Chairman Stearns, thank you for convening an oversight hearing on "Administration and Regulatory Reform", and allowing me to submit an opening statement to the record. As a member of the Energy and Commerce Committee and as a former Ranking Member on the Oversight and Investigations Subcommittee I look forward to working with you and value the important efforts the subcommittee will undertake in this new Congress.
I have briefly described below a few of the major administrative and regulatory rules that will have an impact on job creation and the rural economy in Oregon. Each of the issues reiterates the need to reform the regulatory process and bring accountability and transparency to the agencies that promulgate and implement these rules.
Despite the fact that some of these rules and regulations have yet to be finalized or are in legal limbo, they have already had a chilling impact on the growth of jobs in Oregon and reduced the ability for businesses to plan how to best invest in growing their business. Frustrating to many businesses and Oregonians with whom I've met is the fact that these agencies rarely take into consideration the economic impact that their rules and regulations will have once implemented, not to mention the cumulative impact of multiple costly rules on American businesses and manufacturers.
Thank you for considering these and their unique impact to Oregon's natural resource based economy as the subcommittee undertakes its important oversight responsibilities.
Boiler MACT Rules: In June 2010, the Environmental Protection Agency (EPA) announced a Maximum Achievable Control Technology (MACT) rule that would set unreasonably strict emissions limits and other requirements on industrial, commercial and institutional boilers, and process heaters that use fossil fuels and renewable biomass. The Boiler MACT rule has drawn criticism from bipartisan groups of lawmakers and from manufactures across the country including those in Oregon that utilize renewable biomass as a feedstock for their boilers. Impacting about 55,000 boilers nationwide, this EPA rule would require more than 99 percent of boilers to meet standards that only the top 12 percent of boilers can meet. According to industry reports, the cost to the forest products companies alone is estimated at around $7 billion, and the cost to the manufacturing economy would be between $20 billion and $50 billion. I've enclosed a letter from Members of Congress to EPA Administrator Lisa Jackson regarding concerns about this issue as well as numerous letters from forest products companies in Oregon that would be impacted by this rule.
Portland Cement MACT Rules: In September, the EPA finalized new national emission rules for Portland Cement manufacturing plants. Unfortunately, EPA did not utilize its authority to issue a subcategory under the rule to recognize the unique difference in manufacturing processes, raw material inputs, and associated emissions at various cement manufacturing facilities across the country. I, along with a number of state and local officials, have for over two years now explained to EPA the extensive efforts and investments undertaken by Ash Grove Cement Company to reduce the high levels of mercury emissions that are attributable to naturally occurring mercury in the limestone quarries where Ash Grove's Durkee Cement Plant is located in eastern Oregon. Without the inclusion of a subcategory, this rule could lead to the closure of Ash Grove's Durkee, Oregon plant affecting 116 family-wage manufacturing jobs. Despite working closely with, and with approval from, the State of Oregon Department of Environmental Quality and local stakeholder groups to reduce mercury emissions levels by up to 90 percent through the installation of $20 million of the most advanced control technologies available, the Administration's unreasonable regulation insists that they reduce emissions by 95 percent. This standard could result in the closing of the plant and the loss of 116 jobs in rural Oregon. I've enclosed two letters that I have sent to EPA regarding this rule as well as a series of letters from local elected officials and the business community.
Particulate Matter Regulation: In July 2010, the EPA through its review of air quality standards for particulate matter laid the foundation for establishing the most stringent and unparalleled regulation of dust in our nation's history. EPA's draft policy assessment for particulate matter would disproportionately affect rural America and the ability of Oregon's farmers and ranchers to produce food and fiber for the world. Through these new standards, EPA has essentially proposed to reduce the particulate matter size to a point where everyday actions in rural America such as driving on gravel roads, harvesting grain or gathering cattle on the range would generate dust in violation of the standard. I have enclosed a letter from Members of Congress to the EPA regarding the agency's Second Draft Policy Assessment for particulate matter and its potential negative impacts.
Tailoring Rule: In May 2010, the EPA's final PSD Tailoring Rule failed to recognize the carbon cycle of biogenic sources, such as renewable biomass, despite long standing national and international policy to the opposite. Central Oregon has at least two major biomass power proposals underway--projects that are expected to bring in nearly 100 jobs in a region where unemployment is over 14 percent. Nationally, one expert estimated that implementing this rule would cause a loss of $18 billion in capital investment. After numerous Congressional efforts to explain the carbon neutrality of biogenic sources, EPA in early January decided to postpone for three years the pre-construction permitting requirements under the Tailoring Rule for biomass and other biogenic emissions until a more thorough internal evaluation can be conducted. Although this is a positive step, I am concerned that the ambiguities surrounding EPA's treatment of biomass will only lead to three more years of uncertainty about how they will treat biomass from federal and private forest lands as a renewable resource. I am deeply concerned that the delay in consideration of this misguided rule will have a chilling effect on potential biomass power projects during the interim period. I have enclosed two letters from a bipartisan group of Members of Congress as well as EPA's response where from January 12, 2011 where it announced the three-year deferral.
Pesticide Buffer Zones: Last spring, the EPA issued an ultimatum to implement the National Marine Fisheries Service (NMFS) 2008 biological opinion (BIOP) for the use of certain pesticides in Oregon, Washington, California, Idaho, and other states. EPA's guidance, which was based on a flawed NMFS BIOP that EPA itself said "lacks a level of transparency necessary for EPA to understand NMFS's rationale for it opinion that the use of any of the pesticides will jeopardize the continued existence", failed to take into consideration the latest science or input from agriculture producers and will require producers in Oregon, Washington, California and Idaho to create 500-1,000 foot spray-free buffer zones around streams and rivers. This would have a devastating impact. In Oregon alone, 40 percent of agriculture lands would have to be taken out of production to comply with a 500-foot buffer zone requirement--up to 67 percent with 1,000 foot buffers. I've enclosed a letter I sent with other members of the northwest delegation to express concerns about the EPA's reliance on a flawed process to implement these job-destroying buffer zones.