Wednesday, March 02, 2011

House Hearing On EPA GHG Regulations & Jobs

Mar 1: The House Energy & Commerce Committee, Subcommittee on Energy and Power, Chaired by Representative Ed Whitfield (R-KY) with Ranking: Bobby Rush (D-IL), held a hearing on "EPA's Greenhouse Gas Regulations and Their Effect on American Jobs." Witnesses testifying included representatives from: Ohio Coal Association; Industrial Energy Consumers of America; James River Air Conditioning Company, Inc.; Charles River Associates; Steyer-Taylor Center for Energy Policy and Finance at Stanford University; Gina McCarthy, U.S. EPA Assistant Administrator Office of Air and Radiation.
    In an opening statement Subcommittee Chairman Whitfield said, "The energy debate in America today has been summed up in about six words, and this is where we are: fossil fuels bad, green energy good. Many of us recognize that it's a lot more complicated than that. However, in order to meet our increased demands just on the electricity side, we are going to need electricity produced from all sources. The Obama administration has placed so much emphasis on green energy. Billions of dollars in stimulus money and tax incentives has gone for green energy. And the problem I have is that I think the American people are being misled about the role green energy can play in the immediate future as we use taxpayer money to help develop green energy. . ."
    Full Committee Chairman Fred Upton (D-MI) said in an opening statement, "This is a hearing about jobs. Jobs and the economy. To imply anything otherwise is misleading. Scare tactics from the other side are meant as a diversion from what EPA's greenhouse gas regulations would do to American jobs. We had this debate last Congress. Studies estimated that a cap-and-trade national energy tax would produce job losses in the millions. Yet EPA is unilaterally acting to impose the very same types of policies that Congress rejected in the 111th. . . Let's dispel a myth. Air quality and public health will not be harmed or affected in any way by efforts to slow and then stop EPA's expansive global warming agenda under the Clean Air Act. Let me repeat that: Air quality and public health will not be harmed by stopping EPA's job-crushing global warming agenda. . . Set aside the scare tactics. Listen to the facts. This issue is not about air quality and public health. It's about jobs. EPA is not looking at the impact on jobs, the Members of this Committee should and we must."
    Pursuant to a House rule, full Committee Ranking Member Henry Waxman (D-CA) and Democratic Members of the Energy and Power Subcommittee, sent a letter to Chairman Whitfield requesting at least one additional day of hearings on the subject of EPA's greenhouse gas regulations in order to hear from scientific experts. The members said, "we believe it is essential that the Subcommittee hear from our nation's leading scientific experts. At the Subcommittee's first hearing, Senator James Inhofe told the Subcommittee that he believes climate change is a "hoax." We believe the members should have the opportunity to hear from top scientists on this subject and the implications of inaction before we are asked to vote on legislation premised on the assertion that carbon pollution is harmless."
    EPA's McCarthy testified on many benefits of the Clean Air Act and then discussed greenhouse gas regulation saying, "We are now starting to address greenhouse gases by applying some of the same Clean Air Act regulatory tools that we have used so successfully for decades. EPA is compelled to do so by the Clean Air Act, the Supreme Court's decision in Massachusetts v. EPA, and the best available science, which strongly supports EPA's finding that greenhouse gases pose a threat to public health and welfare. These tools, which require the Agency to take cost into consideration, will allow the Agency to move forward with common-sense, reasonable requirements."
    She said, "The first greenhouse gas rule issued under pre-existing Clean Air Act authority is already demonstrating how sensible regulation can make sense for our economy. Last April, EPA and the Department of Transportation completed harmonized standards under the Clean Air Act and the Energy Independence and Security Act to reduce greenhouse gas pollution from new cars and trucks. The vehicles sold in model years 2012-2016 will save us 1.85 billion barrels of oil while reducing greenhouse gas emissions by 962 million tons. These rules were supported by both the auto workers and the auto manufacturers, who recognize that the standards provide for certainty, drive technological innovation, and help American automakers stay competitive in a global marketplace where fuel efficiency increasingly matters."
    She also said, "EPA is also focusing on energy efficiency as the method of meeting greenhouse gas permit requirements for power plants and other large industrial facilities that are building new facilities or making major modifications at existing facilities. A group of 11 power companies observed that: 'EPA has proposed a reasonable approach focusing on improving the energy efficiency of new power plants and large industrial facilities.' This focus on energy efficiency should promote measures that reduce both emissions and long-term costs for facilities."
    America's auto dealers said they "support a single national fuel economy standard and increases in fuel economy that make sense to consumers. Our primary concern is not necessarily over the stringency of the fuel economy standard, but rather the overall structure of the fuel economy regulations that govern automobiles today, which currently emanate from three different programs established by three separate government agencies. A single national standard will more effectively increase fuel economy, enhance economic growth, protect passenger safety, and protect the environment. Unless and until consumers actually purchase new vehicles, none of these benefits will be realized. . . State regulation is completely unnecessary and ineffective because the vigorous CAFE program Congress designed, coupled with EPA regulation of vehicle air conditioners, results in approximately the same amount of fuel saved and greenhouse gases reduced."
    Charles River Associates (CRA) discussed "how a study of green jobs released last month by Ceres and PERI gives a biased and incomplete picture of the effects of regulation and of how jobs are created." He discussed CRA model of the effects of EPA's proposed greenhouse gas regulations on energy prices, employment and competitiveness. He said, "These regulations undeniably raise the cost of doing business. Tradeoffs must be made between economic costs and environmental benefits in designing regulations, and pretending there is no cost does not help those deliberations."
    Finally CRA indicated that, regulation of GHG under the Clean Air Act "is likely to take an even more costly course. Our analysis and that of just about every other modeling team has found that command and control regulations EPA must use under Clean Air Act authorities greatly increase costs above even the levels that carbon taxes or a cap and trade system would impose. The reason in simple terms is that command and control regulations are designed by bureaucrats who know next to nothing about the circumstances of individual businesses. Therefore, their orders cannot possible lead to the same cost-effective solutions that managers would find for their own businesses when facing a price on greenhouse gas emissions. So the result is that after the Congress decided not to create a cap and trade system, the EPA is following through with an approach that would impose far higher costs to achieve similar levels of emission reduction."
    Access the hearing website for links to all testimony, a background memo, opening statements and a webcast (click here). Access the letter from Rep. Waxman, et al (click here).
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