Regulation :

EPA's Gina McCarthy discusses future of agency air rules

How can states more easily implement efficiency measures and renewables into their energy portfolios? During today's E&ETV event coverage of the Georgetown Climate Center's event "Promoting Low-Carbon Solutions and a Resilient Future Together," Gina McCarthy, U.S. EPA assistant administrator for air and radiation, discusses the potential for future collaboration between industry and the agency on regulations. McCarthy is rumored to be at the top of the nomination list for EPA administrator.

Transcript

Gina McCarthy: Afternoon, everyone. How fun is this? It's great to be back. I was, it was just I think four years ago almost that we were here gathered. There's more suits this time. I don't know why, but, there's more suits. But it is exciting to be here, and I'm really excited because the conference this time is really not focused on whether we should take action, but how best to do that, and how we work together, and that's a lot different from just a short time ago, when I was actually at the state level, and we were suing EPA to recognize greenhouse gases as a pollutant that needed to be regulated under the Clean Air Act.

So it's been a short time, but we've come a long way, baby. And instead of lawsuits, we're really just talking about how we work together, how we learn from one another, how we support each other, and we're talking about the actions that we're each taking, and how they can integrate and complement one another.

I have a lot of issues and actions that I want to cover today, and I hope I won't bore you, but there's so much going on that I want to make sure that we all know what one another is doing, so then in the end, we can understand how best we actually do continue with this collaboration.

But I really should at this point stop and recognize Vicki and everybody else at Georgetown and the Climate Center for being so successful in keeping the states moving forward together. I know that the states have been working on these issues, as well as local governments and tribes, for a long time, and it will be a lot longer for us to work on these issues together. But I think the more we can collaborate and we get together, like these few days, the most we can find the cost effective solutions that are going to continue down this what will inevitably be a long run, but a road we have to travel together.

But it is exciting, because there's so much of what's been happening at the state and local that has become more mature than it was when I was hanging out at the state level. There are more tools, there's case studies, there's model programs that we can continue to push forward to accomplish together. And now it's not if the United States will do something about climate change, but again, it's all about how.

So we have crossed that hurdle, and since issuing the Endangerment Finding for greenhouse gases, EPA has been answering questions as well. It's been taking common-sense steps under the Clean Air Act, as well as through a series of voluntary programs. And make no mistake, regulatory action and voluntary programs all have a place in how we address greenhouse gases. It's very exciting to me to see that some of the programs at EPA are being as successful as they have been in working with the states, at incentivizing opportunities, at building tools, seeing the states run with those issues, understanding how important climate change is to mayors across this country. It's an exciting time, and one in which I know that we will find ways to collaborate more and more together.

Now these steps that we're all taking, I think one of the best things about coming to this group, knowing that you've already done so much, and you've already analyzed the results of those, and you're already talking about them, one of the best reasons to come here is because everything that you have done is not just good for the planet in terms of its impact on climate, but you've done it because it's been good for your individual states, it's been good for the individual communities, it's been good for the American families that you are serving. We know that it hasn't hurt the economy.

If you take a look at what's recently happened with the Regional Greenhouse Gas Initiative, you will see and read the press releases, not from the environmental agencies in those states, but from the governors of those states. If you read what Governor Deval Patrick said, you will realize that there are tremendous opportunities to address climate change in ways that build the economy, that grow jobs, that you can articulate make sense to every individual who works in those communities. And that's what's I think most exciting about being here with you, because you know it. You've got firsthand knowledge of what's going on in your own communities, and why what you're doing is not just right, but it's really good for people, and it's the steps that we need to take, working together.

EPA, working with states and local communities, are building, hopefully building, on the progress that you have made so far. And it's not that hard in many ways, because reducing carbon pollution, increasing energy efficiency, strengthening energy security, all make sense. It doesn't matter whether you're an economist, an environmentalist, a public health advocate, a city planner, or the Department of Defense. This stuff makes sense.

And if you're a family struggling to make ends meet, saving money on your energy bill and going farther on a gallon of gas, that makes a lot of sense, too. And any time you look to be more efficient, you make yourself stronger. We are insulating families and the economy from fluctuations in energy prices and supplies.

