[Senate Hearing 106-911]
[From the U.S. Government Publishing Office]
S. Hrg. 106-911
EPA'S CLEAN AIR BUDGET AND THE CORPS OF ENGINEERS' WETLANDS BUDGET
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON
CLEAN AIR, WETLANDS, PRIVATE PROPERTY AND NUCLEAR SAFETY
OF THE
COMMITTEE ON
ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
ONE HUNDRED SIXTH CONGRESS
SECOND SESSION
__________
MARCH 28, 2000
__________
Printed for the use of the Committee on Environment and Public Works
U.S. GOVERNMENT PRINTING OFFICE
68-416 cc WASHINGTON: 2001
_______________________________________________________________________
For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington DC
20402
COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
one hundred sixth congress, second session
BOB SMITH, New Hampshire, Chairman
JOHN W. WARNER, Virginia MAX BAUCUS, Montana
JAMES M. INHOFE, Oklahoma DANIEL PATRICK MOYNIHAN, New York
CRAIG THOMAS, Wyoming FRANK R. LAUTENBERG, New Jersey
CHRISTOPHER S. BOND, Missouri HARRY REID, Nevada
GEORGE V. VOINOVICH, Ohio BOB GRAHAM, Florida
MICHAEL D. CRAPO, Idaho JOSEPH I. LIEBERMAN, Connecticut
ROBERT F. BENNETT, Utah BARBARA BOXER, California
KAY BAILEY HUTCHISON, Texas RON WYDEN, Oregon
LINCOLN CHAFEE, Rhode Island
Dave Conover, Staff Director
Tom Sliter, Minority Staff Director
------
Subcommittee on Clean Air, Wetlands, Private Property, and Nuclear
Safety
JAMES M. INHOFE, North Carolina, Chairman
GEORGE V. VOINOVICH, Ohio BOB GRAHAM, Florida
ROBERT E. BENNETT, Utah JOSEPH I. LIEBERMAN, Connecticut
KAY BAILEY HUTCHISON, Texas BARBARA BOXER, California
(ii)
C O N T E N T S
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Page
MARCH 28, 2000
OPENING STATEMENTS
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma... 1
Smith, Hon. Bob, U.S. Senator from the State of New Hampshire.... 15
Voinovich, Hon. George V., U.S. Senator from the State of Ohio... 12
WITNESSES
Davis, Michael, Deputy Assistant Secretary of the Army (Civil
Works), U.S. Army Corps of Engineers........................... 5
Prepared statement........................................... 34
Perciasepe, Robert, Assistant Administrator for Air and
Radiation, U.S. Environmental Protection Agency................ 2
Prepared statement........................................... 28
Responses to additional questions from Senator Inhofe........ 31
(iii)
EPA'S CLEAN AIR BUDGET AND THE CORPS OF ENGINEERS' WETLANDS BUDGET
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TUESDAY, MARCH 28, 2000
U.S. Senate,
Subcommittee on Clean Air, Wetlands, Private Property
and Nuclear Safety,
Committee on Environment and Public Works,
Washington, DC.
The subcommittee met, pursuant to notice, at 9:30 a.m. in
room 406, Senate Dirksen Building, Hon. James M. Inhofe
(chairman of the subcommittee) presiding.
Present: Senators Inhofe, Voinovich, and Smith [ex
officio].
OPENING STATEMENT OF HON. JAMES M. INHOFE,
U.S. SENATOR FROM THE STATE OF OKLAHOMA
Senator Inhofe. I will call the meeting to order, right on
time.
Today's subcommittee hearing will look at the
Administration's budget for both EPA's Air Office and the Army
Corps' Wetlands Program. I am very concerned about the budget
for both offices and their priorities for next year.
In the Air Program, I notice that you have once again
requested funding for the Clean Air Partnership Trust Fund. I
think last year when we talked about that, we referred to it as
a ``slush fund.'' We decided that it was not a good program, so
we disagreed with that at that time. I see it is coming back
now.
Maybe you can address this in your opening statement, Mr.
Perciasepe. Perhaps we have received information that we didn't
have before, but if we did, my staff has not given it to me. I
understand you are dropping it down now from $100 million to
$85 million, which doesn't really have any bearing on it. If
it's a program that's not justified at $100 million, it
wouldn't be justified at $85 million.
I am also concerned that there are some areas that are not
funded. I can't find new resources in the budget to help with
the permitting necessary for the new sulfur rule, which was
promised last year during the discussions on the proposals.
There are important studies on ethanol which were
recommended by the Blue Ribbon Panel last year, but not funded,
even though just last week Carol Browner announced support for
a new ethanol mandate. I think that, once again, the Agency is
moving forward with a political agenda without having first
studied the science to support it.
On wetlands, this month the Corps announced a new
replacement Permit for the No. 26 Nationwide Permits. We held a
hearing on this subject almost 3 years ago, and I am concerned
that the Corps has not adequately budgeted for the new permit
process. They certainly haven't requested enough funds to cover
additional individuals' permits. We'll have some questions
about that during question and answer time.
Last year, the House Appropriations required the Corps to
conduct a workload study in relation to Nationwide Permit
changes. I am shocked that the new permit regulations were
released before the workload study was completed and released.
Now, maybe it's been completed; but if it's been completed, we
haven't seen it yet.
So we have two witnesses today, Bob Perciasepe, the
Assistant Administrator for EPA's Air Office, and Michael
Davis, Deputy Assistant Secretary of the Army Corps. I intend
to get to these issues and priorities during the course of the
question and answer period.
You look different this time, Mr. Davis, from the last time
you appeared.
Mr. Davis. It's probably the beard, sir.
Senator Inhofe. The beard. That's it, yes.
Why don't we start, Mr. Perciasepe, with you? I enjoyed
being with you yesterday in San Antonio, and here we are back
in Washington.
STATEMENT OF ROBERT PERCIASEPE, ASSISTANT ADMINISTRATOR FOR AIR
AND RADIATION, U.S. ENVIRONMENTAL PROTECTION AGENCY
Mr. Perciasepe. It's the modern era. Two hundred years ago,
it would have taken us months to do that trip.
Senator Inhofe. That's right.
Mr. Perciasepe. Somehow, maybe that slower lifestyle would
have been a little easier on all of us, although I understand
from historical records that travel was rigorous.
Let me just say thank you for the invitation today, Mr.
Chairman, and let me do a couple things in my opening
statement: first, give you a few highlights of some of the
successes of the Clean Air Act since 1990, and then focus on
the budget priorities of this year.
Since 1990, when Congress enacted the amendments to the
Clean Air Act with overwhelming support, we as a country have
achieved unprecedented success in the air quality area, and
we've done this not only with rulemakings, but with voluntary
measures, with market mechanisms, with partnerships with the
States, and with stakeholder negotiation processes.
The EPA recently conducted a study that was authorized by
Congress under section 812 of the Clean Air Act, to look
prospectively at the costs and benefits that we might see from
some of the improvements, and we projected out to 2010. In our
central estimate of benefits going out to 2010, it is about $83
billion a year, and that exceeds the projected costs by about
four to one.
This is on top of the fact that over the last several
decades, the gross domestic product of the United States has
gone up 114 percent; the U.S. population has gone up by 31
percent; vehicle miles traveled every day has gone up 127
percent; and the aggregate pollutants that we are all concerned
about have gone down 31 percent. So it is clear that we have
made tremendous clean air progress, that it is cost-beneficial,
and it is done while we are continuing to grow the U.S.
economy.
Some specific examples of those successes are the Acid Rain
Program, which has reduced emissions by 22 percent, or 3.5
million tons, and reduced acidity in the eastern part of the
United States by up to 25 percent. Working on a global scale,
we have reduced the emissions of stratospheric ozone-depleting
substances and CFCs. We have reduced air toxics, using the
maximum available control technology standards, by over 1.5
million tons. And our cities are cleaner. This is where people
live, and most of the cities in the United States have cleaner
air now than they did 10 years ago.
Two of the big reasons for this success are cleaner cars
and cleaner fuels, both in terms of the congressionally
authorized car emission standards in 1990, and the reformulated
gasoline program. We have had substantial reductions in the
pollution in our Nation's cities. And as you know, last
December we promulgated the second phase of those air quality
standards and gasoline changes, called Tier II, in low-sulfur
gasoline.
EPA's voluntary climate programs have also been making
significant progress and return on their investment. For every
dollar that we spend on our voluntary programs, consumers have
invested $15. Private sector and consumers have invested more
than $15 million in new, efficient technologies, and businesses
and consumers have saved over $70 in greenhouse gas--that's for
each Federal dollar of investment--and half a ton of emissions.
Our study also showed tremendous health benefits from these
reductions between now and 2010. I won't go through everything
in great detail here because I know that we have a short period
of time, but there are 23,000 fewer incidences of mortality;
20,000 fewer cases of chronic bronchitis; 47,000 fewer cases of
acute bronchitis; 22,000 fewer respiratory-related hospital
admissions. I have submitted the rest of this for the record.
If we funded the voluntary climate programs at the
President's request, by 2010 we would have an additional $35
billion in energy savings to families and businesses in the
United States.
Moving to our priorities for this year, we are going to
continue working on the large trucks and buses and diesel fuel
in the same manner that we tried to work with the automobile
industry and the fuel industry last year on light duty
vehicles. We are starting implementation of Phase II of the
Acid Rain Program. We are going to continue with the Air Toxics
Program under the MACT standards. We are going to work on Yucca
Mountain, the nuclear waste disposal site in Nevada. A year and
a half ago we did certify the Waste Isolation Pilot Plant in
New Mexico, and it is now receiving high-level radioactive
waste.
We are going to continue to carry out the voluntary
programs under the Climate Change Technology Initiative, both
in terms of industry and consumer products, but also on
vehicles. We work very closely with the automobile industry on
the vehicle program, and we have the EnergyStar program where
we work very closely with industry and manufacturers.
In the 2001 budget, you have already mentioned in your
opening comments at least a couple of the items that we'll talk
about today. Our air budget does increase in the President's
budget request to Congress. One of the items that you've
mentioned is the $85 million for the Clean Air Partnership
Fund. This is a fund that we want to help fund, and it is fully
authorized under section 103 of the Clean Air Act.
The idea with the Clean Air Partnership Fund is to provide
funding to State and local governments and air quality
management districts so that they can work in partnership with
businesses and industry in their area to look at innovative
ways to solve more than one problem at once. One of the
problems we have is that many of the regulations or programs
that were laid out by Congress in the Clean Air Act focus on
one pollutant at a time. We know that there are strategies that
can be more holistic in their approach. So we would like to use
those funds to demonstrate those at the local level. We want to
leverage the original funds by having matching funds. In
leveraging, we want to have public involvement and provide
examples that we could then replicate across the country, and
perhaps even provide ideas that go into the process that you
have been working on in terms, Mr. Chairman, of reauthorization
or amendments to the Clean Air Act.
On the climate change front, we are asking for almost a
doubling in the funds to expand the partnership efforts with
businesses and organizations and consumers.
I think I'll stop there; those were the larger increases.
The remainder of the funding is to target some key areas, like
air toxics and implementation of the existing rules and to
continue to implement the 1-hour ozone National Ambient Air
Quality Standard, and do some of the preparatory work that will
be needed in the future for new standards, like continuing to
maintain and provide funds for States to operate the PM
monitors and things of that nature.
So I am going to stop there, Mr. Chairman.
Senator Inhofe. I neglected to mention when we opened up
that we're going to have 5-minute opening statements. If you
want to go longer, that's all right. Your entire statement will
be made a part of the record.
You know, when Mr. Davis is through I would like to have
you elaborate a little bit more because we had requested
information on specifics on this Clean Air Partnership Trust
Fund. I don't like these open-ended amounts that go in without
knowing specifically what types of programs. It's all well and
good to say that ``we're going to get local matches,'' but I
want to know, local matches for what? What are the programs?
How much is going to be spent? What are the expectations? And I
don't think we've received any of that. You might want to
address that when Mr. Davis completes his opening statement.
Mr. Davis?
STATEMENT OF MICHAEL DAVIS, DEPUTY ASSISTANT SECRETARY OF THE
ARMY (CIVIL WORKS), U.S. ARMY CORPS OF ENGINEERS
Mr. Davis. Mr. Chairman, thank you for the opportunity to
provide testimony on the Army Regulatory Program budget and
recent regulatory program initiatives. I am Michael Davis,
Deputy Assistant Secretary of the Army.
In my complete statement, which I have submitted for the
record, I provided an overview of the regulatory program;
current levels of performance; recent regulatory initiatives,
and the regulatory program budget. I will summarize my comments
in each of these areas.
During fiscal year 1999, the Army regulatory program
provided written authorization to over 90,000 activities, the
most in any year. Over 90 percent of these actions were
authorized in less than 60 days. This work is accomplished by
approximately 1,100 highly skilled and dedicated regulatory
staff members nationwide.
The Section 404 Program is a vital part of our Nation's
overall effort to protect, restore, and preserve our water
resources. The overarching statutory goal of the program is to
protect the waters of the United States, including wetlands.
Over the past 28 years the Army Corps of Engineers has
prevented the destruction of hundreds of thousands of acres of
wetlands and the degradation of thousands of miles of rivers
and streams. This has reduced property damage and loss of life
from flooding and protected fish and wildlife habitat and water
quality, all vital to the Nation's economy and overall health.
