Kathleen McGinty, the former chief of President Clinton's Council on Environmental Quality, joins OnPoint to discuss yesterday's New Source Review decision -- a major defeat for the government. McGinty, now secretary of the Department of Environmental Protection in Pennsylvania, also talks about the upcoming Senate debate on global warming and the specific effects that the plans may have on her heavily industrial state.
Darren Samuelsohn: Hello and welcome to OnPoint. I'm Darren Samuelsohn. Joining us today in the E&ETV studios in Washington is Kathleen McGinty, the secretary of the Pennsylvania Department of Environmental Protection. Ms. McGinty thanks for being here.
Kathleen McGinty: Thanks very much. Good to see you.
Darren Samuelsohn: Good to see you as well. Now, you have two hats I guess that we're going to ask for you to put on here today.
Kathleen McGinty: OK.
Darren Samuelsohn: As the secretary of the Pennsylvania Department of Environmental Protection and also in your time at the Clinton administration, which was I think seven years, is that right?
Kathleen McGinty: Yes, it was.
Darren Samuelsohn: Now a lot of the things that you did during the Clinton time is still resonating with us today and one of them just landed on our desk this week. It was a big court decision, 4th Circuit U.S. Court of Appeals in Richmond, Virginia, ruled against one of the biggest power plant enforcement cases you brought while you are at the Clinton administration, against Duke Energy. Can I get your reaction? Why do you think the court ruled against you?
Kathleen McGinty: Well, in some ways, first of all, it's one circuit. We'll see what the other circuits do and the D.C. Circuit's going to be taking up a similar case soon. Having said that, in some ways it's a blip on the radar screen and what I mean by that is the new set of Clean Air Act requirements almost obviates NSR as a big issue. In other words, the reductions that are needed now are so large no plant will be spared. All plants will have to be scrubbed or repowered. So in some ways the NSR piece is going to be less relevant as we go forward.
Darren Samuelsohn: Do you think these enforcement cases that you brought back in 1999 are still very important?
Kathleen McGinty: Oh, sure. They're solid foundational cases and actually have been the foundation from which this next round of Clean Air Act requirements has evolved and also, importantly I think, have been a catalyst to the discussion about why don't we do a multi pollutant approach and try to organize our requirements and our thinking? So from a lot of different perspectives they've been fundamental in moving us down the road now in clean air.
Darren Samuelsohn: Pennsylvania still has played a role. I think you guys were interveners in this case against Duke Energy.
Kathleen McGinty: We've been involved in a variety of federal cases. We're involved in now in challenging some of the changes to the Clean Air Act requirements that the Bush administration has put in place. So it's a busy time in terms of air quality.
Darren Samuelsohn: Take me back to what you were thinking back in 1999, in terms of filing the cases, as you just mentioned a moment ago. Could you have been thinking this far ahead, we're now six years ahead and where we are with the slate of rules that are in place today? Were you thinking back and that we need to get these piece by piece emission reductions?
Kathleen McGinty: No. Back then, in fact, in 1995 moving into 1996 is when we started the first major effort to try to do a multi-pollutant legislative effort. The only hiccup on that was that the numbers count, the numbers matter and we weren't able to reach agreement between ourselves and the industry representatives that were at the table. I think that's a shame because we would be much further along today, business would have had much more certainty in terms investments and I think air quality would be terrifically better than what we can achieve though a piecemeal approach. One strong example of that is there are lots of benefits that come from scrubbers. One of the major downsides is every scrubber reduces the efficiency of a plant, so if you want to talk about climate change and greenhouse gases, you've just made the problem worse.
Darren Samuelsohn: Ok. We'll jump to greenhouse gases in one second. I just want to keep on to something. If we had an industry attorney, sitting here next to you right now, they would say based on what you're saying that the Clinton administration reinterpreted the Clean Air Act. That never before were new source review cases brought and that it was in 1997, 1998, 1999 that you guys reinterpreted the Clean Air Act and now these court decisions are proving you wrong. What would your reaction be?
Kathleen McGinty: My reaction would be, look, you may have time because someone's paying you to litigate all of this over and over. My view is we have got both huge issues and huge opportunities before us. Where we're focused in Pennsylvania right now is in the global marketplace where fuel prices are going, where electricity prices will go as we remove rate caps. We're saying let's use the clean air challenges as an invitation to reinvent our power plants so that they not only produce clean electricity, but they can produce clean fuel and clean ingredients for chemical products as well, so advanced coal gasification and liquefaction. We're going to leave some of these clean air issues in the rear view mirror as we move to the next generation of technology. That's where my effort and energy is.
Darren Samuelsohn: Right. Were you thinking back in 1999, 2000, obviously you were planning ahead probably for now, we would be in a second Gore term, probably under what you were thinking. I mean were you thinking that far ahead in terms of what EPA regulations would be out right now and what Congress would be doing right now?