So I just want to stop for one moment before I talk about what EPA is doing to again take a minute just to congratulate you, to just say bravo on all of the courage that you've shown, all the tenacity, all your willingness to put resources into these issues.

[Applause]

Your leadership at both the state and local level in confronting climate change has helped people to improve their health, their quality of life. It's helped to reduce air pollution, to improve your communities, and to reduce their energy bills all at the same time. So it is quite a significant win, and you have paved a pathway that I think the federal government can follow in and support. You have indeed because those laboratories of innovation that we used to tout ourselves to be, so that you can show everybody the path forward. And again, bravo. Bravo.

So now let's talk about more stuff to do. I know you've all been hearing about examples of state and regional climate initiatives today. I think I mentioned the Regional Greenhouse Gas Initiative. I couldn't be more thrilled that it's alive and well and continuing to evolve. I congratulate the states that are engaged in that effort. I want to congratulate obviously California. There are so many innovative ways of addressing these issues, and each state can take its own path, whether they do it individually or regionally.

And other states I know are continuing to develop and implement strategic climate plans, as well as adaptation plans, that will enable them to move forward and to face the future stronger and more resilient. But also, I do want to mention the fact that local communities have really also stepped up in a way that is quite startling, frankly, because at times when resources are low, you can see tremendous impacts in local governments over their ability to be able to pay for necessary services, never mind think creatively about how to make smart investments that in the long run will pay off. But they have been doing just that. They've been thinking, forward leaning, about how they address the challenges in their communities.

And EPA itself has been working with 50 local and tribal governments on pilot initiatives that move cost effective, community-based greenhouse gas reduction projects forward, and that's through our Climate Showcase Communities Program. And these communities have focused on climate projects that we believe offer opportunities for significant replication across the nation, and we're seeing that happen. These model projects and many others like them are just the beginning of what's really possible, and together, the pilot communities have done tremendous work.

We are estimating that by 2014, these projects along will avoid more than 350,000 metric tons of greenhouse gas emissions each year. That's equivalent to the annual emissions from almost 70,000 passenger vehicles, or the energy used by 30,000 homes. So this is not little efforts. These are a number of small projects that can really make big impacts. It saves nearly $19 million per year in energy costs for those communities. It creates jobs. It helps train hundreds of people to actually meet the jobs of today and the future.

In addition to piloting specific projects, cities are taking the lead by looking at their own buildings, because buildings actually generate a significant amount of greenhouse gases. And they're looking in particular at their commercial buildings, and we're trying to provide them tools that help them do that.

And I remember back in the sixties, one of my favorite sayings was, "Information is power." It still is true today. You tell people how efficient their building is, what it might be, you let them do the cost figures, going out over a few years, and bing, bing, bing, bing, you're not requiring things to happen, you're enabling things to happen. Give people the right information, and they make smart choices. And part of our job is to make sure that we're consistently working together to be clear on the costs and benefits of all of these programs moving forward, so communities can make smart choices.

Now I know you talked a little bit about electric vehicle deployment. You know, I'm sick and tired of California being out in front. We, Anthony, there you are. Where is everybody else? No, I know. And it's amazing what is actually happening, as we're looking at more companies who are investing in manufacturing these low emissions vehicles and electric vehicles, and I see Mike. Mike G. Lots of things are happening on the manufacturing side. I think our challenge is how do we make sure that the infrastructure is there to serve these. How do we make sure that as car companies are thinking about the technologies of the future, that our infrastructure of today can actually handle those and enable them.

The work that states are doing, and as much as I live California, thank God it's not all California, there is so much going on. You're using your own resources, as well as leveraging those resources with federal dollars and other incentives, and private sector dollars, to get out the infrastructure you need to make electric vehicles happen in your communities. You're looking at how you incentivize these through policies and through other mechanisms that will make this happen.

So while the federal government can tout its ability to bring more efficient vehicles into the market, working with the auto companies and the UAW and others, it's going to be up to you guys to figure out how best to make the technologies that people in your communities want to purchase and want to drive be available to them, because the infrastructure has to be there.

So now that I've said all of what you're doing, what the heck is EPA doing? That's a good question. It's always been a good question, and it will remain a good question.