From a good public policy and investment perspective, the
Section 404 Program has been a success. For example, the
program has played a key role in reducing the loss of wetlands
from over 400,000 acres per year in the mid-1970's to
approximately 100,000 acres a year in the mid-1990's.
While the program stems the loss of wetlands and other
aquatic resources, it has done so in a manner that minimizes
unnecessary regulatory burdens on those who must apply for
permits. Administering the Army Regulatory Program in a fair,
flexible, and effective manner has been a priority of the
Administration since 1993.
The Corps received an average of 74,500 Section 404 permit
requests each year from fiscal year 1996 to fiscal year 1999.
Of those requests, 84 percent were authorized through a general
permit; only 6.7 percent of all permit applications were
subject to the more detailed standard individual permit
evaluation that requires impact avoidance and compensation.
Because of the program's effectiveness in avoiding and
compensating for impacts, only three-tenths of 1 percent of all
Section 404 requests were denied.
From fiscal year 1996 to fiscal year 1999, the average time
to reach a decision on individual permits was 107 days.
Decisions for general permits were reached in only 14 days.
The general permit program is an important part of the
overall regulatory program. By providing a screening mechanism,
it allows the Corps to set priorities and focus its resources
on those activities with potential for greater environmental
impacts.
Before I discuss the new Nationwide Permits, I think it is
important to review the legal requirements of all general
permits, as found in Section 404(e) of the Clean Water Act.
First, general permits must be for a category of
activities.
Second, general permits may not result in more than minimal
impacts, either individually or cumulatively.
And finally, general permits may be issued only after an
opportunity for public notice and comment, and are valid for no
more than 5 years.
The most widely used general permits are the Nationwide
Permits. Of the over 40 Nationwide Permits, Nationwide Permit
No. 26 was used the most, by permitting a wide variety of
activities in specific waters, such as headwaters and isolated
waters. Nationwide Permit No. 26 also engendered considerable
controversy and was the subject of litigation by the
environmental community, who argued that it did not meet the
statutory requirements of the Clean Water Act.
As our scientific understanding of the importance of
headwater systems and isolated wetlands improved, we became
concerned that from a national perspective, activities
authorized by Nationwide Permit No. 26 might, in fact, have
more than minimal adverse impacts on the aquatic environment.
The concern was that Nationwide Permit No. 26 authorized too
many projects in the headwaters and isolated waters, increasing
the frequency of flooding, destroying viable fish and wildlife
habitat, and impairing water quality.
Many continued to question the legality of Nationwide
Permit No. 26, casting doubt and uncertainty on the entire
nationwide permit program. In a 1995 report, the National
Academy of Sciences questioned the scientific validity of
Nationwide Permit No. 26. The President's 1993 Wetlands Plan
called for a review of Nationwide Permit No. 26. In addition,
this Administration has been unequivocal in its promotion of
the wise and sustainable use of our floodplains. Every year
lives are needlessly lost, and the Nation spends over $4
billion paying for flood damages. In 1996, the Army modified
Nationwide Permit No. 26 and reduced the maximum allowable
impacts from 10 acres to 3. The Army also committed to further
improving protection by replacing Nationwide Permit No. 26 with
more environmentally benign activity-based nationwide permits.
In this regard, on March 7, 2000, as you indicated, after
several opportunities for public comment, the Corps issued five
new nationwide permits and modified six existing nationwide
permits. The new and modified nationwide permits will become
effective June 7th, 2000, and these permits substantially
improve environmental protection, while allowing those
activities that are truly minor to go forward with little or no
review.
Under the new nationwide permits, only those activities
involving less than one-half acre of impacts will be allowed.
In addition, to further reduce adverse impacts from flooding
caused by development in the floodplain, we have also added a
permit condition that prohibits the use of most of the
nationwide permits in much of the hundred-year floodplain. We
have also added a condition that prohibits the use of the
nationwide permits in critical resource waters, such as
critical habitat for endangered species, and wild and scenic
rivers.
As we developed the new nationwide permits, we not only
considered the need to improve environmental protection, but we
also considered the effect of such changes on Corps workload
and the regulated public. Based on our review, we are confident
that the final changes made on March 7th are needed and
justified by the increased environmental protection.
While the Corps' workload will in fact increase some, we
predict that over 80 percent of all Section 404 activities will
continue to be covered by general permits.
Now I am going to turn just for a moment to the
administrative appeals process.
On March 9, 1999, we published a final rule establishing an
administrative appeal process for permit denials and declined
permits. That rule became effective on August 6th, 1999. To
date we have evaluated 12 requests for appeals of denied
permits. One has been sustained, one remanded back to the
District, and ten are pending. In the fiscal year 2000
appropriations for the Corps Regulatory Program, the Congress
provided funds to administer an appeals process for
jurisdictional terminations, and I am pleased to note that the
final rule for this part of the appeals process will be
published in The Federal Register today.
Regulatory appropriations have increased over the last 10
years, from $64.5 million in fiscal year 1990 to $117 million
in fiscal year 2000. The President's budget request for the
Army Regulatory Program for fiscal year 2001 is $125 million.
Program funding increases have, for the most part, covered only
the normal year-to-year labor costs, along with some
programmatic initiatives and special studies. Increases in the
regulatory program budget were necessary to cover the cost of
additional staff, and also to respond to an increasing need to
improve environmental protection and develop programmatic tools
to improve overall performance.
The regulatory program 2001 funding request of $125 million
is necessary to ensure that we continue to provide effective
regulation of the Nation's wetlands and waterways.
Approximately $5 million of this amount is needed to help
address increases in workload.
In conclusion, Mr. Chairman, the Nation's aquatic resources
are vital to our environmental and economic health. Our rivers,
lakes, and wetlands are the lifeblood of our great landscapes.
They support the fish and wildlife that we catch, hunt, and
watch. They provide us with water, an essential component for
all living things. The Army regulatory program plays an
important role in protecting these resources for today and for
future generations. Through the Army regulatory program we are
committed to serving the public in a fair and reasonable
manner, while ensuring the protection of the aquatic
environment, as required by laws and regulations.
We will continue to pursue the important initiatives that I
have discussed today. Our regional and nationwide general
permits program will continue to be evaluated for opportunities
to improve both environmental protection and performance. We
have established a full administrative appeals process that
will allow the public to challenge permit decisions and
jurisdictional terminations without costly, time-consuming
litigation.
The President's budget request is needed to help maintain
this level of commitment and service.
Thank you, Mr. Chairman, for the opportunity to provide
this statement today.
Senator Inhofe. Thank you. I hope you will convey to my
good friend, Dr. Westphal, that I share his concern and his
grief over OSU losing in the final 8.
Mr. Davis. I will pass that on. He would be with you today,
except he is testifying at a hearing as we speak.
Senator Inhofe. I see.
Mr. Perciasepe, we ended up talking about the Clean Air
Partnership Trust. Did you want to add anything in terms of
specifics that we are going to be getting concerning that?
Mr. Perciasepe. On the Clean Air Partnership Fund?
Senator Inhofe. Yes.
Mr. Perciasepe. Well, first, just a tiny bit on the history
of this. A year and a half ago, when I first started working on
the Air Program, we at EPA--and I think it was widely
distributed. EPA received a report from the State Air
Directors, a group called STAPPA/ALAPCO, State and Local Air
Directors. Their report to EPA proposed ideas for looking at
pollution reduction at the State and local level, looking at
more than one pollutant at a time as opposed to one pollutant
at a time. It was in part from those kinds of discussions that
this idea was derived.
Now, we made a commitment to the State and local
governments that we would design the program with them, and
we've done a little bit of those consultations, but we have a
little bit of a ``chicken and egg'' here. We've done enough
consultations where I could lay out that, ``We have some
general criteria that we would like to use.'' We haven't
enacted regulations on how we would distribute the grant funds,
but it would require some kind of matching or leveraging: if a
locality wanted to use some of the funds to set up a local
revolving loan fund to provide low-interest loans to people,
for instance, in a brownfields location, that they can deal
with innovative technologies and solve their air quality
problems at the same time, that that would be something we
would want to do.
We have done some of this work, and I think we have and can
provide these outlines that we've done already, but we could
certainly get together with these folks and do a little bit
further refining on it. But again, I want to find the right
balance between completely defining it on my own at the EPA and
being accused of not consulting with the people who are going
to use the funds. That's the dilemma.
Senator Inhofe. I see that.
Last year, during the gasoline sulfur debate, the Agency
promised that they would provide the needed resources to get
the refiners' permits approved quickly so that they could make
the equipment changes to meet the deadlines that were out
there. I am concerned that the budget didn't include any
additional resources, either in funds or employees, to assist
in this. How are you going to ensure that the permits are
processed quickly without additional resources?
Mr. Perciasepe. We are diverting some of our existing funds
toward the work that EPA needs to do to provide the information
to allow the permitting processes to go more smoothly at the
State level. We have folks working on identifying in advance
the array of technology options that would be available for the
kinds of emission control devices that you would want to have
associated with whatever--the types of equipment that we
envision being utilized for desulfurization, and there is a
number of technologies, as you know, being developed. In fact,
a draft of that work is currently being reviewed by some people
at the State level and some people in the industry.
Senator Inhofe. Well, if you are diverting, first, where
are you diverting them from? And then quantify this diversion.
Mr. Perciasepe. Well, we can certainly provide some
quantification of this for the record.
[Information follows:]
There are no changes in the fiscal year 2001 budget request
to support new source permitting changes that may result from
the desulfurization requirements of the Tier Two rule. When the
Agency took comments on the proposed rule, states did not
identify an inability to meet the permitting schedule with
their current assistance levels. In fact, states with some of
the largest number of sources subject to Tier Two have
indicated that all their permitting could be completed rather
quickly, even as quickly as 6 months.
The Agency expects that the rule will require changes to
only small parts of each of the 115 refineries nation-wide.
These permit changes will occur over a 3-5 year period and will
be assimilated into the base permit review load of the states
affected. Therefore, states did not identify a need for
additional funding assistance when they provided comment on the
rule.
EPA is taking a number of steps all of which should help
ensure that permit review and issuance is done as quickly as
possible in order for refineries to meet the Tier II
requirements. For example, we have formed an EPA Tier II
permits team of experts to help states facilitate Tier II
permitting. This includes representatives from each of the
Regions where refineries are located, as well as across EPA.
Another example is the development of best available control
technology (BACT) guidance that will be available for public
review in the next week or two. This will assist permitting
authorities by letting them know what EPA would likely accept
as best available control technology for emission units that
are subject to the New Source Review Program. That being said,
this guidance would not preclude any specific state permitting
decisions that would be made due to new information or site
specific information that arises during the public comment
period. A third example is that EPA will be conducting outreach
efforts to states, refineries and communities where
environmental justice concerns are raised.
Mr. Perciasepe. But we have a budget allocation for work on
Title 5 permitting issues, and we have a staff in both the
regions and in our office in North Carolina who do this; this
is the work that they do. What we've told them is that over
this coming year, they have to do some of this developmental
work.
The more that we can do up front to define what needs to be
done in the permitting process, the less work will need to be
done on a permit-by-permit basis.
Senator Inhofe. OK.
Yesterday we briefly touched on this in your presentation
and my presentation down in San Antonio, but with the
Administration coming out with the program that announced the
MTBE principles--which includes replacing the oxygenate mandate
with renewable mandate nationwide--would it require that all
gasoline have at least 1.2 renewable, which means ethanol,
because it's an ethanol mandate that they came out with? This
would require significant new resources at each refinery and
for the distribution system across the country.
Have you conducted any studies to determine what the cost
of implementing this nationwide mandate would be? Because we're
going from those that were just out of attainment, to all
refineries across the country. I don't know what kind of
studies you've had to determine how much money that's going to
be, for industry.
Mr. Perciasepe. OK. First of all, let me try to be clear
about what we're proposing. We're not proposing that in all the
reformulated gasoline areas--of which there are, I think, 10 or
11 cities in the country that are required to receive
reformulated gasoline, and it's areas from New England all the
way to California--that the 2 percent by weight oxygenate
requirement be replaced in those areas with this 1.2 percent by
volume minimum requirement for renewable fuels.
Incidentally, 2 percent by weight volume for ethanol would
be about 5.5 percent by volume. That's the way that would work
out. But the idea behind that proposal is that when Congress
and the executive branch agreed on this reformulated gasoline
program back in 1990, and put the oxygenate requirement in the
statute, they had a number of objectives in mind. One was air
quality, but other ones were using domestic supplies of energy
to help in our transportation energy supply. And in order to
maintain that, you want to maintain the amount that's currently
in there, and that's about 1.2 percent, give or take a tenth of
a percent, by volume of ethanol. On a national basis--we're
suggesting that we hold that, so if we're already using 1.2
percent of our gasoline as blended with ethanol, then we would
suggest that you start by just holding that. There would be no
cost to holding that minimal existing level, because you can
average it across the country and across times of year. We're
not talking about having every refinery and every gallon of
gasoline have 1.2 percent----
Senator Inhofe. But there are some areas where there is no
ethanol.
Mr. Perciasepe. That is correct.
Senator Inhofe. And under this new rule, this would mandate
that ethanol replace something else.
Mr. Perciasepe. Well, if we reduce MTBE, which was the main
purpose of the----
Senator Inhofe. Reduce it, or eliminate it?
Mr. Perciasepe. We're asking for the authority to do one of
those two things, and that will require a followup rulemaking
and analysis of the final determination of that. But under any
of those scenarios, we use about 4.5 billion gallons a year of
MTBE, or methyl-tertiary butyl ether, in our Nation's gasoline.