Kathleen McGinty: We were thinking both that we have to make dramatic progress on air quality. The asthma cases we see across the country, the issue of climate change, all of it means we have to make dramatic progress. On the other hand, we were also keenly aware then of emerging trends in energy issues, energy supplies and energy prices. We wanted to do something smarter. One, comprehensive, integrated set of requirements as it related to power plants. Disagreement over numbers, so here we are still litigating and here we are with industry facing multiple billions of dollars of required investments.
Darren Samuelsohn: This is the same thing that the Bush administration has been dealing with for its five years now in office and it put forward a plan back in 2001 or 2002, the Clear Skies Initiative as it's called and their bill is called. Now, without Congress really acting, they've had to put these into regulations. What's your sense, I mean you guys had a lot of the same issues didn't you?
Kathleen McGinty: Really three major problems with what's now the Clean Air Interstate Rule. The first one is it doesn't get us anywhere near where we need to be to meet our federal attainment standards. Second, for a state like Pennsylvania that's ahead of the curve as it relates to NOX reductions, this is an economic penalty for our state because competitor's states now are left off the hook. And third, it again is a piecemeal approach unless you have mercury and climate issues integrated into the picture you're going to be making not optimally smart investments.
Darren Samuelsohn: One of the biggest criticisms that I've heard about the whole mercury issue is you had eight years to put out a regulation on mercury. One came out, but it came out after the Supreme Court decision in Bush v. Gore and that was not even a decision to actually regulate, that was a decision that you should be listing mercury as a hazardous air pollutant. Why not speed that up four or five years before and put out a regulation?
Kathleen McGinty: Well, not to compare ourselves to the current administration, but we actually believed in science and thought that the science counted and that we shouldn't interfere in the conduct of good science. So those reports that led to the final mercury rule were done and were done at the time and pace of the scientists who were doing those analyses. If you ask the leaders in Congress who wrote those provisions that laid out what we were required to do, they will tell you, as they have said recently, "We met every milestone we were required to meet." But the shame of it all is that we are just now further behind the curve and because we do not have a coordinated integrated signal we're still not giving industry the certainty that they need to make smart investments for the future.
Darren Samuelsohn: How come the Clinton administration wasn't able to get a multi-pollutant bill through Congress in its time?
Kathleen McGinty: Well we were working to try to achieve some degree of unanimity or support between ourselves and industry and unfortunately we weren't able to agree on the numbers and some of the other elements and in the meantime what impressed itself upon all of us were some of these new source review violations. Frankly, once those pieces of litigation were filed that shut down the conversation. Industry couldn't put their numbers on the table anymore since there was litigation and nor could we. So unfortunately the litigation did have the effect of cutting off that conversation.
Darren Samuelsohn: And now with the litigation where it is and losing some of these important cases you lost, not you, but the government lost in Alabama Power last week in a big decision and losing here in the Duke case. I mean, does that spur Congress and does it maybe tip the scales into industry's hand now in terms of going forward?
Kathleen McGinty: Well, it might, but again, I don't think that New Source Review is really the driver. I think whether or not those decisions come out in a different way in the different circuits, the real driver here is the next round of air quality requirements. In Pennsylvania alone we're looking at up to $15 billion of required investments just to make those standards. For us, we should be taking that money and investing it in the next generation of energy infrastructure that gives us clean electricity, but also helps to insulate us from these global oil and gas trends that are just crushing our economy.
Darren Samuelsohn: Talking about energy and oil and gas, we're on an energy bill right now on the Senate floor and climate change is going to be an issue next week as the Senate starts to debate. It looks like there's going to be at least three amendments, maybe more, maybe a few less, at least three it sounds like. Which one do you think has the best chance of passing? We've got this McCain-Lieberman approach. We've got Senator Bingaman talking with Senator Domenici about something and Senator Hagel looking to try and codify some of the Bush administration approaches. Which one do you think has the best chance?
Kathleen McGinty: Well, I think that the National Energy Commission work, which is now being looked at by Senators Bingaman and Domenici, is really interesting in terms of the diversity of players that have come to the table. I've spoken to our own United Mine Workers who are active in Pennsylvania and said, "Hey, what do you think about it?" They think that it's an approach that makes sense from their point of view, so in terms of if I had to take some bets, some combination of McCain Lieberman with what the National Energy Commission has put forward is an exciting new set of players on the scene here.
Darren Samuelsohn: And you're obviously representing a Democratic administration in Pennsylvania, but you have two Republican senators. You mentioned that you visited Senator Santorum when you were here, where is he and where is Senator Specter on this?
Kathleen McGinty: Well I can't say that we spoke about particular pieces of legislation, but they seem equally positive, as I am, about our prospects to be a leading clean energy state. To talk about all of this in terms of our opportunity to build infrastructure in the state that powers our economy in a clean way going forward. We're very proud now to have a very forward looking clean energy portfolio standard in the state and we think with these new clean air requirements it's an invitation for us to build infrastructure that will be good for our chemical industry, for our agricultural industry and clean up our air at the same time.
Darren Samuelsohn: You've watched Capitol Hill I'm sure for quite a while, you used to work on the Hill, Senator Domenici goes along with Senator Bingaman on this national commission energy policy plan --
Kathleen McGinty: That's good news.