[Laughter]

At EPA, we will do our part to build on your success, and as President Obama said, climate change is a priority, and we are going to take action. We began I think with Administrator Jackson's Endangerment Finding. That was a groundbreaking decision, which led us down the path of regulating carbon as a pollutant, and it opened the door to some historic achievements that Vicki did mention, but I will continually dwell on. One must dwell on success.

[Laughter]

Especially when you have a long road ahead. Every milestone should be celebrated. The light and heavy duty vehicle greenhouse gas standard was in fact a remarkable achievement. It looked at how to turn what has always been a rather contentious process of the work between NTSA and EPA to figure out how we could align our goals on fuel economy as well as greenhouse gas reductions, and how we could work together and speak with one voice, which we have never done before, and how we could not only speak once, but speak a couple of times, and how we could do that with the support and engagement, total engagement, of the companies themselves. And how we could work hand in hand with California, and hand in hand with the unions that service these manufacturing companies, and really do something that has never been done before, which is in the span of between 2012 and 2025 model years, was to double the fuel economy.

And at the same time, we did a really cool sticker, has anyone seen the labels out there? That was actually a more contentious process than doing ...

W

ell, you know, we didn't just double the fuel economy standard, but we also saved consumers more than $1.7 trillion at the gas pump, when you look at the life of these vehicles. One point seven trillion dollars. Tell me how that hurts. Tell me who's going to stand up and say, I don't want more fuel efficient vehicles, thank you very much. And the way in which we designed it allowed consumers to have their choice of the very same kind of vehicles that are available to them today, only more.

So if you want a heavy-duty vehicle, you need it to perform, you've got it. It's going to be manufactured. You want to go to an electric vehicle, and the infrastructure is available to you? You got it. And what our sticker does is tell you what you got. It allows you to make choices that mean something for individual families.

And not only that, it saves significant amounts of greenhouse gases, and it helps consumers save money, not just in the long run, but in the short run as well. We all know we finance vehicles. If you work in the public sector and you're buying a vehicle outright, I will question whether or not you're actually working in the public sector. I don't know about you, but I've never paid cash for a vehicle in my life. I don't expect I ever will. Not that they're overpriced, Mike, Mike Robinson. I don't mean that in any way, shape, or form.

[Laughter]

But what I do mean is that these vehicles pay back in a couple of years. Not only do you have the annoyance of going to the gas station all the time, and forgive me for all those who supply fuels. I didn't mean to say anything derogatory there, either. But you not only have that, but you really do save considerable money. And if you finance, every time you don't go to the gas station, you can save a little bit more to put to that monthly payment. It is a significant step forward for everybody in this country, whether you're at the high end of the pay scale or whether you're middle class or lower class. We need to keep moving forward, and these standards are tremendous.

Now the one thing you didn't quote, I'll skip all my quotes, but the heavy-duty vehicle rule. Don't forget that vehicles come in all shapes and sizes, and we also learned the lesson that we took advantage of in the light-duty vehicle rule. We did the same thing in the Heavy Duty Vehicle Rule. We got together with the industry. We talked about opportunities for reductions. We looked at the technologies available. We began to understand how greenhouse gases are emitted by the vehicles, what their efficiency is, what the opportunities are, and we sat them down in a room as well, maybe not in as formal a structure, or sitting up at a podium in the end, but they worked no less hard to have, with us so that we could develop a heavy duty truck rule that will also save significant amounts of greenhouse gases, as well as significant amount of money for truck owners.

And we are looking already at a phase two of that program. That program is between 2014 and 2018. We're looking beyond, out to 2025 as well. If we did it once, we can do it again.

Now it's not just about the vehicles, so let's talk just a tiny bit about renewable fuel standard, because it has to be part of the mix. It is something we're working very hard on. So we're not just looking at making engines and vehicles more efficient. We're looking at the fuels as well.

Now the big news this year, there's lots of big news, always, but something that never gets any publicity that I want to tell you about was something that I was very excited, and now you're going to see why I'm the biggest wonk in the world. What excites me is that we actually issued a RIN for cellulosic biofuel. Now that may not excite you.