And if we eliminate that--let's just say eliminate that--then
you're talking about filling a volume of 4.5 billion gallons of
fuel, and there are a number of options to fill that volume.
One of the options is ethanol, because it has good octane. One
of the options might be iso-octane; another option might be
alkalates; and there are other options----
Senator Inhofe. The last two that you mentioned are very
heavy in toxics.
Mr. Perciasepe. Say that again?
Senator Inhofe. The last two that you mentioned are very
heavy in terms of toxics. I thought we were not----
Mr. Perciasepe. Well, I'm not sure about that. It would be
the aromatics that would cause more of a toxics problem, and
that would be the benzenes, the toluenes, the xylenes. There
are some companies that would be looking at some of those, but
our view would be that you would want to maintain the existing
benefits that we have achieved, including the toxics benefits.
That's one of the principles that we put out. I know the
committee has been looking at ways to put that in legislation,
and we're obviously willing to work with you on that.
So if you sort of look at this as taking the reformulated
gasoline program and making it more flexible so that as we
phase down MTBE, refiners will have flexibility in how they
meet those performance standards of the Air Quality Program and
are not beholden to the 2 percent oxygenate requirement in
every reformulated gasoline area. At the same time, we
recognize the broader objectives of the oxygenate requirement
and start with the existing use of renewable fuels and grow it
over a decade, providing the long lead time necessary for that,
and not prescribe the geographic areas or the time of year that
that would have to be done, giving additional flexibility----
Senator Inhofe. Well, it sounds like there is going to have
to be a lot to be done if you carry on with this announced plan
that came out of the EPA last week. Now, in this budget do you
have funds to have a comprehensive study for all this stuff
that we're talking about on which substitutions to use, what is
going to be required, what the cost is going to be? Because
when I looked at this, when I first saw it--actually, you were
kind enough to call me up and give me a ``heads up'' on it, but
it's just an ethanol mandate, nationwide.
Mr. Perciasepe. Well, I can't say that it's not, but I can
say that we're suggesting that it start where we already are.
So you start where there is very little cost, and you allow it
to grow gradually over 10 years. We can do the analysis, and
would want to do the analysis, on how to make that happen. The
idea is to not force-feed one kind of product into all the
reformulated gasoline areas. The idea is that in the
reformulated gasoline areas where we need to meet the air
quality goals, that we provide some flexibility to the refining
industry on how they make their recipes to meet those
objectives, but also maintain the gains that we've made on
renewable fuels in the country, to capture what we've got, and
then grow it over a 10-year period, which will reduce the costs
substantially, and not prescribe how it be distributed, but
allow that to happen in a national averaging or annual
averaging-type program.
Senator Inhofe. I guess it was last year that the EPA's
Blue Ribbon Committee had a recommendation that addressed this,
and I will read a quote out of it.
It says, ``EPA and others should accelerate ongoing
research efforts into the inhalation and ingestion health
effects, air emission, transformation byproducts, and
environmental behavior of all oxygenates and other components
likely to increase in the absence of MTBE. This should include
research on ethanol, alkalates''--which you were talking
about--``and aromatics, as well as gasoline compositions
containing those components.''
Now, that was about a year ago, I guess, wasn't it, that
they----
Mr. Perciasepe. Last fall, I think last September. We knew
what they were going to recommend in the August timeframe, but
I think the report was published in September.
Senator Inhofe. Well, did the EPA conduct all of this
research before coming out with the mandate?
Mr. Perciasepe. First of all, we're not doing a rule or
unilaterally proposing a mandate. What we're suggesting is a
legislative framework to essentially replace the reformulated
gasoline framework that is in the existing Clean Air Act, and
still try to achieve all the objectives that were in the
legislative history.
Senator Inhofe. But that legislative timeline----
Mr. Perciasepe. That first of all will require legislation,
and then it will require analysis and rulemaking. Under Clean
Air Act, Section 211, EPA has been working with industry, and
we have a $15 million research program underway looking at
inhalation and other paths of exposure for conventional
gasoline and gasoline with MTBE, ethanol, and other oxygenates.
So we have a process underway now with the refining industry,
using authority that requires them to do that analysis. We
don't have that in our budget.
Senator Inhofe. Well, you say you have a legislative
framework. These have timelines on them. My concern is that
within this framework, you're going to have the resources
recommended by the Blue Ribbon Committee, and I want to make
sure that the research is in and the results are in prior to
the time that anything is mandated.
Senator Voinovich, what we're talking about is the recent
mandate that came to take out MTBEs and replace them--I think
with ethanol, although he's talking about other substances,
too.
When the Blue Ribbon Committee had suggested they do
extensive research on this, it seems to me--and it still seems
to me--that we have the cart before the horse on this.
Senator Voinovich, did you want to make an opening
statement or anything, or just join in the questions here?
Senator Voinovich. Well, I would like to make an opening
statement.
Senator Inhofe. You are recognized.
OPENING STATEMENT OF HON. GEORGE V. VOINOVICH,
U.S. SENATOR FROM THE STATE OF OHIO
Senator Voinovich. I would like to communicate a few things
to the Department.
First of all, I want to thank you, Mr. Chairman, for
conducting this hearing. As you know, the EPA is requesting an
$832.8 million air program, which is a 39 percent increase over
fiscal year 2000. We face limited budgets at all levels of
Government and it is important that we use our limited
resources wisely. As I mentioned to Administrator Browner, who
was here last month, I am concerned that the Administration is
proposing new initiatives while some of our environmental needs
are currently going unmet. As we consider the last budget of
this Administration, I am concerned that instead of building on
their previous initiatives and giving priority to unmet needs,
the Administration is proposing new initiatives, such as the
Clean Air Partnership Fund.
This Administration, in my opinion, should not be proposing
new initiatives that it is not going to be around to implement.
Instead, it should be thinking about consolidation and putting
money into existing programs. For example, it appears that EPA
has a lot of work to do to meet its statutory requirement to
complete maximum achievable control technology standards to
reduce hazardous air pollutants. If these standards are not
completed on time, it is up to the States to do it.
When I was Mayor and Governor, in my last year we
concentrated on finishing what we started rather than beginning
new initiatives to pass on to the next Administration. I
strongly believe that our challenge in the new millennium is to
work harder and smarter and do more with less. We need to
prioritize so that we spend our resources in a way that best
protects the environment and the health of our citizens.
I note that once again EPA has asked for an increase in
funding for particulate matter research to advance the
scientific understanding of the health effects of particulate
matter. EPA is requesting $65 million, an increase of $3
million over fiscal year 2000, $9 million over fiscal year
1999, and EPA has received $118 million over the last 2 years
to study particulate matter.
I am not opposed to this research. I think it's terrific.
But the thing that bothers me--and maybe it gets back to the
point that the Chairman was making--and that is that this
research work should have been done before we went forward with
the proposed regulations in terms of particulate matter.
Because of the fact that the research work wasn't done,
lawsuits were filed; a Federal Court of Appeals has ruled that
even though the Environmental Protection Agency had the right
to do this, they didn't have the scientific backup for it, and
we can't continue to do things like this.
That's why Senator Breaux and I are going to be introducing
a bill in the next few days that is going to require the EPA to
conduct risk assessment and cost-benefit analysis when
promulgating new rules under the Clean Air Act. The bill
includes the same risk assessment and cost-benefits that we put
into the Safe Drinking Water Act, which was passed in 1996 or
1997 and was signed by the President with a great deal of
enthusiasm. Under our bill, EPA would be required to conduct an
analysis of risk, cost, and benefits of alternative standards,
while providing the Agency with flexibility in making the final
regulatory decision. It's a common-sense approach that I think
says, ``If it's good enough to protect the water we drink, then
it should be good enough to protect the air we breathe.''
It will also help us avoid some of the legal and
legislative wrangling that has occurred with respect to how we
achieve clean air. There is no question that we have to do more
science and research and cost-benefit and risk assessment to
make sure that when we are doing things, they can be justified;
and not just because some wind is blowing across the Agency.
Last but not least, Mr. Perciasepe, I worked very hard to
bring my State into attainment on the current air standards.
There was one area of the State, prior to my leaving, that had
achieved it but hadn't been designated, and that was the
Cincinnati area. Now, it's been almost 3 years or 4 years since
that issue has been resolved. I understand that now everything
has been met; now they have extended the comment period again.
I just want you to know that the businesspeople in that
community, who have been very responsible in bringing it into
attainment, are very upset about this. It is hurting them from
an economic point of view because they haven't reached the
attainment of the current standards, and I'd like your Agency
to get on with it, get it over with, and get them their
designation of attainment.
Thank you, Mr. Chairman.
[The prepared statement of Senator Voinovich follows:]
Statement of Hon. George V. Voinovich, U.S. Senator from the State of
Ohio
Mr. Chairman, thank you for conducting this hearing today on the
Administration's FY 2001 budget for EPA's air programs and the Army
Corps of Engineers' wetlands programs.
Overall, EPA is requesting $832.8 million for air programs a 39
percent increase from FY 2000. We face limited budgets at all levels of
government and it is important that we use our limited resources
wisely.
As I mentioned when Administrator Browner was here last month, I am
concerned that the Administration is proposing new initiatives when
some of our current environmental needs are going unmet. As we consider
the last budget of this Administration, I am concerned that instead of
building on their previous initiatives and giving priority to unmet
needs, the Administration is proposing new initiatives such as the
Clean Air Partnership Fund.
This Administration should not be proposing new initiatives that it
is not going to be around to implement. Instead it should be thinking
about consolidation and putting money into existing programs. For
example, it appears that EPA has a lot of work to do to meet its
statutory requirement to complete Maximum Achievable Control Technology
(MACT) standards to reduce hazardous air pollutants. If these standards
are not complete on time, it is up to the states to do it. When I was
Mayor and Governor, in my last year we concentrated on finishing what
we had started rather than beginning new initiatives to pass on to the
next Administration.
I strongly believe our challenge in the new millennium is to work
harder and smarter and do more with less. We need to prioritize so we
spend our resources in a way that best protects the environment and the
health of our citizens.
I noted that once again EPA has asked for an increase in funding
for particulate matter research to "advance the scientific
understanding of the health effects of particulate matter." EPA is
requesting $65 million an increase of $3 million over FY 2000 and $9
million over FY 1999. EPA has received $118 million over the last two
years to study particulate matter.
I am not opposed to research funding. In fact, I believe it is
essential in order to make judgments based on sound scientific
evidence. What does concern me is moving forward with regulatory
decisions before the science is available to back it up. It's no secret
that I have concerns that EPA moved ahead with the PM2.5
standards without fully knowing the health effects of PM2.5.
Last year, a federal appeals court remanded the new ozone and
particulate matter standards, saying that EPA needed to justify why
those levels were set. The court did not say that EPA couldn't set the
standards at those levels, but they asked for further explanation of
how those standards were chosen.
I may sound like a broken record when I say this, but it warrants
being stated again: environmental regulations need to be based on sound
science. These decisions should clearly take risks and costs into
account to ensure that we are targeting our limited resources on real
risk. EPA can't keep coming back to Congress and asking for more and
more money without telling us and the American taxpayers that the money
being spent is going toward the real problems that exist. We need to
know the science that goes into a rule BEFORE a rule is finalized.
That is why Senator Breaux and I will introduce a bill in the next
few days that will require EPA to conduct risk assessment and cost-
benefit analysis when promulgating new rules under the Clean Air Act.
The Voinovich-Breaux bill includes the same risk assessment and
cost-benefit analysis provisions that are in the Safe Drinking Water
Act, which passed with broad bipartisan support and was signed into law
by this Administration. In fact, I was pleased to attend the
President's bill-signing ceremony along with Administrator Browner and
environmental groups when these reforms were signed into law. This
cooperative effort on drinking water is notable because it showed that
a law could include commonsense reforms that make government more
accountable based on public awareness of risks, costs and benefits. I
believe it set a key precedent for reform of environmental regulations.
Under our bill, EPA would be required to conduct an analysis of
risks, costs and benefits of alternative standards, while providing the
Agency with flexibility in making final regulatory decisions. This bill
is a commonsense approach that merely addresses the obvious: if it's
good enough to protect the water we drink, then it should be good
enough to protect the air that we breathe. It will also help us avoid
some of the legal and legislative wrangling that has occurred with
respect to how we achieve clean air.
And while you are here Mr. Perciasepe, I want to reiterate my hope
that EPA will act quickly to redesignate Cincinnati as in attainment of
the 1-hour standard. The Greater Cincinnati community has worked
together, through a variety of coordinated programs, to improve the
quality of Ohio's air. Cincinnati has demonstrated attainment for four
consecutive years and has met all relevant criteria for redesignation.
The Greater Cincinnati Chamber of Commerce tells me that businesses
have asked them whether Cincinnati is in attainment, and when they've
said no, Cincinnati has been crossed off the list as a potential place
to locate. This is unjustly hurting Cincinnati's opportunity for
economic growth, when Cincinnati is indeed meeting the standard. Any
delays in finalizing this rule will only serve to exacerbate the
problem.
I realize that EPA has extended the comment period on the proposed
redesignation rule, but I want you to know that I'm continuing to watch
this and I hope it will be resolved expeditiously. While litigation
continues on the 8-hour ozone standard, this should have no bearing on
the merits of whether Cincinnati has attained the current 1-hour
standard.
Thank you Mr. Chairman. I look forward to today's hearing.