Darren Samuelsohn: Does he bring along a lot of Republicans with him too?
Kathleen McGinty: Well I think that Senator Domenici, like Senator Bingaman, is a very respected leader, not only in Senator Domenici's Republican caucus, but also as an authority on energy issues. If he puts his weight behind a measure like that I think it will carry an awful lot of significance for others who are trying to make up their mind.
Darren Samuelsohn: I hate to keep bringing back the past, but let's talk about the past for a second.
Kathleen McGinty: Why sure.
Darren Samuelsohn: Back in 1997 President Clinton advocated taking the U.S. down the road with global warming and climate change and he wanted to bring greenhouse gas emissions I think down to 1990 levels by 2012 and enviros of the time attacked you guys. Carl Pope was on PBS's news hour and he said, "This is cheap insurance. We can and should afford it. We are dismayed and disappointed that the administration has proposed an insurance policy that really won't protect us." The enviros were attacking you in 1997, now here we are eight years later and it sounds like they haven't gotten anything on this issue. Do you blame them for not helping you in 1997?
Kathleen McGinty: Well, I don't blame anyone. I think though that there was some overplaying of their hand and we could've had, I think, a lot more accomplished if the progress would've been realized in what had been proposed. In terms of not only the numbers that were on the table, but the uniquely American innovations. The idea that climate would be taken on using market mechanisms and using a comprehensive approach with flexibility. Those were things that the United States brought to the table and it's a shame to see that other countries are running with it. They are now creating the markets where those greenhouse gas credits have real value. We need to get back in front of that curve instead of getting run over by.
Darren Samuelsohn: Did Senator Kerry miss an opportunity in the 2004 election to make climate change an issue do you think?
Kathleen McGinty: I think he did a very good job of articulating the broad spectrum of environmental issues and importantly, instead of talking about them as something that's harmful to our economy, to say this is our invitation to invent. That's what America's good at. We are builders of technologies. We are creators of ideas. Why are we running and hiding?
Darren Samuelsohn: But you --
Kathleen McGinty: And since when is efficiency and productivity a bad idea? That's what taking on climate change is all about. He did a great job of putting a positive message behind the issues. That's where we should be instead of wringing our hands. We ought to be building new capital, plants, equipment, cars and leading the marketplace again, instead of being left far behind.
Darren Samuelsohn: You wouldn't blame environmental issues as costing Senator Kerry the election in 2004 or Vice President Gore the election in 2000?
Kathleen McGinty: Not at all. I mean if anything, I think the American people are optimistic by nature and when they hear a message, "I need you. We have a challenge, but by golly Americans are smart, inventive, productive. Let's all join together and meet the challenge." That's only a win and I think both for Senator Kerry, for former Vice President Gore, those were messages that resonated very positively.
Darren Samuelsohn: On the global warming issue one more time, Governor Richardson, one of your former colleagues, New Mexico, and Governor Schwarzenegger have both laid out plans for their states, for achieving greenhouse gas reductions. Pennsylvania and Governor Rendell are part of something in the Northeast, but I know that Pennsylvania I think is an observer of this plan. Can you give us a sense of what does it mean to be an observer as opposed to actually --
Kathleen McGinty: Well the process was well started before we came into office about two years ago, but there are particular elements of it for which we have particular expertise. So as the discussion in this regional greenhouse gas initiative has evolved to the point where the leaders of it have said, "You know, we're interested not only in regulating power plants, but maybe seeing if there are greenhouse gas offsets." Well that's been our message, so now we have been invited to the table and we're actually chairing some subgroups of the RGGI initiative as it's called that are looking at things like coal mine methane projects, soil sequestration projects, other approaches to the greenhouse gas challenge that represent an investment in key parts of our economy. That's where we're interested.
Darren Samuelsohn: Does something like what Senators McCain and Lieberman are trying to do, would that have a drastic effect on the economy of Pennsylvania?
Kathleen McGinty: Positive.
Darren Samuelsohn: A positive effect?
Kathleen McGinty: Positive effect.
Darren Samuelsohn: How do you say so?
Kathleen McGinty: Well first of all it's a smart approach. It's an economy-wide approach. It uses business sense to get the job done. For Pennsylvania, we're a huge agricultural state. Our farmers grow carbon sequestration. Second, we have a huge reservoir of coal mine methane. Every time you capture some of that, 21 times the global warming protection that you get if you are going after CO2 at a power plant. For us it would represent a big investment in what Pennsylvania has to offer.
Darren Samuelsohn: Ms. McGinty we're going to have to close it at that. We didn't even get to water or any of the other issues, but that just means we're going to have to have you back on the show.
Kathleen McGinty: Thanks for the opportunity Darren.
Darren Samuelsohn: Thank you very much.
Kathleen McGinty: Good to see you.
Darren Samuelsohn: Good to see you too. Until next time, this is Darren Samuelsohn for another edition of OnPoint. Thank you very much.
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