Today is the second day of hearings on the EPA's proposed sulfur standard, which is part of the Tier Two Automobile standards. On Tuesday we heard from States, the Oil and Auto industries, a public interest group and a witness representing an alternative biotechnology. Today, we hear from the EPA, Bob Perciasepe, the Assistant Administrator for Air. We scheduled the EPA on the second day as a courtesy to the Agency. This allows the EPA to respond to points raised by the other witnesses.
I have many concerns regarding the EPA's proposed sulfur standards. After Tuesday's hearing my concerns have increased. I have been raising a number of issues to the Administration regarding sulfur for over a year, and these issues were not answered or addressed in the proposed rulemaking.
I was extremely disappointed that my concerns were largely ignored by the EPA in the proposal. The EPA's proposed sulfur standard is an unworkable program which, if enacted, would jeopardize and create disruptions in our national fuel supply, will lead to the closing of refineries, threaten our national security by making us more reliant on foreign refined products, and will provide limited benefit to the environment.
On Tuesday I explained some of my major concerns, after listening to the testimony Tuesday I am adding to my concerns and I will just list them briefly.
1. Small Refiners -The EPA has failed to justify why they are using a 1500 employee definition, particularly when other sections of the Clean Air Act use a volume definition.
2. Small Refineries - The cost margins are the same whether a refinery is owned by a large company or a small company.
3. Phase-In Time - EPA has provided the Auto's with a generous phase-in time while ignoring the equipment installation problems for refineries.
4. Cost Data - The EPA's cost data assumes everyone will use the new equipment which has only been installed in one refinery to date.
5. Regional Approach - The Western Governors overwhelmingly object to the national standard and their concerns have not been addressed.
6. New Technologies - The EPA has ignored important new alternative technologies such as Biotech, which will not be ready for the 2004 deadline.
7. Closures - The EPA believes no refineries will close, without conducting a detailed Refinery review like the one conducted by Canada which found that 3-6 of their 18 Refineries would close.
8. National Security - Ignoring the refinery closure issue, EPA has failed to consider the impacts on our national security by creating a greater reliance on foreign refined products.
9. The Banking and Trading program is too little too late.
10. Cost Effectiveness - The EPA did not cost out other approaches to reducing the pollutant, such as other sulfur levels or phase in dates.
11. MTBE Usage - Just like they didn't consider the negative health impacts of ozone reduction, they did not consider the impact of increased MTBE usage.
12. Cost of Gasoline - Due to EPA's incorrect equipment cost projection and supply disruptions they have grossly underestimated the cost impact on gasoline.
This is not an exhaustive list, I do have other issues which I will raise in the question period. I do want to say a brief word about the recent NAAQS court case. While the court did not address the Tier Two regulations, it is important to note and remind the Agency that for the last three years EPA has claimed that new auto and fuel standards are necessary to help areas meet the new air standards.
I also want to point out that in the proposed Tier Two rule the EPA uses the term "8 hour standard" 48 times; "new ozone" appears twice; "new PM" appears 5 times; and PM 2.5 appears 35 times. For anyone to say that the EPA has not relied on the new NAAQS standards for this rulemaking they simply are not reading the record.