Senator Inhofe. Thank you, Senator Voinovich. The things
that you brought up are what I've been talking about for the
last 20 minutes, prior to your getting here, and I am very much
concerned.
We have been joined by Senator Smith, the Chairman of the
parent committee.
Is there any opening statement you would like to make,
Senator Smith?
OPENING STATEMENT OF HON. BOB SMITH,
U.S. SENATOR FROM THE STATE OF NEW HAMPSHIRE
Senator Smith. Thank you, Mr. Chairman. Thank you also for
your leadership in holding the hearing this morning on the
Clean Air Act budget.
The full committee began the budget process last month at a
hearing with Administrator Browner on the overall budget
proposal for the year 2001, and at that time I requested that
each subcommittee chairman followup with some detailed
oversight in each of the areas. This is helpful, and I commend
you, Mr. Chairman, for doing that.
I think this will be helpful in providing information that
we need to make informed decisions about the funding of the
EPA. As you know, other programs--including another one that
you and I serve on, Mr. Chairman, the Armed Services
Committee--has to submit its budget to us for review, and I
think EPA should do likewise. I think it's better than using
the ``rifle bore'' approach on each individual piece of
legislation that comes at us.
But I am especially interested in the Army Corps of
Engineers budget because since the last hearing on the Corps
budget, they released a major final rule which modifies the
nationwide permits for wetlands. The rule replaces Nationwide
Permit No. 26, which covered development in headwaters and
isolated wetlands, and the new nationwide permit rule expands
the Federal permitting process for construction and development
in wetlands and floodplains.
There is disagreement about whether changes to the rule
were needed, but I think we all agree that the new rule will
increase the number of individual permit applications, and thus
increase the workload of the Corps. It is that workload
increase that we're concerned about. The Corps has an
obligation to process those permits, which properly protect the
environment, expeditiously so as not to hold up other
beneficial projects.
[The prepared statement of Senator Smith follows:]
Statement of Hon. Bob Smith, U.S. Senator from the State of New
Hampshire
Good Morning. I would like to thank Senator Inhofe for his
leadership in holding this hearing today on EPA's proposed budget for
Clean Air Act programs. I am pleased to participate in the
subcommittees hearings to take an even closer look at specific programs
of the respective budgets.
The full committee began the budget oversight process last month at
a hearing with Administrator Browner on EPA's overall budget proposal
for fiscal year 2001. I asked each of the subcommittee chairmen to
follow up with detailed oversight hearings on each of the Agency's
specific programs. I commend Senator Inhofe for doing that today. I
think that his hearing will be very helpful in providing the
information that we need as the authorizing Committee to make informed
decisions about funding for EPA.
I am especially interested in the Army Corps of Engineer's budget
because since the last hearing on the Corps budget, they released a
major final rule which modifies nationwide permits for wetlands.
My interest is driven by the great ecological benefit wetlands play
in the State of New Hampshire. We have a vast amount and wide variety
of wetlands. These range from tidal marshes, mud flats, freshwater
swamps, bogs and wet meadows. These wetlands serve an important role in
filtering pollutants, providing wildlife habitat, and helping with
flood control.
The State of New Hampshire first recognized wetlands as a valuable
resource in 1967 when it began to regulate coastal wetlands. The State
has amended the law to allow more streamlined permitting while still
protecting the environment. I am concerned about the impact that the
Corps' new rule will have on New Hampshire's wetlands and its
successful program.
The Army Corps of Engineers released its final rule to modify the
nationwide permits on March 9, 2000. The rule replaces the Nationwide
Permit 26 which covered development in headwaters and isolated
wetlands. The new nationwide permit rule expands the federal permitting
process for construction and development in wetlands and flood plains.
There is disagreement about whether changes to the rule were needed,
but I think all agree that the new rule will greatly increase the
number of individual permit applications and thus increase the Corps
workload.
It is that workload increase that is so important to me. The Corps
has an obligation to process those permits which properly protect the
environment expeditiously so not to hold up beneficial projects because
of a lack of staff or resources.
I look forward to hearing the testimony and response to questions
on what the estimated costs and resource demands this rule will place
on the Corps districts and division commanders. Thank you.
Senator Inhofe. Thank you, Mr. Chairman.
Senator Voinovich, why don't we start with your questions?
I have already had a number of questions.
I would, Mr. Perciasepe, like to know when the studies that
we have been talking about will be completed, so maybe during
the course of these questions you can bring that out.
Mr. Perciasepe. I can tell you before that, I don't have
the detail on all those studies of that $15 million research
program that we have underway now with industry under Clean Air
Act, Section 211. I will provide it right away; I won't even
wait for your letter. We will try to get the information to
you.
[Information to be supplied follows:]
Senator Inhofe. Senator Voinovich?
Senator Voinovich. I want to comment on a GAO study, Mr.
Perciasepe, that was conducted that reviewed the fiscal year
2000 performance plan of the EPA, and that GAO review indicated
that ``little improvement in providing details on goals and
strategies that cut across Agency lines''--and I think that
``strategies'' is the key word. Last Friday, Senator Thompson
had a hearing in Governmental Affairs about rising oil prices,
and your Agency is working or has finalized a number of
regulations that affect our energy in this country: new source
review standards, the Tier II low sulfur gasoline, diesel fuel
standards, the NOx SIP call, ozone and particulate matter--I
don't whether MTBE is involved in that also--but basically what
the GAO report said is that the EPA has not coordinated their
programs with other agencies that have a role to play in the
area in which they are working.
The question I have is, how much coordination is going on
between the EPA and the Department of Energy, and the
Department of Defense? Defense is concerned that we are
becoming too reliant on foreign oil, so we have a national
concern there. Commerce, I am sure, is interested in the impact
it is having on commerce.
It appears so often that the left hand doesn't know what
the right hand is doing. We have another situation that the
Chairman of this committee and I are familiar with; we have a
proposal that will be coming up here one of these days in terms
of the Florida Everglades. The EPA is very much involved in
that. At the same time, there is a massive controversy brewing
in Florida over the use of Homestead Air Force Base in terms of
whether it's going to become a big regional facility and what
impact that is going to have on Florida and on the Everglades.
You just wonder to yourself, does anybody ever sit down
from these agencies in the same room and start to talk about
some of these problems to determine how they can reconcile some
of the competing differences, to come up with some policies
that make sense?
I would like you to comment on that. It just seems that
each agency is doing their own thing.
Conformity is another one. Same problem with that.
So I would like your reaction to that. How often do you get
together and talk about some of these things?
Mr. Perciasepe. Thank you, Senator.
The interagency process that we go through on all of these
rulemakings is fairly significant. On the sulfur in gasoline
rule that was on your list, we spent an extensive amount of
time with the Department of Energy and the Department of
Defense, particularly in part due to the Chairman's request to
look at the effect on, for instance, aviation fuel that would
be available for the Defense Department.
So I had a very specific process with the Defense
Department on that rule in terms of the availability of those
types of fuels. We had a technical expert at the Department of
Energy help us design the flexible mechanisms in the Tier II
low sulfur gasoline rule. In fact, during the regular comment
period they made some very tough comments on our rulemaking, at
which time I myself, personally, working with the Deputy
Secretary and others in the Department, worked on a process to
reconcile those differences that we had, and came out with a
final rule that the Department of Energy was supportive of and
comfortable with.
So we meet with them in advance of a rulemaking process and
we let them comment, and we work out our differences, because
in the final analysis we have to get all of our actions,
whether they be EPA or Department of Transportation or others,
through an interagency review process that ultimately takes
place in the Office of Management and Budget.
But we try not to just rely on that as a failsafe. We try
to spend a lot of time with other agencies because they have
technical expertise that will augment the work that we're
doing.
So the answer is, ``Yes, we spend quite a bit of time with
them.'' I could go on about the conformity and the time I spend
with Ken Wykle of at the Federal Highway Administration, but
I'll stop there.
Senator Voinovich. The thing I would like is this: We've
got the GAO report. What is the Agency's reaction to that GAO
report.
Mr. Perciasepe. I have to say I'm not 100 percent familiar
with that, particularly with relation to these air programs,
but I can tell you from my own personal experience that what I
spend a significant amount of my time doing coordinating with
other agencies.
Senator Inhofe. Senator Smith?
Senator Smith. Thank you, Mr. Chairman. I missed your
questions; I hope I'm not repeating something here.
Mr. Davis, on the 20 percent increase in individual permit
applications, how does this translate into your workload at the
Corps?
Mr. Davis. First, Mr. Chairman, we're not certain that it's
actually going to be 20 percent. We have a pretty rough
estimate at this time. We're analyzing that. We do know that
the workload will increase; we'll have more individual permits
as a result of the actions we took on March 7th, the new
nationwide permits. So at the end of the day we are going to
have more individual permits; we know that.
But also, it is important to note that there are other
workload savings pieces of the overall package. It is very
important to look at this as a package. For some of the
nationwide permits that we modified, we actually expanded the
use of those permits. Utility crossings is one that is widely
used throughout this country when people put in gas lines and
power lines and other things. We broadened the applicability of
some of those permits.
Also, we are replacing Nationwide Permit No. 26, which was
limited in its use to headwater areas and isolated areas. The
new replacement permits do not have that restriction, so the
geographic coverage of the new permits is broader than what we
used to have under Nationwide Permit No. 26. So there is also
some workload savings, if you will. The preconstruction
notification process, where we coordinate with agencies, is
much more streamlined now under this proposal.
But you're right, at the end of the day there are going to
be more individual permits. Exactly how many, we're not
certain. It could be as many as 20 percent, and that's fairly
substantial, but we think that the environmental benefits that
we're getting from this, the increased protection of our
floodplains that we're getting from this, justify these
increases in workload.
Senator Smith. Does your budget cover all the costs?
Mr. Davis. Perhaps not. We're not certain at this point.
Again, it's going to take some time to implement this program,
see exactly how it works out in the real world. For example, we
have gradually ratcheted down Nationwide Permit No. 26 from
1977 through the mid-1980's, when we changed it. In 1977 there
was no acreage limit on Nationwide Permit No. 26. You could
have literally filled 40 or 50 acres of isolated water under
Nationwide Permit No. 26. In 1985, we changed that to 10 acres.
In 1986 we changed it to 3 acres. Each time we've done that,
we've seen developers--who are very sophisticated and very good
at what they do--design their projects around these acreage
thresholds. We think to a large extent that that will continue
to happen, but those things are hard to predict precisely, so
we don't know.
We have about $5 million proposed in the President's $125
million request for the regulatory program that will go toward
some of these increases in workload.
Senator Smith. So you say perhaps, or not. And the private
sector picks it up if you don't.
Mr. Davis. Right--well, I don't think the private sector
will pick it up. I think that we'll be able to make some
adjustments within our program. We have some flexibility. If
things----
Senator Smith. Well, what will be the increased cost to the
private sector under the rule?
Mr. Davis. We have some rough and preliminary estimates
from a report that was done by the Institute for Water
Resources that indicates that it is about $32 million.
Senator Smith. One other point that I want to make. The
processing time on these individual permits versus the general
permitting, how much is that going to be increased? Can you
handle the delay? That's my point.
Mr. Davis. I think the current average time is about 107
days for the individual permits. It will probably go up a
little bit, but our thoughts were that if it goes up to 120
days or 130 days, again, we think that's justified based on the
environmental benefits that we're getting, and perhaps most
importantly, the floodplain benefits that we're getting here.
One of our big policy objectives here was to discourage
development in the floodplains. Every year this country pays
about $4 billion to $5 billion for flood damages because of
development in the hundred-year floodplain. We believe that it
is not appropriate to allow things to occur in the floodplain
without some additional review that is afforded by the
individual permit process.
Senator Smith. Well, with all of these new individual
permits, have you looked at the economic impact on State and
local facilities--for example, water management districts,
transportation agencies, and so forth--in terms of the economic
effects on these agencies with these new rules?
Mr. Davis. We haven't specifically targeted any of those
agencies. We have generally thought about the economic impacts,
and we think nationally that they're acceptable and that we
will be able to continue to make adjustments in the program. If
there are unintended consequences in one particular sector, if
the public is unfairly harmed by this, and we can make some
adjustments without diminishing our environmental objectives,
then we will do that. And we have some flexibility, I think, to
do that.
Senator Inhofe. Let me followup on that.
Mr. Davis, you said on March 6th of this year that the
Corps would need an additional $6 million to implement the new
nationwide regulations, isn't that correct?
Mr. Davis. The preliminary analyses that we have from the
Institute for Water Resources report suggest, based on their
assumptions, that it would take about $6 million. But let me--
--
Senator Inhofe. Let me follow through with this, because I
want to get to this chart over here.
The President's budget has $8 million. However, $5 million
of the $8 million is not on that chart; that's something else--
$5 million of the $8 million is for cost of living increases.
This is according to our interpretation of your budget. That
leaves $3 million. According to the budget information, for
further development--$3 million is supposed to be for further
development of watershed management plans, special area
management plans such as watersheds in Orange County, South
Florida, etc., and it doesn't sound like--if you take that $3
million out, what is left toward the budget you've created by
the nationwide permit changes? The math ends up zero. What am I
overlooking here?