[Laughter]

I wish it would. But it really was a milestone for me, because I know that one of the biggest wins in renewable fuels is our ability to produce fuel with cellulosic feed stock. For the first time, you can go visit a cellulosic refinery. Go visit one, please. Take pictures. Because what, we've been waiting for this to happen, haven't we? To make that move, and we have done it this year. They're actually being produced. We expect that that volume will increase. Now we know that it's no longer about feasibility studies and technology development. It's feasible. It's developed. It's here. The rest is going to be history. This will happen because it is happening.

And this year, our estimates of cellulosic biofuel production are actually based on product that's being produced, timelines for construction, startups happening. I know that I may be a bore and a wonk, but it's very exciting to me.

So let's get off the mobile sources and talk a little bit about the stationary sources, which are equally exciting. And I talked a little bit about the fact that EPA is really doing this, their actions in a very step-by-step, common-sense approach, so that we can meet our Clean Air Act obligations to address greenhouse gases from large industrial sources.

Now I don't have to tell the states that are here who have been working on these issues that it has been a resource challenge for both EPA and the states to figure out how to get this done and get this done well, but we did figure it out. Now I'm referring to the permitting challenges. We took a phased approach to permitting. We worked with the states, and I will tell you that we now have a very successful permitting program for large industrial sources that are producing significant amounts of greenhouse gases. How do I know it's successful? You never read about it.

[Laughter]

It's just not been an issue. We have worked very hard with the states. The states have for the most part taken over those permit programs. And this is what you're seeing when you look at those permits. You're seeing that the regulated entities who are coming into the permit process, we're not now talking about end of pipe controls, right? We're talking about efficiencies. We are getting more and more efficient industries that are being permitted because they're looking at it as a requirement in the rule. I need to try to reduce my greenhouse gases as much as possible.

But they're looking at the absolute benefits of building manufacturing facilities that are highly efficient. They are doing it, and this stuff is working. And I'm also very excited about that, as you can probably tell, because if it weren't working, we would be in difficulties. Now it is working, it's working well, and it's a collaborative process in which the states have played a great part, and I want to thank them for it.

Now let's talk a little bit about the carbon pollution standard for new power plants, which I like to call future power plants, so that there is a bit of a distinction. And really, what we're talking about regulating is future power plants. As you know, in March of 2012, EPA announced the first ever carbon pollution standard for future fossil fuel fired power plants. Power plants, as you know, account for about 40 percent of all carbon dioxide emissions. That's why we are paying attention to power plants. They are actually the single largest source of industrial greenhouse gas emissions in the United States.

The proposed standard would ensure that future power plants use modern technology, so they limit their carbon pollution. The proposal includes a flexible compliance program to facilitate the use of carbon capture and storage technology by future coal and petroleum coke power plants.

Now the common-sense proposal reflects the ongoing trend in the power sector to build cleaner plants that take advantage of modern technologies and fuels that are produced in the United States, and it would ensure that current progress continues toward a cleaner, safer, and modern power supply system. The agency is currently reading the one or two million comments that we received on that proposal. We actually have received over two million comments on that proposal. We are giving each of those comments their due consideration so that we make sure when we move forward with this rule that we get this rule right.

And while power plants are the largest source of carbon emissions in the industrial world, it's not the only source of carbon emissions. And many other sources also need to be part of a carbon solution. Now as you well know, renewable energy is a big deal. It's part of the answer. Combined heat and power, energy efficiency technologies, all of these, all of these are answers or potential answers that can significantly reduce greenhouse gases and improve the nation's air quality in general, while in the case of energy efficiency in particular, it can lower the total compliance cost to industry for complying with air regulations, and it can lower consumer bills.

Now I want to focus on this a little bit, because I know there are many folks here, again, from state and local areas, that work with us in a very focused way to try to address air quality challenges, traditional air quality challenges, and I want to talk a little bit about how EPA and the states are working together to identify solutions that not only address air quality challenges, like ozone, particular matter, sulfur dioxides, nitrogen oxides, volatile organic compounds, and address those issues in ways that also can reduce greenhouse gases.

Part of the challenge of climate change is to not look unilaterally at problems or solutions, but look more comprehensively at ways in which we can do more than one thing at once. And that's what we're looking at in our air world, because it's challenging to meet, consistently meet our air quality goals. In fact, we are not meeting those consistently, and we need to work together, so we keep our eye on all of those prizes.

