EPA’S CARBON PLAN: FAILURE BY DESIGN HEARING BEFORE THE COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY HOUSE OF REPRESENTATIVES ONE HUNDRED THIRTEENTH CONGRESS SECOND SESSION JULY 30, 2014 Serial No. 113–89 Printed for the use of the Committee on Science, Space, and Technology ( Available via the World Wide Web: http://science.house.gov U.S. GOVERNMENT PUBLISHING OFFICE 89–418PDF WASHINGTON : 2015 For sale by the Superintendent of Documents, U.S. Government Publishing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY HON. LAMAR S. SMITH, Texas, Chair DANA ROHRABACHER, California EDDIE BERNICE JOHNSON, Texas RALPH M. HALL, Texas ZOE LOFGREN, California F. JAMES SENSENBRENNER, JR., DANIEL LIPINSKI, Illinois Wisconsin DONNA F. EDWARDS, Maryland FRANK D. LUCAS, Oklahoma FREDERICA S. WILSON, Florida RANDY NEUGEBAUER, Texas SUZANNE BONAMICI, Oregon MICHAEL T. MCCAUL, Texas ERIC SWALWELL, California PAUL C. BROUN, Georgia DAN MAFFEI, New York STEVEN M. PALAZZO, Mississippi ALAN GRAYSON, Florida MO BROOKS, Alabama JOSEPH KENNEDY III, Massachusetts RANDY HULTGREN, Illinois SCOTT PETERS, California LARRY BUCSHON, Indiana DEREK KILMER, Washington STEVE STOCKMAN, Texas AMI BERA, California BILL POSEY, Florida ELIZABETH ESTY, Connecticut CYNTHIA LUMMIS, Wyoming MARC VEASEY, Texas DAVID SCHWEIKERT, Arizona JULIA BROWNLEY, California THOMAS MASSIE, Kentucky ROBIN KELLY, Illinois KEVIN CRAMER, North Dakota KATHERINE CLARK, Massachusetts JIM BRIDENSTINE, Oklahoma RANDY WEBER, Texas CHRIS COLLINS, New York BILL JOHNSON, Ohio SUBCOMMITTEE ON RESEARCH AND TECHNOLOGY HON. LARRY BUCSHON, Indiana, Chair STEVEN M. PALAZZO, Mississippi DANIEL LIPINSKI, Illinois MO BROOKS, Alabama FEDERICA WILSON, Florida RANDY HULTGREN, Illinois ZOE LOFGREN, California STEVE STOCKMAN, Texas SCOTT PETERS, California CYNTHIA LUMMIS, Wyoming AMI BERA, California DAVID SCHWEIKERT, Arizona DEREK KILMER, Washington THOMAS MASSIE, Kentucky ELIZABETH ESTY, Connecticut JIM BRIDENSTINE, Oklahoma ROBIN KELLY, Illinois CHRIS COLLINS, New York EDDIE BERNICE JOHNSON, Texas BILL JOHNSON, Ohio LAMAR S. SMITH, Texas (II) C O N T E N T S July 30, 2014 Page Witness List ............................................................................................................. 2 Hearing Charter ...................................................................................................... 3 Opening Statements Statement by Representative Cynthia Lummis, Chairman, Subcommittee on Energy, Committee on Science, Space, and Technology, U.S. House of Rep- resentatives ........................................................................................................... 9 Written Statement ............................................................................................ 10 Statement by Representative Eddie Bernice Johnson, Ranking Member, Com- mittee on Science, Space, and Technology, U.S. House of Representatives .... 11 Written Statement ............................................................................................ 12 Witnesses: The Honorable Jeffrey Holmstead, Partner, Bracewell & Giuliani LLP Oral Statement ................................................................................................. 14 Submitted Biography ....................................................................................... 16 The Honorable Charles McConnell, Executive Director, Energy & Environ- ment Initiative, Rice University Oral Statement ................................................................................................. 23 Written Statement ............................................................................................ 25 Mr. David Cash, Commissioner, Massachusetts Department of Environmental Quality Oral Statement ................................................................................................. 78 Written Statement ............................................................................................ 81 Mr. Gregory Sopkin, Partner, Wilkinson, Barker, Knauer LLP Oral Statement ................................................................................................. 89 Written Statement ............................................................................................ 91 Discussion ................................................................................................................. 116 Appendix I: Answers to Post-Hearing Questions The Honorable Jeffrey Holmstead, Partner, Bracewell & Giuliani LLP ............ 146 The Honorable Charles McConnell, Executive Director, Energy & Environ- ment Initiative, Rice University ......................................................................... 