Mr. Davis. The $5 million that we talk about--there is an
$8 million increase proposed, you're absolutely right, from
$117 million to $125 million. Of that, $5 million we are
proposing to put toward maintaining the current level of
performance and some additional increases in workload. We
anticipated when we put the budget together that there would be
some continued increases in workload, and part of that $5
million will go toward that. We would have some flexibility, I
think, if the workload exceeded our estimates, that we could
use some of that $3 million that we have programmed for other
things, as well. We do have flexibility within the regulatory
account to move things around--for example, from our
enforcement account to our permit evaluation account--to pick
up some of this if we had to.
I am not certain that we're going to have to do this yet. I
think we need to see how this plays out, and then make some
adjustments once we have some information.
Senator Inhofe. How much is the cost of living increase in
your budget?
Mr. Davis. It's probably about $2 million to $3 million,
I'm guessing.
Senator Inhofe. OK. That's not the figure that I have.
Let's go to this chart up here. At our last wetlands
hearing 3 years ago, we asked you to start keeping track of the
length of time it takes for the Corps to review and act on an
individual permit. I know you kept track on the periods between
the time of application--why don't you go up there and point to
this--the time of application is deemed complete, and the time
it is approved. But the period of time--that's 127 days--the
period of time that I'm concerned about is the period from
which it is submitted to the time it is approved.
Now, we had asked for that information. Do you have that
information for us?
Mr. Davis. Mr. Chairman, I don't believe we have that
information.
Senator Inhofe. All right. That's a good, honest answer.
Let's get it.
One last question, Mr. Perciasepe. I understand that you
have requested 19 new employees to work on global climate
issues. Does this mean that the Administration is going to be
sending the Kyoto Treaty to the Senate before the next fiscal
year?
Mr. Perciasepe. No.
Senator Inhofe. What are these guys going to be doing?
Mr. Perciasepe. Remember, those are for next year, not this
year.
Senator Inhofe. All right, are they going to be submitting
the treaty to the Senate next year?
Mr. Perciasepe. Maybe President Gore will, but----
[Laughter.]
Senator Inhofe. What are they needed for? What are they
going to be doing?
Mr. Perciasepe. We have a voluntary program that we've been
running at about a little over $100 million a year. We've
requested every year an increase to that because of the return
on investment that I mentioned earlier, and the potential for
energy savings and pollution reduction.
We have asked for that increase again, which is the
majority of the increase in the budget that Senator Voinovich
mentioned earlier in his opening comments, and there were
additional FTE related to that. We also have been doing a
reorganization in the Agency to get the climate change programs
together in one location so that we don't have different things
going on at different times and that we can coordinate them.
Senator Inhofe. Well, it seems to me--and there are a lot
of accusations around--that the Administration, through
Executive Orders, through anything other than a legitimate
path, is going to implement as much of the Kyoto Treaty as they
can. I think this is something that we all believe they are
attempting to do. As you well know, there's not a chance in the
world that that treaty would be ratified. We even passed a
resolution--I believe it passed without any dissenting votes;
there may have been one--that said that unless you come back
with something where the developing nations and the developed
nations are treated equally, then we're not going to ratify it.
So it's not going to be ratified, and it seems to me that
you're beefing up to see what all can be done without our
ratification of the treaty.
You know, we have this conference of parties that we go to;
once you sign the treaty, you can still go to the conference of
parties. And yet never once on the agenda, last fall or this
coming fall on the proposed agenda, is the discussion of
developing nations on the agenda.
So for the record I would like to have you tell me in as
much detail as you can on these 19 new employees, specifically
what they are going to do.
Mr. Perciasepe. Certainly, and we can do that for the
record. I can lay out what they are going to work on.
[Information to be supplied follows:]
EPA's strategy to help achieve these additional
environmental and economic benefits is to expand its existing
programs where additional benefits can be achieved cost
effectively to businesses and consumers and to launch new
initiatives targeted at areas of opportunity that EPA has not
addressed. With additional FTE, EPA will pursue new goals
through 2010, beginning by expanding in key areas.
The Buildings Sector represents one of EPA's largest areas
of potential, and at the same time is one of its most
successful. In the buildings sector, EPA will expand upon the
successful Energy Star partnerships (including ENERGY STAR
Labeling and the ENERGY STAR Buildings Program). EPA will work
toward the goal of offsetting about 35 percent of the growth in
greenhouse gas emissions above 1990 levels that is expected to
occur between 1990 and 2010 in this sector through promoting
energy efficiency and enhancing the use of clean energy
sources.
The Transportation Sector (cars, trucks, aircraft, marine)
accounts for almost one third of the U.S. carbon dioxide
emissions and represents one of the fastest growing sectors for
greenhouse gas emissions. In the transportation area, EPA will
accelerate its part in the Partnership for a New Generation of
Vehicles and expand efforts to promote strategies to reduce
vehicle miles traveled (VMT).
In the Industry Sector, EPA will expand its existing
partnerships with the goals of: (1) doubling the rate of energy
and resource efficiency improvements in industry between now
and 2010 (working with DOE), (2) cost-effectively returning
emissions of methane to 1990 levels or below by 2010, and (3)
cost-effectively limiting emissions of the more potent
greenhouse gases (HFCs, PFCs, SF6).
Mr. Perciasepe. Let me say, and I said this at my
confirmation hearing before you and I'll say it now again, we
are not implementing the Kyoto Treaty; we will not do that
until it is submitted to the Senate and ratified by the Senate.
We do take seriously the charge of that resolution you
mentioned: getting meaningful participation of the developing
nations. We have efforts underway to provide ideas and
technical assistance and to work with developing nations in a
bilateral and multilateral way through the State Department.
EPA does provide technical assistance in many of those. But
those are not designed to implement the treaty. They are
designed to develop and cultivate the exact eventuality that
the Senate is looking for, and that is developing the capacity
in those parts of the world for the implementation of something
like the Protocol.
We also participate in discussions of how this would be
implemented, so that when we do present it to the Senate, we
can give you a reasonable amount of information as to what the
consequences are and how it will be implemented in terms of the
mechanics and the mechanisms. We are trying to protect the
country's interests in terms of how anybody would design on an
international scale the implementing mechanisms that we can
then bring to you and be able to explain it to you and have a
good discussion about it at that time.
So we are not developing any domestic implementation
mechanisms that are related to the Kyoto Treaty, and I wanted
to make sure that you understand that.
Senator Inhofe. Senator Voinovich?
Senator Voinovich. This is for you, Mr. Davis, and I'm
sorry that I wasn't here to hear your testimony.
Are you familiar with the fact that the National
Association of Counties had a study done by the University of
California?
Mr. Davis. Yes, sir.
Senator Voinovich. And a couple of things that I'd like you
to comment about. One is that in that study it said that in a
typical year, about 3,400 acres of wetlands are impacted by the
nationwide permit, and that in order to mitigate the impacts on
wetlands, that over 13,000 acres of mitigation occurred; that
is, you are impacting on 3,400 acres, and in order to
compensate for that they have required some 13,000 acres of new
wetlands to compensate for that.
And you alluded to this a little bit in answering one of
the questions here. The first question is, what's broken with
the system now? I mean, those seem to be pretty good numbers,
unless the wetlands being taken were of such significance that
you really had to quadruple the number of acres to compensate
for the loss of those. That's one thing.
The other is the studies indicating that--this gets back to
Senator Inhofe's comments--you're talking about $6 million per
year in order to implement the new system; they claim it will
be $20 million to the Agency to take care of it. The Agency
says that it will be approximately $20 million a year in
increased costs to the regulated community; the study comes
back and says that it's going to be $300 million, which is a
pretty large number and very different from the one that you've
talked about.
Could you shed some light on that study in regard to your
opinion about its validity?
Mr. Davis. Yes, sir. I'm glad you asked the question. I
think it's a very good question.
First of all, we do not agree with the NACO report. They
picked 98 projects out of a universe of hundreds of thousands
of projects, picked them out and focused on 98 projects
versus--in our view, we looked at all the data in the entire
data base for all the regulatory actions. So it was a complete
evaluation of everything that is in the data base, hundreds of
thousands of things, versus picking 98 very large developments.
Something is broken, though, and I think perhaps a way to
articulate what's broken is to look at the problem that Doris
Wilson has up in Louisville, Kentucky. Doris Wilson lived in
her house for 20 years, and there was a little wetland, a
little less than three acres, in her neighborhood, and it was
doing a pretty effective job of keeping her neighborhood and
her home from being flooded.
A developer came in under a nationwide permit, filled in
that three acres, and almost immediately Doris Wilson's home
was flooded. I think that's a good example that we've seen
around the country of what was broken.
Also, I think it is important in regard to NACO. I had the
opportunity about 2 weeks ago to have about 25 or 30 NACO
community representatives--not Washington types like us--come
in to me. I actually thought they were coming in to me to give
me a hard time about the nationwide permits. Like a lot of
things on my calendar, I don't know exactly what the subject is
until right before the meeting. But in this case, the came in,
and what they were doing is coming in to congratulate us for
having the courage in doing what we're doing. These were people
who had communities that had been flooded; and frankly, they
were pretty appalled at what NACO did with their report. That
report was not sanctioned by much of the membership of NACO; it
was done by a relatively small committee within NACO, and it
certainly didn't reflect widely the feelings of NACO members.
Again, I heard these 20 or 25 community representatives--county
commissioners and mayors--come to me and say, ``This is
important. We ought to discourage development in the
floodplain. We think this is good public policy.''
Senator Voinovich. Well, that may be an anecdotal
situation. The issue is, what's your response to the fact that
where they have had wetlands used, that they have quadrupled
the number of acres to create additional wetlands?
Mr. Davis. Again, that was looking at that very small
subset. I don't know--I'm not in a position to question the
numbers that you gave, of this essentially 3-1 or 4-1 ratio.
Typically, the ratio is about 2-1. For every acre that is
impacted, there is about 1.5 to 2 acres offset somewhere else.
I'm not sure how they got the 4-to-1, but again, I suspect it's
because of the 98 or so projects that they kind of hand-picked
and looked at, and it's possible that they could have had that
ratio there.
I think the bigger question is, does it really work? Is
this compensation working? What you have is a pure acreage
analysis here, and not a real functional assessment about
whether or not you are replicating or replacing the functions
that have been lost to that development--the flood attenuation
functions, the water quality functions, the habitat functions.
We know in many cases that you don't get these things back,
particularly when you're using creation and enhancement.
Sometimes it simply doesn't work.
Senator Voinovich. It was pointed out to me that this study
that they did, which was May 1997 through 1998--I'm sorry--the
Corps authorized 8,790 activities under the Nationwide Permit
No. 26, about 7,500 a year, which impacted 3,000-some acres of
wetlands. So this indicates that it's more than what you think
it is.
You are saying to me also today that this study that was
done by NACO is not supported by its membership, that it's not
the official position of NACO in regard to this new permitting
process?
Mr. Davis. I'm not certain if it's the official position of
NACO. What I was suggesting, Senator, is that I know there is a
substantial part of the membership of NACO who came to me and
were surprised that that report was released. It was released
by the relatively small committee that did it without vetting
throughout the membership of NACO. And these 25 or 30 NACO
representatives--again, community leaders, mayors, councilmen,
others--felt that what we were doing was very important. This
was a very geographically diverse group.
Senator Voinovich. I will look into that.
I still would like from you, No. 1, an explanation of why
the current system is broken and not working and why you need
the new permit system, OK? I am genuinely interested in that.
And second of all, I would like to know your evaluation of
the study's impact in terms of costs. Are you representing that
this would be just another additional $20 million as a result
of these new permits?
Mr. Davis. No. I think the preliminary indications that we
have are that it's actually about a $32 million cost to the
public. I believe NACO was saying that it was $300 million, and
we're saying about $32 million, based on the assumption----
Senator Voinovich. And they're also saying, in terms of
your own budget, in order to give you the capacity to make sure
that the numbers aren't 2 years of permitting, you need to have
more people to handle it, and they claim that it would require
more staffing on your part. And again, I would like your input
on that.
Mr. Davis. I think it will require some more staffing--do
you want that now, or do you want something for the record?
Senator Voinovich. I'd like to have it for the record, if
you will.
Mr. Davis. Sure.
Senator Voinovich. If you have the answer now, fine.
Mr. Davis. Well, we do think it will increase our workload
some, and we anticipate that it will perhaps take some
additional funding, but we don't believe it's $34 million
additional funding for the Corps that NACO has represented in
their report.
There are really two basic reasons why we needed to make
the change that we made. You weren't here when I outlined the
basic legal requirements for general permits. There are three
basic requirements, but two of them are very important. One is
that general permits have to be for categories of activities,
and the second one is, no general permit can result in more
than minimal impacts, either individually or cumulatively.
We have been challenged on Nationwide Permit No. 26, and
quite frankly, we are probably not going to win that challenge,
because Nationwide Permit No. 26 was not a category of
activities permit. It didn't really comply with the plain words
of the law, quite frankly. So we had a real legal problem that
we were trying to avoid here, and I think we have fixed that.
But we also had an environmental problem. Nationwide Permit No.
26 was formulated in the 1970's, when we didn't understand the
importance of headwater systems, the importance of isolated
systems. We now know--it is verified by the National Academy of
Sciences in a 1995 report--that these systems are very, very
important and integral parts of the overall watershed.
So those are the two basic reasons why we made the change.
Senator Inhofe. I would say, Senator Voinovich, that we
talked about some of these estimates before, back when we had
the ambient air fight; it was actually before you were a Member
of this body. The EPA had anticipated it would cost $6 billion
a year, then the President's Board of Economic Advisors said it
would cost $60 billion a year, then the Research Foundation
said it would cost between $120 billion and $150 billion a
year. And I would remind you folks that when we're talking
about NACO, the one who did this report for NACO was from
President Clinton's Board of Advisors during that time.