Now we need more opportunity to integrate energy efficiency, renewable energy, combined heat and power, into our programs as a complement to traditional air pollution control equipment. Air pollution control equipment is wonderful. I hope it continues to evolve. It will open up many opportunities for public health improvements.

But there's also an opportunity at the front end to think about how you do your business differently, how you supply energy differently to your community, to your industries in your state. And that is the challenge we need to face. We need to build incentives in our rules, and we're doing that, rules like MATS, which is the Mercury and Air Toxic Standard, and our recent boiler rules. We're building in encouragements to look at these types of technologies.

We're partnering with the Department of Energy to bring technical assistance to our regulated community, and we're challenging them to look at reducing emissions from these big boilers that are in industries that are highly emitting and highly inefficient. Instead of putting a piece of control on the end that makes it more inefficient, let's look at the cost effectiveness of purchasing a new boiler. Invest in US manufacturing. Make yourself more efficient. Look at the overall cost benefits of doing that, not just to your company, but to the neighbors, and for the people that buy your products and that you service.

There are ways in which we are partnering with DOE in their industry centers to be able to provide tools that can help make the smartest choices. People are complying with those rules.

And I want to mention one rule in particular. That rule is the Oil and Gas NSPS that we put out. I don't know if you all remember that rule, but we put it out just a, not too long ago. And it actually looked to regulate toxic emissions from the oil and gas sector, and in particular, it was looking at information we had from gas well installations, in particular wells that are being hydrofracked, and we looked at the emissions from those, and we realize that volatile organic emissions were emanating from being emitted from those wells, and that we had an absolute opportunity not just to address an issue that was a significant public health concern, that was a public health concern in and of itself, because toxic pollution causes cancer, but volatile organic compounds, which are the toxics in question, also create a precursor to ozone. So it is a significant public health issue.

And when we looked at it more comprehensively than end of the pipe, we realized that there were many developers that were already capturing the emissions. And you know what they called it? Products. Because the emissions of volatile organics were in with methane, natural gas, that was the product that was being produced. So we, instead of looking at just end of pipe controls, we began to work with the industry to understand what they were doing, to gather this product, and instead of emitting a pollutant, they are gathering product and saving money.

That is what you call co-benefits, ladies and gentlemen. That is the future of our climate efforts, is not to think about climate, but think about what matters to people in every aspect of their lives, and figure out how you apply that to your individual decisions.

When the oil and gas rules are fully implemented, they'll reduce between 1 to 1.7 million tons of methane each year, which works out to be roughly the equivalent of emissions from the electricity used by 2.8 to 4.9 million homes. Now every time we do this, we're getting better, right? These numbers are going up. These are big co-benefits, and they're ones that if we just open our eyes, if we work and look at what the best industries are doing, what the best management practices are, what the real costs are, we can find ways of solving these problems.

But EPA knows, just as you do, that there's a significant role for clean energy for states to use as a way to meet their air quality objectives, but EPA has not always laid out the most certain path to be able to do that. I probably yelled about that more when I was in Connecticut than any human being had before. Now I'm hearing myself, which is good. We are actually doing everything we can to make it easier for states themselves to incorporate energy efficiency and renewable energy into their state implementation plans.

If you look, and if you go back and you talk to your own energy world, you will know that they probably have heard me say that more than you have, because we are every energy conference known to man to talk about these issues, and to try to bridge the gap between the energy and environmental worlds, so that people can have nice electricity to turn on, and they can also have heat to keep them warm, and they can also have clean air to breathe. That is our ultimate goal, is we're servicing human beings, not particular aspects of their bodies, right? We're trying to get it all done.

[Laughter]

What we put out was Energy Efficiency and Renewable Energy SIP Roadmap. Now I know that may not sound like a glamorous title, but it is music to my ears, because what it actually says is that you don't just have to take credit for control strategies or for constructing different types of power plants. You can actually take credit for renewable energy. You can take credit for energy efficiency programs. You can take credit as you're looking at how to meet traditional air quality requirements that states are under that they periodically have to plan for and make progress on.

