EPA will have to answer
itself but I think that EPA's lawyers have made a very cautious
interpretation because the Miscellaneous Receipts Act basically
says that you can't take funds for activities and use them to
fund activities which have been mandated by Congress. Congress
has the constitutional authority to appropriate funds and tell
you what to do. So when you get funds, you got to put it back
into the treasury. Well, they never really touched these funds,
and so----
Mr. Barrow. They did in the past, didn't they?
Mr. Regan. No, they never really touched any of this money.
Mr. Barrow. What I mean to say is, they funded SEPs in the
past.
Mr. Regan. Right. So what they did is, they said now you
have done the DERA, you have appropriated money to do a task.
Mr. Barrow. I think that is unintended consequences that
actually strips their implied authority to use SEPs in this
way. Well, we are going to fix that.
Mr. Regan. Exactly. So our expectation is, based on our
informal conversations with the Agency, is they really would
like to continue to do this.
Mr. Barrow. Excellent. That is what I wanted to hear. Thank
you very much.
Mr. Boucher. Thank you very much, Mr. Barrow.
Mr. Matheson?
Mr. Matheson. No questions.
Mr. Boucher. Thank you, Mr. Matheson.
At this time I am pleased to recognize Mr. Upton for a
unanimous-consent request.
Mr. Upton. Thank you, Mr. Chairman. I would ask unanimous
consent that the bill H.R. 3754 be considered immediately by
this subcommittee for markup and reporting to the full
committee.
Mr. Boucher. Without objection, the subcommittee will now
considered H.R. 3754, and before we do that, I will excuse this
panel of witnesses and thank both of you very much for your
outstanding testimony here. We appreciate your joining us this
afternoon.
[Whereupon, at 2:05 p.m., the subcommittee proceeded to
other business.]