Senator Smith, do you have any further questions?
Senator Smith. No further questions, Mr. Chairman??
Senator Inhofe. All right.
I am going to end on a positive note, Mr. Perciasepe. When
we had the new source review hearing in Ohio, during the
hearing I was pleased to hear that your stakeholder process has
been very good, and you had nothing but good comments from the
stakeholders at that hearing. I would like to ask you where you
are in that process, and do you anticipate working just as
aggressively with the stakeholders from this point forward as
you have in the past?
Mr. Perciasepe. Yes, we do. And I agree that the
stakeholder process has been very helpful in terms of
identifying improvements to the new source review program. On
the other hand, I sometimes think these stakeholders are
addicted to having these meetings.
But at any rate, they have been helpful. We are having some
more during the course of the month, and we're going to have to
be able to start to narrow some of the differences down to some
concrete proposals sometime between now and the summer, which I
plan to do. It's probably going to require some of my own
personal involvement with some of these discussions, as well.
Senator Inhofe. How do you structure those when you have
those meetings? Who is invited?
Mr. Perciasepe. There are a lot of different groups. We
have actually used the State air directors to help soundboard
some of the stakeholders as well, because the State air
directors are on the front line of having to implement a lot of
these programs. Their interactions on a more day-to-day basis
are often very helpful to looking at how the program should be
continued.
So we have used both our own staff to have these
discussions; we've met with individual stakeholder groups;
we've had a couple general sessions with all of them together,
one of which I participated in, looking at this broader idea of
a sector-based approach; and we've asked the State air
directors to do some meetings, as well, and provide us with
input.
We are getting to the point where we have to sort of ``fish
or cut bait'' on some of these discussions, so we will
undoubtedly be having more conversations about that as the year
goes on.
Senator Inhofe. Senator Voinovich, do you have any further
questions?
Senator Voinovich. No, I haven't.
Senator Inhofe. All right.
Well, thank you both, very much, for coming, and we have
asked a number of questions to answer for the record, and we
will be looking forward to getting those.
I would say, Mr. Davis, that we do want to get the answer
to what is asked on this chart up here. That timeframe between
the submission of the application to the Corps and the
application is deemed complete, we had asked for that 3 years
ago, so we'll expect that in our fall hearing, to have that, if
not before that, to get something for the record.
There will be other questions. The record will remain open.
There are other members who have questions whose staff is here
representing them today.
Senator Inhofe. We are adjourned.
[Whereupon, at 10:47 a.m., the subcommittee was adjourned,
to reconvene at the call of the Chair.]
[Additional statements submitted for the record follow:]
Statement of Robert Perciasepe, Assistant Administrator, Office of Air
and Radiation, U.S. Environmental Protection Agency
Senator Inhofe and members of the subcommittee, I am pleased to be
here today to present the accomplishments of our air and radiation
programs, describe the future outlook for those programs, and discuss
the Clinton-Gore Administration's fiscal year 2001 budget request for
these programs. I would also like to take this opportunity to thank you
and the Committee for working with us toward our collective goal of
protecting public health and the environment.
First, I will highlight the impressive health and environmental
results that the Clean Air Act is achieving as well as discuss the
solid progress we are making through our voluntary climate change and
indoor air programs.
In 1990, Congress passed the Clean Air Act Amendments with
overwhelming support, setting ambitious air pollution reduction goals.
Since then, we have achieved unprecedented success in cleaning our
nation's air and protecting public health. We have achieved these
successes through rulemakings, voluntary measures, market mechanisms,
state partnerships, and stakeholder negotiations.
In November 1999, EPA submitted a new Report to Congress which
estimates the benefits and costs of the 1990 Amendments. There are
significant uncertainties associated with any benefit-cost analysis of
clean air programs, requiring scores of methodological decisions and
assumptions. Many of the uncertainties involved in this study are the
subject of continuing discussion within the economic and policy
analysis communities and within the Administration. Reflecting many key
uncertainties, the new study estimates that the year 2010 Title I
through V benefits which can be expressed in dollar terms may range
from $240 billion more than costs to $1 billion less than costs.
However, the Primary Central estimate in the study shows net benefits
of $83 billion, indicating that the benefits of the 1990 Amendments
exceed the costs by 4 to 1. As President Clinton himself stated when it
was released: ``This report further demonstrates that public health and
environmental benefits can be achieved along with economic benefits and
this Administration will continue to work aggressively to protect the
air we breathe, the water we drink, and the land on which we live.''
From 1970 to 1997, U.S. Gross Domestic Product has grown by 114
percent, the U.S. population by 31 percent, and the number of miles
traveled by on-road vehicles (VMT) by 127 percent. Yet, the aggregate
emissions of criteria pollutants--ozone precursors, particulate matter,
carbon monoxide, sulfur dioxide and lead--are down 31 percent.
Emissions are down significantly for each of these pollutants except
for nitrogen oxides (NOx), which are up somewhat. Lead emissions have
been cut 98 percent. Most of these declines in emissions can be
attributed to implementation of the Clean Air Act.
A few prominent examples of Clean Air Act successes since 1990
include the following:
In the Acid Rain Program, electric utilities have cut
sulfur dioxide (SO2) emissions by 22 percent or 3.5 million
tons and have cut rainfall acidity in the East by up to 25 percent.
When Title IV is fully implemented in 2010, EPA's study projects that
SO2 and NOx reductions will provide substantial health
benefits (mostly from a reduction in annual cases of premature
mortality). Acid Rain control will also produce significant benefits in
terms of improved visibility, lowered surface water acidity, and less
damage to high elevation forests and materials.
The U.S. and other developed countries have phased out
production of many of the chemicals most harmful to the stratospheric
ozone layer, including CFCs. We have estimated that once completed, the
worldwide phaseout will prevent approximately 295 million skin cancers
in the U.S. through 2075.
We have issued air toxics rules, or MACT Standards, that
we believe will cut industrial air toxics by 1.5 million tons a year, 8
times the amount achieved in the previous 20 years.
The air in our cities is cleaner than it has been in a
long time. Nationally, average air quality levels have improved for all
five of six common pollutants subject to air quality standards. There
have been dramatic cuts in the number of areas violating these
standards.
Our cars and fuels are cleaner. The average new car is 40
percent cleaner (in terms of emissions) than in 1990; over 30 percent
of the nation's gasoline is now reformulated gasoline.
In December 1999, we set the tightest emissions standards
ever for cars, gasoline and the first standards that apply equally to
sport utility vehicles (SUVs) and minivans. The projected costs to meet
these standards, about $100 for cars, $200 for light-duty trucks, and
two cents per gallon of gas, are far outweighed by the projected public
health benefits. Estimated benefits include the long term yearly
avoidance of premature deaths, cases of bronchitis, and significant
numbers of hospital visits, lost work days, and multiple respiratory
ailments (especially affecting children).
Through EPA's voluntary climate change programs, the American
people have enjoyed a significant return on their investment. For every
dollar spent by EPA on its voluntary energy efficiency programs, the
private sector and consumers have invested more than $15 in new more
efficient technologies; businesses and consumers have saved over $70;
and greenhouse gases have been reduced by more than half a ton of
carbon equivalent.
As you can see, we have made impressive progress. Based on EPA's
findings in the November study, we believe that the health benefits
from reductions in ground-level ozone, particulate matter, and
associated pollutants (especially from reductions in SO2
emissions) achieved under the 1990 Clean Air Act Amendments will
continue to grow. For example, the study's Primary Central Estimate of
benefits for the year 2010 is:
23,000 fewer incidences of premature mortality,
20,000 fewer cases of chronic bronchitis and 47,000 cases
of acute bronchitis,
22,000 fewer respiratory related hospital admissions,
42,000 fewer cardiovascular hospital admissions, and 4,800 fewer
emergency room visits for asthma,
91,000 fewer incidence-days of shortness of breath and
1,700,000 fewer asthma attacks, and
4,100,000 fewer lost work days and 31,000,000 fewer days
with restricted activity due to air pollution-related illness.
With respect to climate change, if the EPA programs were funded at
the President's request, we can deliver sizeable additional benefits
across the U.S. By 2010, we estimate that we can realize:
an additional 335 million metric tons of carbon
equivalent of cumulative reductions in greenhouse gas emissions;
an additional $35 billion in energy savings to families
and businesses, and
an additional 850,000 tons of NOx emissions reductions.
To achieve these benefits, we must aggressively pursue our
programs. Will Rogers once said, ``Even if you're on the right track,
you'll get run over if you just sit there.'' To keep pace with
increasing VMTs, economic growth, etc., there's still more work that
needs to be done.
But before I move on to the discussion of the fiscal year 2001
Budget Request, I'd like to give you a few highlights of our agenda for
fiscal year 2000 which is already well under way.
We continue to work on attaining the existing air quality
standards, especially the 1-hour ozone standard. We are also laying the
groundwork for our new standards the 8-hour ozone standard, the
PM2.5 standard, and our regional haze program. We work with
the Office of Research and Development and others to reduce the
uncertainties associated with air pollution science.
We also intend to propose more stringent standards for large trucks
and buses. As we did with the recent rule for cars, SUVs, and minivans,
we will consider these vehicles in conjunction with their fuels as a
system. These standards could become effective in 2007.
While the Acid Rain Program has gotten off to a great start in
reducing SO2 and NOx emissions, Phase II of the Program only
began this year. It is essential that we maintain sufficient funding if
we are to realize the full emission reductions of 10 million tons in
SO2 and 2 million tons in NOx by 2010.
While industries have made great strides in reducing the large
quantities of toxic air pollutants, we still need to keep moving
forward with issuing MACT standards for the additional major sources.
We also are beginning the early stages of implementing the second phase
of the air toxics program, targeting specific problems for evaluation
such as elevated risks in urban areas, deposition of air toxics into
the Great Lakes, mercury emissions, and residual risks from already
controlled sources. We are also moving beyond stationary sources to
focus on potential increased controls for air toxics from mobile
sources. We expect to finalize a rule on mobile air toxics in December
2000.
In our radiation programs, we are finalizing environmental
radiation protection standards for the Yucca Mountain radioactive waste
disposal site in Nevada. In 1998, we certified that the Waste Isolation
Pilot Plant in New Mexico complies with EPA's safety standards for
radioactive waste. Radioactive waste is now being shipped to the WIPP.
In our indoor air programs, much of our effort is focused on the
government-wide asthma initiative to better educate and inform parents
and children about asthma. We specifically focus on indoor triggers of
asthma like environmental tobacco smoke.
We are actively carrying out the voluntary programs that are part
of the President's Climate Change Technology Initiative (CCTI). Along
with the CCTI programs which include EPA's contribution in the
Partnership for a New Generation of Vehicles (a multi-agency research
effort to produce highly fuel-efficient vehicles), we continue to
explore strategies that lead to both criteria pollutant reductions and
greenhouse gas reductions. We have learned that our voluntary programs
like Energy Star are successful in helping reduce both greenhouse gases
and conventional pollutants. And this can often work both ways--smart
measures to reduce SO2 or NOx can often reduce greenhouse
gases as a byproduct.
All this leads me into describing our request for fiscal year 2001.
The Office of Air and Radiation is requesting a total of $831 million.
Of that total, $308 million is for grants to states, tribes and
localities. $523 million is for the operating programs.
A highlight of our request is the Clean Air Partnership Fund. We
proposed the Fund for the first time last year and we still believe it
provides an innovative, yet common sense, approach for speeding
reductions in pollution. The President's Budget requests $85 million
for the Partnership Fund. The Fund will support demonstration projects
by cities, states and tribes that (1) control multiple air pollution
problems simultaneously; (2) leverage the original Federal funds; (3)
facilitate meaningful public involvement, and (4) provide examples that
can be replicated across the country. By stimulating innovative
technology and policies, the Clean Air Partnership Fund will help
communities provide clean, healthful air to local citizens.
To address global warming we are requesting $227 million. We are
proposing an increase of $124 million over the fiscal year 2000 enacted
budget for the third year of the Climate Change Technology Initiative.
Under this budget, EPA will expand its partnership efforts with
businesses, organizations, and consumers to achieve greenhouse gas
reductions by taking advantage of the many opportunities to reduce
pollution and energy bills by fostering energy efficient programs,
products, technologies, and cost-effective renewable energy. As a
result of work already under way, EPA efforts with fiscal year 2001
funding are projected to:
reduce greenhouse gas emissions annually by over 66
million metric tons of
carbon equivalent, offsetting about 20 percent of the
growth in greenhouse gas emissions above 1990 levels;
reduce other forms of pollution, including reducing NOx
emissions by about 170,000 tons;
reduce U.S. energy consumption from projected levels by
more than 70 billion kilowatt hours, providing $9 billion in energy
bill savings to consumers and businesses that use energy-efficient
products; and
contribute to developing a new generation of efficient
and low-polluting cars and trucks.
The opportunity to save on our nation's $500 billion annual energy
bill over the next decade while reducing air pollution is tremendous.
The opportunity to reduce greenhouse gas emissions is also large. We
currently expect that more than half of the nation's greenhouse gas
emissions in 2010 will come from equipment that will be purchased over
the next 10 years. We shouldn't forego this opportunity by not funding
expanded energy efficiency programs.