And that is because what we're doing now and what we know we have to do is we're building partnerships with the states. We're building a level of trust to understand that they know their business well, and if they can tell us what their business is and use analytical tools that can help us defend that position when it might get challenged, we can find the best answers that are tailored to the issues and the localities that are being impacted. That's so that we can find a way, instead of having national solutions, that we use the national rules to open up localized solutions, to open up opportunities for states to use all the flexibility, the ingenuity, and the innovation that you have shown can be done, and just simply get it done.

Now I think that I want to close at this point in a couple of different ways. I mentioned before that information is power. I will tell you a couple more powerful things at your fingertips. One is that we have recently put out the latest round of the greenhouse gas reporting program information. Check it out. It's not just about the information that we gathered from industry sitting on a webpage somewhere. It has actually an interactive tool. If you want, you can have your teenagers go on it and explain it to you.

[Laughter]

Mine did. No, I don't, it's information from about 8,000 facilities. This is the second year, but it's also a year in which we have data from the oil and gas sector, so check it out. Power plants are still way up there. Oil and gas is a distant but significant second. Check it out, only because it's available to you, to community representatives, to individuals who just care about these issues. You can get the data, and you can sort it by state, by facility, by its community location, by its industrial sector, by the type of greenhouse gas that's emitted. You can find information there to help inform yourself and to make better decisions, and so I encourage you.

Now the second thing I wanted to make sure you knew, and this is again information, this is our second Climate Change Indicators Report. This is the 2012 report. We have recently released this as well. It not only has a really sad picture of daffodils peeking up through snow, it actually has 26 indicators. This report is produced by climate scientists in collaborate -- at EPA, but in collaboration with all of the scientists across the U.S. government.

This looks at the 26 indicators that are indicators of impacts from climate changes and causes of climate, and it tracks those indicators. Now I know we all struggle with how to communicate the impact of climate change. We struggle to make it relevant to people, because it is such a worldwide issue that in many ways it's difficult for us to communicate. This will help you. This is very easy language to understand what climate is, to understand what's impacting it, and to understand why there is concern if we don't move now and aggressively to address climate change.

So take a look at it. You know, it was produced for you. It wasn't produced for EPA. We really want to make sure it's used.

The second thing that I want you to, the third thing -- sorry, I'm losing count -- that I want you to take a look at is we've recently issued a report on adaptation. It's a U.S. governmentwide adaptation plan. I want you to check it out and see what you think and provide us comments. We know that the challenge of adaptation is not going to be won by any individual community or any individual state. That is a challenge that needs all of us to work together in a collaborative way. We have seen that over and over again, the costs associated with being unprepared, for not being resilient.

In there, you will see EPA and the work that we have done that doesn't just look at how we are adaptive in the outside world, but how EPA adapts itself to think about integrating the challenge of climate into the work that we do. If you think about it, the challenge of clean water and clean air and clean land is a challenge that will be impacted tremendously by changes in climate.

And as we're thinking about a path forward, to be successful in meeting our mission, we would be, have a serious omission if we didn't factor climate change into all of those decisions and the equations that we are looking at as we're making those decisions. So take a look at it. Give us some feedback. It's enormously important for us to work on that issue together.

And looking forward, the president, again, has made it very clear, climate change is a priority. We owe it to future generations to confront it. All of us here today know with certainty that it'll take more than a village for this nation to successfully address the challenge of climate change. It'll take at a minimum governments working hand in hand at every level, federal, state, and local, with the energy and enthusiasm and innovation that we have used in the past to address significant issues.

And we need to build on the lessons that we have learned, some of them that you have taught us with your courage and with your investments and your resource dedication. And we need to continue to make progress moving forward.

You folks have been on the front lines of climate change. You've seen firsthand the impacts that it can bring. Your states' renewable fuels policy, your renewable electricity and energy efficiency policies, they've all helped to reduce carbon pollution, while supporting economic development in your communities and in your states. And you've helped in that effort to transition to a clean energy economy.

We need to shout in every village across the United States that this has worked out well for all of us, that it should be celebrated, and hopefully replicated. Over the coming years, EPA needs your continued partnership, and we fully intend to be a good partner and to do what good partners do. We'll earn your trust by working hard, by listening well, by supporting you with the tools that you need for the jobs you want to do, and we'll provide you with the national leadership to help keep your states, your communities, and the American families we all serve safe, healthy, and secure. Thank you very much.

[Applause]

[End of Audio]