Today is the second Hearing on Clean Air Act Reauthorization held by this Subcommittee. The first Hearing was last October on general reauthorization issues. Today's hearing will address the effect of multiple EPA regulations addressing the same pollutants, as well as a look at the current implementation of the Air Program by EPA. We will have a third Reauthorization Hearing later this summer addressing the impact on States and local governments.
We will begin today's hearing with testimony from the General Accounting Office. They have conducted two investigations concerning the Air Act and will be reporting on their findings. The first report provides a snapshot of the status of the Clean Air Act implementation. The second report addresses the multiple regulatory requirements addressing the same pollutants. Specifically the report looks at three industries, the refining industry, the chemical industry, and the utility industry.
I requested this report over a year ago because of my concern that the Clean Air Act imposes multiple and sometimes conflicting requirements addressing the same pollutants. The results are very interesting. For example, there are seven different air programs controlling nitrogen oxides from utilities alone, refiners are regulated under five different Titles of the Act, and chemical companies are regulated under seven different programs. I am glad that earlier this year Chairman Smith took an interest in this issue, on how it relates to the utilities, and I look forward to continuing my work on this issue with him over the next year.
Our second panel will focus this issue, the multiple regulatory environment, on the utility industry. This panel will look at the incentive-based utility emissions reduction approach. The idea is to provide regulatory certainty for the utility industry regarding a set of agreed upon pollutants. Industry and the public would then know what reductions are going to be made and the timing for the reductions. I will be working with Senator Smith on this approach this year with the goal of having a Bill by the end of this year.
I will also be introducing a number of smaller Bills this year for discussion purposes. Next year we will combine all of these legislative ideas into one large reauthorization package. I am not prejudging this year what will or will not be included in the package. The whole idea is to generate discussion now, and then reauthorize the Act in the next Congress.
For the purposes of the utility emissions reduction plan I have a number of concerns and questions which I hope we can address today and in the coming months.
1. I believe it must be a voluntary program.
2. I have grave concerns regarding CO2, I do not support giving EPA the authority to regulate CO2, even in a voluntary program.
3. How would companies who have already made large reductions be treated, would they end up being penalized because they made reductions before everyone else?
4. How will utilities in areas of the country who have not had to make reductions in the past, particularly the West, be treated. Should reductions be based on a set number, or just a reduction percentage?
Here is a quick example about how utility costs impact not only our national economy, but also our State and regional economies. Last week I meet with the president of a Steel mill in Oklahoma who explained to me that every summer they close production down for several weeks when utility prices spike due to the high summer demand. Last year they closed for a month because their utility costs reached $150 dollars per ton, and with steel selling at $225 per ton it was not profitable to remain open. They only remain competitive when their local utility is maximizing their high efficiency coal plant. When the more expensive smaller units come online during peak demand months the utility costs become prohibitive. What ever we do in this Committee, we are going to have to keep that in mind. The only way we can continue to keep manufacturing jobs in the U.S. is to maintain our efficient, reliable, and cheap fuel supply.
A final note on utility deregulation. I am adamantly opposed to including environmental provisions in the Dereg Bill. Those provisions must be considered by this Committee in conjunction with Clean Air Act Reauthorization, not as a separate measure.
With these ideas in mind, I look forward to the testimony today and working on this issue in the coming months.