For air toxics, we are requesting $23 million, an increase of $6.6
million over fiscal year 2000 operating plan levels, to address the
final round of MACT standards by the May 2002 ``hammer date''--the date
by which states must determine controls for such sources if EPA has not
acted.
The request for the Montreal Protocol Fund totals $21 million, an
increase of $9 million over the fiscal year 2000 enacted level. The
funding to the Protocol is dedicated to paying our dues to the fund and
to reduce accumulated arrearage.
To strengthen our relationships with our state and tribal partners,
this budget provides $215 million in state and tribal grants to help
implement solutions to air pollution problems locally. Of these
resources, a $5 million increase will be targeted to regional planning
bodies to combat the problem of regional haze one of the most obvious
effects of air pollution. Additionally, $8 million is provided to our
state and tribal partners to design, implement, and maintain radon
programs.
In late February, Administrator Browner went before the Committee
on Environment and Public Works and talked about the Agency's budget as
a whole. One of the things she talked about was the magnitude of
special projects that Congress ``earmarked'' in EPA's budget. For our
office that amount totaled over $17 million. Without going into the
validity of each individual project, I believe that the earmarks do
direct money away from the Agency's core programs.
These are the highlights of our fiscal year 2001 request and of our
accomplishments since the passage of the Clean Air Act Amendments. By
providing our children, our sensitive populations, our native
populations and our community as a whole with cleaner air, both indoors
and outdoors and improved quality of life, this budget maintains the
Administration's dedication to the protection of public health and the
environment. It ensures that the Environmental Protection Agency will
continue the impressive progress of the past decade in cleaning our
nation's air.
I look forward to discussing with you now, or as the year
progresses, our budget request specifically or any of our policy
positions. Thank you.
______
Responses by Robert Perciasepe to Additional Questions from Senator
Inhofe
Question 1. Last year a U.S. appeals court remanded the 8-hour
ozone standards and the PM2.5 standard saying that EPA
needed to provide further justification for these standards. You are
seeking an appeal to the Supreme Court. In the meantime, is your Agency
putting together the analysis to justify these standards? If so, how
much is being requested specifically for that purpose? Please explain
in detail what steps will be taken. Will you be conducting further
scientific study? Will you conduct more modeling?
Response. EPA is waiting for the decision from the U.S. Supreme
Court before deciding how to address the issues remanded by the U.S.
Circuit Court of Appeals for the District of Columbia that were
presented on appeal to the Supreme Court. Thus, it is premature to say
whether any further modeling, analysis, or scientific study will be
considered by EPA in responding to any final remand that may come from
either court.
Notwithstanding the ongoing litigation of the 1997 PM and ozone
NAAQS, EPA is now engaged in the next periodic review of the PM
criteria and standards, evaluating new scientific information available
since the last review of the PM criteria, with a final decision planned
for July 2002. EPA also plans to initiate the next periodic review of
the ozone criteria and standards later this year, with a call for
scientific papers available since the last review of the ozone criteria
and the preparation of a development plan for the criteria and
standards review that will be submitted to the Clean Air Scientific
Advisory Committee for review.
Question 2. EPA has received $118 million over the last 2 years to
study PM2.5 and is seeking an additional $65 million. Please
detail the studies that have been conducted or are ongoing and what
conclusions have been made so far.
Response. The U.S. Congress, in the fiscal year 1998 appropriation,
directed the EPA to arrange for an independent study by the U.S.
National Academy of Sciences, National Research Council (NRC) to
develop priorities for a comprehensive PM research plan, develop a near
and long-term PM research program, and develop a plan to monitor
research progress over the next 5 years. Based on evaluation of the
state of the science, the identification of research needs, and an
inventory of current research activities, the NRC developed a set of
recommendations for PM research (Research Priorities for Airborne
Particulate Matter, Immediate Priorities and a Long-Range Research
Portfolio, issued in March 1998, and an update, Research Priorities for
Airborne Particulate Matter: Evaluating Research Progress and Updating
the Portfolio, issued in August 1999.). The EPA has moved aggressively
to develop and implement a PM research program that is focused on
addressing the research recommendations provided by the NRC.
PM research spending in fiscal year 2001, as with spending in
fiscal year 1998 through fiscal year 2000, will be well aligned with
the recommendations of the NRC Committee on Research Priorities for
Airborne Particulate Matter. This includes research characterizing
emissions sources; air quality model development and testing; human
exposure assessment; dosimetry; research aimed at understanding
characteristics of PM producing toxicity; toxicity effects of PM and
gaseous copollutants; research to identify susceptible subpopulations;
mechanisms of toxicity; analysis of measurement uncertainties; control
methods; and Air Quality Criteria Document development. The research is
being conducted both at EPA research laboratories and centers, and
through competitively awarded PM research centers and through the
investigator-initiated Science to Achieve Results (STAR) program.
The EPA research activities are fully described in the Particulate
Matter Research Activities (PMRA) web site, which is publicly available
at: http://www.PMRA.org. The EPA has worked with other Federal, State,
and international research agencies and the private sector to compile
relevant research activities into the PMRA web site. The site is user-
friendly and can be searched by NRC research topic, by organization, by
investigator, and by keywords. More than 350 projects are described in
this website, with more than 160 sponsored by the EPA.
Peer-reviewed research results are brought into the regulatory
decisionmaking process on a 5-year review cycle through development of
an Air Quality Criteria Document (AQCD). The AQCD compiles and
characterizes the research findings and draws conclusions as to the
interpretation of the data. An independent group of experts, the Clean
Air Scientific Advisory Committee (CASAC), reviews the criteria
document to ensure appropriate data interpretation. Development of the
next PM AQCD is underway, with initial drafts having been reviewed in
public workshops. The EPA anticipates CASAC review of the AQCD late in
calendar year 2000 or early in 2001, at which time conclusions on the
research results will be available.
Question 3. On March 3 a Federal appeals court upheld most aspects
of your NOx SIP call rule. While further appeals of this decision may
be filed, it is likely that your Agency will consider how to move
forward with implementation. The North American Electric Reliability
Council (NERC) and the East Central Area Reliability Council (ECAR)
recently released reports concluding that the May 2003 compliance
deadline poses a potential threat to reliability. Given the delay of
the implementation due to litigation and the time it will take states
to submit their SIPs and issue rules, is EPA willing to consider
extending the schedule to take into account state rulemaking needs and
to ensure electricity reliability?
Response. In response to a motion from industry, on August 30,
2000, the U.S. Court of Appeals for the D.C. Circuit extended the
deadline for compliance of the NOx SIP Call until May 2004. The Agency
has not yet decided whether to seek review of this decision. However,
EPA still believes that its analyses support the conclusion that
compliance by May 1, 2003 would not have threatened electric
reliability. Both the report by the North American Reliability Council
(NERC) and the East Central Area Reliability Council (ECAR)
acknowledged that the greatest concern regarding reliability occurs in
the summer months. Furthermore, both reports acknowledged that emission
controls in response to the NOx SIP Call would not be installed during
these summer months. Rather they would be installed during the spring
and fall when electrical demand is the least. Therefore, we believe
that the NOx SIP Call will neither cause nor exacerbate summertime
electric reliability problems.
In most scenarios analyzed by NERC, no reliability problems were
expected to occur. The scenarios where NERC and ECAR projected
reliability problems used a number of very conservative assumptions
regarding the installation of emission controls. For instance, they
assumed that far more controls would need to be installed than EPA
believes will be needed. They also assumed that the average time a unit
needs to be taken off-line is much greater than has been seen in
installations to date.
Finally, in response to concerns that have been raised regarding
electric reliability, EPA established a compliance supplement pool
which created an extra 200,000 allowances that could be used in the
first two years of the program if any units were not able to install
controls in a timely manner. EPA is confident that this would be
sufficient to address any possible reliability concerns. The compliance
supplement pool was not considered in either NERC's or ECAR's studies.
Question 4. The VA-HUD conference report on EPA's appropriations
for fiscal year 2000 noted the long-held EPA linkage between the SIP
call and the section 126 petition rule and stated:
While the conferees' primary concern is in ensuring that these
matters are soon resolved in the interest of air quality
enhancements for all states, the conferees encourage EPA to retain
the linkage and refrain from implementing the section 126
regulation until the NOx SIP call litigation is complete.
What action has EPA taken up to March 3 and what actions will EPA
take now to carry out this linkage meaningfully and to work with the
States representing both sides of the issue, including the court, if
necessary, to develop a fair and equitable plan to establish a new and
reasonable compliance deadline under the NOx SIP Call rule and the
Section 126 rule that does not punish the States who utilized the
judicial relief opportunities afforded by Congress in the Clean Air
Act, while also working to resolve these air quality issues as
contemplated by the Act equitably for the public good?
Response. Originally, in a final rule on the section 126 petitions
that was issued on April 30, 1999, EPA had established a mechanism for
granting the petitions that was linked to the NOx SIP call deadlines.
The EPA determined which petitions were technically approvable, but
deferred granting the petitions (which would trigger control
requirements and a 3-year compliance deadline) as long as States and
EPA stayed on track to meet the NOx SIP Call requirements. Although the
Clean Air Act (CAA) did not explicitly contemplate such a linkage, EPA
felt it was appropriate at that time because the NOx SIP Call had
explicit and expeditious deadlines for SIP submissions and emissions
reductions. Thus, EPA had a reasonable expectation that the emissions
reductions needed to mitigate the NOx transport would be achieved
through SIP revisions by the same date that the reductions would be
required under section 126, if the petitions were approved. Section 126
of the CAA gives downwind petitioning States the right to relief from
significant interstate transport of air pollution and requires that the
relief be provided no later than 3 years from the time that EPA
determines that the upwind sources are significantly contributing to
nonattainment problems in the petitioning States. In this case, EPA
ensured that under either the section 126 requirements or the NOx SIP
call emissions controls would be in place by May 1, 2003.
On May 25, 1999, in response to petitions by several States, the
U.S. Court of Appeals for the D.C. Circuit issued a stay of the NOx SIP
Call submission deadline. Because there was no longer a certain and
expeditious schedule for States to submit SIPs complying with the NOx
SIP Call, EPA no longer had a basis for deferring granting the
approvable section 126 petitions. The stay of the NOx SIP call did not
provide a basis for depriving the petitioning States of the relief to
which the CAA entitles them under the independent section 126
provision. In addition, last year the U.S. Court of Appeals for the
D.C. Circuit, denied requests from litigants to stay the section 126
action. Thus, in a rule published on January 18, 2000, EPA granted the
approvable petitions from the downwind States. Under this rule, large
utilities and large industrial boilers and turbines in the States
covered by the petitions must reduce their NOx emissions by May 1,
2003. The January 18, 2000 section 126 rule still gives States the
option of preempting the section 126 remedy and selecting a different
set of controls to address the NOx transport from the State. The
section 126 rule provides that if a State submits, and EPA gives final
approval to, a SIP revision meeting the full NOx SIP Call requirements,
as were established in the October 27, 1998 rule and amended in the
March 2, 2000 technical amendment, including the original May 1, 2003
compliance deadline, the section 126 requirements would automatically
be revoked for sources in that State. The EPA has already received full
NOx SIPs from several States that require the necessary reductions by
May 1, 2003. The EPA is aware that a number of other States are also
expecting to submit SIPs which, upon approval, would satisfy the
conditions for withdrawing the section 126 requirements. EPA will work
with each interested state on a case-by-case basis to determine whether
the section 126 remedy can be lifted in that state.
With regard to the NOx SIP call, on March 3, 2000, the U.S. Court
of Appeals for the D.C. Circuit upheld the NOx SIP call on all major
issues, but vacated and remanded four narrow issues to EPA for further
consideration. The EPA is conducting a rulemaking on the remanded
issues. On June 22, 2000, the Court lifted the stay of the NOx SIP call
submission deadline and determined that the SIPs would be due October
30, 2000. On August 30, 2000, in response to a motion from industry,
the court extended the NOx SIP call compliance deadline until May 2004
so that the court's May 1999 stay of the NOx SIP Call would not
decrease the time sources would have to comply.
__________
Statement of Michael Davis, Deputy Assistant Secretary of the Army for
Civil Works
Introduction
Mr. Chairman and members of the subcommittee, thank you for the
opportunity to provide testimony on the President's fiscal year 2001
budget request for the Army Regulatory Program and recent regulatory
program initiatives. I am Michael L. Davis, Deputy Assistant Secretary
of the Army for Civil Works. As the Deputy Assistant Secretary
responsible for Civil Works Policy and Legislation, I am directly
involved in the regulatory initiatives of the Army Corps of Engineers.
The Army has full responsibility for the administration of the
regulatory programs implementing Sections 9 and 10 of the Rivers and
Harbors Act of 1899 and primary responsibility, along with the
Environmental Protection Agency, for implementing Section 404 of the
Clean Water Act (CWA).
In this statement I will provide a short overview of the regulatory
program and current levels of performance. I will also discuss recent
high priority regulatory initiatives involving changes to the Army
nationwide permit program and the establishment of an administrative
appeals process. I will conclude with an overview of the regulatory
budget.
Army Regulatory Program
The cost for operating the Army regulatory program over the last 10
years has risen steadily. This increase has come about as changes in
law and policy have resulted in the need for new initiatives to
maintain and improve levels of environmental protection and service to
the regulated public. During fiscal year 1999, the Army Regulatory
Program provided written authorization for over 90,000 activities, the
most in any year. Over 90 percent of all those actions were authorized
in less than 60 days, a remarkable accomplishment. The performance
statistics cited in the remainder of this testimony reflect only a
portion of this work, which is accomplished by approximately 1,100
regulatory staff members nationwide. These highly skilled and dedicated
men and women are responsible for the thousands of permitting and
enforcement decisions made each year.