153 Mr. David Cash, Commissioner, Massachusetts Department of Environmental Quality .................................................................................................................. 156 Mr. Gregory Sopkin, Partner, Wilkinson, Barker, Knauer LLP .......................... 158 Appendix II: Additional Material for the Record Report submitted by Representative Eddie Bernice Johnson, Ranking Mem- ber, Committee on Science, Space, and Technology, U.S. House of Rep- resentatives ........................................................................................................... 178 Report submitted by Representative Elizabeth Esty, Committee on Science, Space, and Technology, U.S. House of Representatives .................................... 234 Report submitted by Representative Randy Neugebauer, Committee on Science, Space, and Technology, U.S. House of Representatives ..................... 245 (III) IV Page Graphs submitted by Representative Larry Bucshon, Committee on Science, Space, and Technology, U.S. House of Representatives .................................... 297 Article submitted by Representative Randy Neugebauer, Committee on Science, Space, and Technology, U.S. House of Representatives ..................... 300 EPA’S CARBON PLAN: FAILURE BY DESIGN WEDNESDAY, JULY 30, 2014 HOUSE OF REPRESENTATIVES, COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY, Washington, D.C. The Committee met, pursuant to call, at 10:07 a.m., in Room 2318 of the Rayburn House Office Building, Hon. Cynthia Lummis [Chairwoman of the Committee] presiding. (1) 2 3 4 5 6 7 8 9 Chairman LUMMIS. Good morning. The Committee on Science, Space, and Technology will come to order. Welcome to today’s hearing titled ‘‘EPA’s Carbon Plan: Failure by Design.’’ In front of you are packets containing the written testi- monies, biographies, and truth-in-testimony disclosures for today’s witnesses. And without further ado, I now recognize myself for five minutes for an opening statement. Today, we are examining one of the most sweeping regulatory proposals in American history. The EPA is attempting to take con- trol of our nation’s electric system without legal or scientific jus- tification. The EPA’s Clean Power Plan reaches well beyond the regulation of power plants. The EPA wants to control the entire system, right down to the amount of electricity Americans use in their homes. The implications of this overreach really are staggering. The rule has the potential to shut down power plants across the Nation, raise energy prices, and threaten energy security. And I submit for what? The EPA admits that the rule will have little or no impact on global warming. In this case it appears to be regulation in the name of climate change but it is just regulation in the name of reg- ulation, Federal control for Federal control’s sake. EPA’s proposal would impose standards on States that turn power systems on their heads. Each State’s reduction mandate var- ies widely, based on what the EPA claims can be done through a combination of costly efficiency technologies, drastic fuel switching, and unprecedented reliance on intermittent renewables and energy rationing. States, companies, and utility commissioners and local officials are left figuring out how to comply, which will necessarily involve higher prices and potentially threaten grid reliability. The EPA claims the rule is flexible and that compliance is easy. But the EPA’s assurances are of little comfort when the standards are be- yond what technology can deliver and ratepayers can afford. The ability of the EPA’s so-called building blocks, which are real- ly mandates, to produce the required reductions is uncertain. The limited analysis in this rule is based on black box models and un- tested assumptions. This hides the hard fact that ratepayers will be left holding the bag on an expensive overhaul of our electric sys- tem to reach theoretical and unproven targets. The confusion also hides a more fundamental concern. The EPA is operating outside the bounds of the law. The Clean Air Act does not give the EPA the authority to regulate the electric grid or tell Americans where to set their thermostat. Instead, EPA is limited to technology-based standards at the power plants themselves. As our witnesses will explain, had EPA followed the law and been straightforward about what technology can accomplish, the rule might be manageable. But since the law doesn’t match this Administration’s agenda, the EPA is now bypassing Congress to re- write the statute. The EPA also ignores technology and reliability concerns. The Administration hasn’t fully considered the potential impacts of this proposal on the electric system, the economy, and