Though top House Republicans have argued that U.S. EPA's climate rules will slam consumers by raising the cost of gasoline, a bill to reject the agency's greenhouse gas regulations would backfire by causing Americans to waste hundreds of millions of barrels of oil, U.S. EPA Administrator Lisa Jackson said today.

She made the comments in testimony before members of the House Energy and Commerce Committee, one day after the bill (H.R. 910) cleared the Energy and Power Subcommittee. The full panel is expected to pass the legislation next week.

House Energy and Commerce Chairman Fred Upton (R-Mich.) and his colleagues have tried to tie the bill to high gas prices, which are flirting with $4 per gallon and are expected to go even higher as summer driving season approaches. They say the new limits on greenhouse gas emissions from power plants, refineries and other large industrial plants will cause a spike in energy prices, but Jackson said today that people would need to spend more money on gas if EPA is not allowed to set new fuel efficiency standards for cars and trucks.

"It would increase our oil dependence by hundreds of millions of barrels," she said of the bill. "It would do so by blocking EPA's common-sense steps under the Clean Air Act on vehicle standards, because that bill -- although it recognizes past standards -- undoes the endangerment finding on which those standards are based, and then takes EPA out of the process for years 2016 and beyond."

During debate on the bill, Republicans cited a 2009 statement by Jackson in which she said Clean Air Act limits on greenhouse gases would cost more than a cap-and-trade bill setting an overall limit on carbon emissions. And according to Republican estimates, the climate bill would already cost households thousands of dollars a year.

"Per Lisa Jackson herself, greenhouse gas regulation is expected to impose even greater economic costs than the bills that ultimately failed in Congress," Upton and Energy and Power Subcommittee Chairman Ed Whitfield (R-Ky.) said in a letter that was circulated before yesterday's vote.

Republicans slammed Jackson on her comments today, pointing to the bill's exemption for tailpipe emissions rules through 2016.

But it would bar the agency from setting future limits on the amount of carbon dioxide that cars and trucks can release for every mile traveled. The measure would not affect the Department of Transportation's ability to set corporate average fuel economy standards for future years, but advocates for the standards say they would likely be less stringent than EPA's tailpipe standards because DOT looks at different criteria when it sets them.

The budget divide

Republicans are hoping to roll back EPA's spending to 2008 levels, which would require a cut of about $3 billion from the $10.2 billion that the agency was given in fiscal 2010. There is a $2 billion gap between their target and the $9 billion budget President Obama has put forward for fiscal 2012, setting up a spending clash beyond the current spat over funding for the rest of fiscal 2011.

But as the Republicans seek to shrink the deficit, they are also hoping to cut regulations they say are holding back the economy.

EPA's spending request of $9 billion is a relatively small price tag, considering that this year's deficit is expected to total about $1.5 trillion, but "the less transparent and vastly larger cost that job creators must pay to comply with your regulations is especially concerning," Upton said in his opening statement.

"We want to trim both," he added.

Democrats on the panel criticized the Republicans' spending plans as well as the bill blocking EPA's climate rules, describing it as a broader assault on environmental programs.

The new Republican majority of the House is both "anti-environment" and "anti-science," Energy and Commerce ranking member Henry Waxman (D-Calif.) said today. Their spending bill for the rest of the current fiscal year, which included a number of amendments to stop EPA from using its funding to follow through on certain programs, was the "most sweeping and reckless assault on health and the environment that we have seen in decades," he said.

Jackson echoed that criticism, cautioning the committee about overriding the scientific finding that greenhouse gases are a threat to human health and welfare.

"You might well be remembered more for that than for anything else you do," she said.

Jackson replies on climate settlements

Yesterday, Jackson sent a letter to Energy and Commerce Chairman Fred Upton (R-Mich.) rebutting his claim that EPA had gone against the rules of President Obama's new regulatory review initiative by agreeing to create another round of greenhouse gas limits for power plants and refineries behind closed doors.

The agency announced its plan to set the rules, called New Source Performance Standards, after reaching a settlement with environmentalists in December. Industry groups grumbled that they had been left out of the settlement talks, which led to deadlines for the new rules, but EPA and the Justice Department followed the usual process for legal negotiations, Jackson wrote yesterday.

EPA agrees that it is obligated to set the new greenhouse gas limits, she added, saying the settlement was necessary "to avoid wasting taxpayer money on further pointless litigation, and to follow the law as interpreted by the Supreme Court."

Upton and Sen. James Inhofe (R-Okla.) said EPA should have consulted with industry groups before agreeing to the stricter rules for greenhouse gas emissions (E&E Daily, March 3).

But the agency has not chosen any rules yet, Jackson wrote. Since striking the deadline deal, EPA has held five "listening sessions" to get advice on the new rules from businesses, advocacy groups and the states.

"By reaching a settlement that provides deadlines by which EPA will complete a rulemaking process," Jackson added, "the agency avoided the risk that court-ordered schedules would be shorter and prevent EPA from proceeding in a measured and careful manner with the full involvement of all interested persons."

At today's hearing, Jackson said lawsuits could eventually make the agency agree to set the standards for other pollution sources. She was responding to Rep. Lee Terry (R-Neb.), who quizzed the administrator on her plans to formulate similar standards for the electric arc furnaces used in metal production.

"We will have to come out with a schedule at some point to regulate them, but we believe we don't have to do that in the near future," Jackson said.

Click here to read the letter.