CWA Section 404 Program Performance
The CWA Section 404 program is a vital part of the Nation's overall
effort to protect, restore, and preserve our water resources. The
overarching statutory goal of the Section 404 program is to protect the
waters of the United States, including wetlands. Over the past 28 years
the Army Corps of Engineers has prevented the destruction of hundreds
of thousands of acres of wetlands and the degradation of thousands of
miles of rivers and streams. This has reduced property damage and loss
of lives from flooding and protected fish and wildlife habitat and
water quality--all vital to the Nation's economy and overall health.
From a good public policy and investment perspective, the Section 404
program has been a success. For example, the Section 404 program played
a key role in reducing wetlands losses from over 400,000 acres per year
in the mid-1970's to approximately 100,000 acres a year in the mid-
1990's.
While the program helps stem the loss of wetlands and other aquatic
resources, it does so in a manner that minimizes the unnecessary
regulatory burdens on those that must apply for permits. Administering
the Army Regulatory Program in a fair, flexible and effective manner
has been a priority of the Administration since 1993. In short, permit
applicants receive a timely and professional response from the Corps.
As with any program of this nature there will be a few exceptions--but
these are truly the exception to the tens of thousands of regulatory
actions that are handled smoothly each year.
The graphics provided throughout this statement highlight the
operation and performance of the CWA Section 404 program. As shown in
Figure 1, the Corps received an average of 74,500 Section 404 permit
requests per year from fiscal year 1996 to fiscal year 1999. Of those
requests, 84.4 percent were authorized through a general permit. Only
6.7 percent of all permit applications were subject to the more
detailed individual permit evaluation, through which impacts are
avoided and compensated. Because of our effectiveness in avoiding and
mitigating impacts, only 3 tenths of a percent of all Section 404
requests were denied. Finally, it should be noted that thousands of
additional actions requiring authorization by Section 404 were allowed
to proceed under the authority of general permits that do not require
any notification to the Corps.
figure 1
The number of days required to evaluate requests for standard
individual permits and general permits are provided in Figure 2. From
fiscal year 1996 to fiscal year 1999, decisions for standard individual
Section 404 permits took an average of 107 days, with decisions for
general permits averaging only 14 days. As Figure 1 demonstrates, the
general permit program is an important part of the overall regulatory
program. By providing a screening mechanism for activities with minimal
adverse effects, general permits allow the Corps to focus its
priorities and resources on those activities with the potential for
greater environmental impacts. Those activities that are truly minor
are allowed to go forward with little or no review by the Corps while a
relatively few are subject to a more thorough individual review.
figure 2
General Permits
Section 404(e) of the CWA provides the Secretary of the Army the
authority to issue general permits subject to the following
requirements:
General permits must be for a category of activities;
General permits may not result in more than minimal
impacts either individually or cumulatively; and
General permits may be issued only after an opportunity
for public notice and comment and are valid for no more than 5 years.
Since the addition of Section 404(e) in 1977, the Army has used the
general permit program to authorize hundreds of thousands of activities
nationwide. These general permits have been issued on a nationwide
basis (Nationwide Permits), on a Corps district basis (regional general
permits), and on a programmatic basis. As noted in Figure 1 above, the
general permit program continues to be an integral part of the Army
Regulatory Program--authorizing over 80 percent of all CWA Section 404
activities.
Recent Nationwide Permit Revisions
The most widely used general permits are the Nationwide Permits
(NWPs) issued by the Corps headquarters in consultation with my office
and other agencies. Of the nearly 40 NWPs, Nationwide Permit 26 (NWP
26) was used the most by permitting a wide variety of activities in
specific waters (i.e., headwaters and isolated waters). NWP 26 also
engendered considerable controversy and was the subject of litigation
by the environmental community who argued that it did not meet the
statutory requirements of CWA Section 404(e) discussed above.
In 1977, the Corps issued the first NWP 26 and authorized unlimited
discharges of dredged or fill materials into non-tidal rivers, streams
and their impoundments including isolated wetlands and adjacent
wetlands that were located in the headwaters of river systems. The term
``headwaters'' was administratively defined, as the point on a non-
tidal stream above which the average annual flow is less than 5 cubic
feet per second. In 1986, the Corps issued a revised NWP 26, which
authorized impacts up to 10 acres and required that the Corps be
notified of proposed discharges greater than one acre.
As our scientific understanding of the importance of headwater
systems and isolated wetlands improved, we became concerned that, from
a national perspective, some of these activities authorized by NWP 26
probably had more than minimal adverse impacts on the aquatic
environment. The concern was that NWP 26 authorized too many projects
in the headwaters and isolated waters, increasing the frequency of
flooding, destroying valuable fish and wildlife habitat and impairing
water quality. Further, many continued to question the legality of NWP
26--casting doubt and uncertainty on the entire nationwide permit
program.
The validity of the underlying basis for NWP 26 was questioned by
the National Academy of Sciences in a study undertaken at the direction
of Congress. In the part of its 1995 report that addressed NWP 26, the
Academy concluded that ``The scientific basis for policies that
attribute less importance to headwater areas and isolated waters than
to other wetlands is weak.'' The enormity of environmental resources at
risk was highlighted by 1995 data from the Corps, which showed that
over 25 percent of all permitted wetland losses were the result of NWP
26. Over 80 percent of all wetland losses associated with general
permits were the result of NWP 26.
The President's 1993 Wetlands Plan called for a review of NWP 26
and the 1998 Clean Water Action Plan promoted increased wetlands
protection through more effective avoidance and compensation of
impacts. Further, the Administration has been unequivocal in its
promotion of the wise and sustainable use of our floodplains. Every
year lives are needlessly lost and the Nation spends over $4 billion
paying for flood damages.
In 1996, the Army again modified NWP 26 and reduced the maximum
allowable impacts from 10 acres to three. The Army also committed to
further improving environmental protection by replacing NWP 26 with
more environmentally appropriate activity based NWPs. In this regard,
on March 7, 2000, after several opportunities for public comment, the
Corps issued five new permits and modified five existing NWPs. The new
and modified NWPs will become effective June 7, 2000. NWP 26 will
remain in effect until then. These permits substantially improve
environmental protection while allowing those activities that are truly
minor to go forward with little or no review.
Under the new NWP program only those activities involving less than
one-half acre of impacts will be allowed under a NWP. In addition, any
activity involving more than one-tenth acre of impacts requires the
notification of the Corps. To reduce adverse impacts from flooding
caused by development in the floodplain, we have also added a permit
condition that prohibits the use of most of the NWPs in much of the
100-year floodplain. We have also added a condition that prohibits the
use of the NWPs in ``critical resource waters'' (e.g., critical habitat
for endangered species and wild and scenic rivers). Not all changes,
however, have resulted in restrictions on the use of NWPs. For example,
unlike NWP 26, the use of the new NWPs is not limited to the headwaters
and isolated waters. In addition, the scope of certain NWPs such as NWP
12 for utility crossings has been expanded to increase their utility
and applicability.
As we developed the new NWPs we not only considered the need to
improve environmental protection, we also considered the effect of such
changes on the Corps workload and the regulated public. Based on our
review, we are confident that the final changes made on March 7, 2000,
are needed and justified by the increased environmental protection.
Further, these changes substantially increase the legal sustainability
of the NWP program and consequently provide the regulated public much
greater certainty. There is no denying that the Corps workload will
increase as a result of these changes. Our preliminary estimates
indicate that the number of individual permit applications may
increase, perhaps on the order of 20 percent. Notwithstanding this
estimate, the Corps predicts that the vast majority, over 85 percent,
of Section 404 activities will continue to be covered by general
permits.
In short, while the Corps Section 404 workload will increase and
without some additional funding program performance may be diminished,
we believe that cleaner water, healthier habitat, and reduced damages
from flooding are worth the costs.
Administrative Appeals
As stated above, we strive to administer the regulatory program in
a fair and flexible manner--eliminating unnecessary regulatory delays
and costs. I believe that overall we have been very successful. Most
permit applicants receive a permit in a timely manner. The environment
is protected through the regulatory program's avoid, minimize, and
compensate sequencing policy. As with any program, improvements can be
made. In the case of Section 404 we should continue to improve the
protection of important aquatic resources and continue to look for ways
to improve responsiveness to the public. We are committed to both of
these objectives.
In the 1993 President's Wetlands Plan, the Administration made a
commitment to develop an administrative appeal process for those permit
applicants that believe they received unfair or adverse permitting
decisions. The Wetlands Plan called for an administrative process to
provide landowners an opportunity for a hearing by higher level
decision-makers, without the need for resorting to costly and time
consuming lawsuits. On July 19, 1995, the Corps published a proposed
administrative appeal process. After evaluating and addressing the
issues raised in comments submitted in response to the proposed rule,
the Corps, on March 9, 1999, published a final rule establishing an
administrative appeal process for permit denials and declined
individual permits. That rule became effective on August 6, 1999. In
the rule the Corps noted that due to budget constraints, it was
delaying publication of an administrative appeal process for
jurisdictional determinations.
The fiscal year 2000 Energy and Water Appropriations Act provided
funds to administer an appeals process for jurisdictional
determinations. I am pleased to note that the final rule for this last
part of the appeals process will be published today. This rule
establishes a one step administrative appeal process for jurisdictional
determinations.
To date we have evaluated 12 request for appeals of denied permits.
One has been sustained, one remanded back to the district and ten are
pending. Our workload estimates indicate that approximately 150 permit
denials and 5,000 wetland delineations will be appealed annually. One
full time equivalent (FTE) in each of the eight Corps division offices
has been provided to serve as division level review officers for these
cases. The Corps estimates that operation of the appeal program will
require an expenditure of approximately $5 million per year. The appeal
of jurisdictional determinations will be managed by the Corps division
appeals review officers, but an additional 38 FTEs will be added to
support the participation of Corps district staff.
Regulatory Budget Overview
As shown in Figure 3, regulatory appropriations have increased over
the last 10 years, from $64.5 million in fiscal year 1990 to $117
million for fiscal year 2000. The President's budget request for the
Army Regulatory Program for fiscal year 2001 is $125 million. Program
funding increases have for the most part covered only the normal year
to year labor costs, along with some programmatic initiatives and
special studies. In 1990, regulatory funding supported a national staff
of 945 individuals. The fiscal year 2000 regulatory appropriation will
support a national field presence of approximately 1,100 regulatory
personnel. This is a modest 14 per cent increase in staffing over 10
years. Increases in the regulatory budget also reflect an increasing
need to improve environmental protection and to develop programmatic
tools to improve overall performance.
figure 3
The Army Regulatory Program fiscal year 2001 funding request of
$125 million is necessary to ensure that we continue to provide
effective and equitable regulation in the Nation's wetlands and
waterways. Approximately $5 million of this amount is needed to help
address increases in workload and normal increases in cost due to
inflation. Other program management efforts will also continue as in
past years, including specialized training of Corps personnel and
technical assistance to Corps districts from the Corps Waterways
Experiment Station (WES). Generally, from $500,000 to $1 million is
allocated to WES each year for technical assistance with complex and
sensitive permit cases. In addition, similar funding amounts may be
allocated to other Corps labs (Civil Engineering Research Laboratory
and the Institute for Water Resources) to address special program
management issues. These include; studies of mitigation banking
practices; improvements to automated data systems for tracking program
workload and wetland impact data, and an assessment of environmental
impacts resulting from nationwide permits.
The budget request for fiscal year 2001 includes an identified
increase of $3 million for further development of specialized tools and
studies to protect better the aquatic environment in sensitive areas.
These studies are variously called watershed studies, SAMPs (Special
Area Management Plans), or other similar designations. In these cases,
the Corps in cooperation with federal, tribal, state, and local
agencies analyze the functions of aquatic ecosystems in a specific
geographic areas. The agencies then work together toward issuing
regional general permits for development in some of the moderate to
lower value aquatic areas. The advantage to this approach is that the
higher value aquatic ecosystems can be identified, mapped and generally
avoided (or subject to a more thorough evaluation if development is
proposed). In addition, lower value or moderate value aquatic
ecosystems can be subject to authorization quickly by regional general
permits, with mitigation specified, which will improve degraded or lost
portions of the aquatic ecosystems in the watershed. The products from
these studies provide better predictability for the regulated public,
and better, more focussed protection of the aquatic environment.
Conclusion
The Nation's aquatic resources are vital to our environmental and
economic health. Our rivers, lakes, and wetlands are the lifeblood of
our great landscapes. They support the fish and wildlife that we catch,
hunt, and watch. They provide us with water--an essential component of
all living things. The Army Regulatory Program plays an important role
in protecting these resources for today and for future generations.
Through the Army Regulatory Program we are committed to serving the
public in a fair and reasonable manner while ensuring the protection of
the aquatic environment as required by laws and regulations. We will
continue to pursue the important initiatives described above. Our
regional and nationwide general permits program will continue to be
evaluated for opportunities to improve both environmental protection
and performance. We have established a full administrative appeals
process that will allow the public to challenge permit decisions and
jurisdiction determinations without costly, time-consuming litigation.
The President's budget request is needed to help maintain this level of
commitment and service.
Thank you for the opportunity to provide this testimony on behalf
of the Army, I will be pleased to answer any questions you or other
subcommittee members may have.
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