Statements and Speeches

Speech on Energy and Environmental Issues to the Group Against Smog and Pollution
November 2, 2002

By Henry A. Waxman

Thank you for inviting me to speak here tonight. GASP has a strong record of working for clean air for the citizens of southwestern Pennsylvania. In fact, you may not fully appreciate how important you are. The progress we’ve made on air quality over the last 30 years has been driven by citizen groups like GASP, who have come together to demand clean air and a healthy environment.

As you all know, despite our successes, we continue to face big challenges. Air pollution still damages our health and causes tens of thousands of premature deaths a year, especially affecting children and the elderly. Human activities emit greenhouse gases that are changing the climate of the planet. Global warming is exacerbating droughts and storms, allowing the spread of tropical diseases such as malaria, and destroying fragile ecosystems.

But experience shows that when we tackle tough environmental challenges, we really can make things better - for the environment, for our communities, and for the country as a whole. As I’ve fought for cleaner air for over 25 years, I think I’ve heard every argument industry can make about why they shouldn’t have to reduce pollution. But the record of our environmental laws shows that the naysayers are wrong. A cleaner environment is good for our health and the economy.

The Clean Air Act Amendments of 1990 provide a great example. In 1990 we were determined to reduce power plant emissions that cause acid rain, which has damaged forests and killed lakes throughout the Northeast. The coal and utility industries responded then just as they are fighting action on global warming now. They claimed that acid rain wasn’t a problem and reducing emissions from power plants would wreak economic havoc, costing 4 million jobs and up to $7.4 billion a year. Now the Clean Air Act acid rain program is in place, and even the Bush Administration touts it as a model. Costs have been only a quarter of what industry predicted, and the value of human health benefits alone are projected to be ten times the annual costs. A ten-to-one benefit-cost ratio is an environmental and economic triumph, and is a far cry from the disaster that opponents predicted.

In the 1990 amendments we also tackled chemicals that destroy the atmospheric ozone layer, which protects the planet from ultraviolet radiation. Industry representatives stated that phasing out these chemicals was scientifically unjustified and would cause severe economic and social disruption. They said we would be forced to turn off refrigeration equipment in supermarkets and air conditioners in hospitals. In fact, there is now an international consensus on the science of ozone depletion, the level of ozone-depleting chemicals in the atmosphere is gradually dropping, and if we stay on track, the hole in the ozone layer may close by 2050. We have successfully phased out many ozone-depleting chemicals without any of the terrible consequences predicted by industry.

The 1990 Clean Air Act Amendments also included measures for cleaner cars, cleaner fuel, and control of toxic air pollutants, among others. In contrast to the dire predictions, as the Act was implemented in the 1990s, the economy expanded, unemployment rates fell, and the air has become dramatically cleaner. Our three decades of experience in environmental regulation confirm that we can successfully clean up the environment and enjoy economic benefits. This is important to remember as we consider today’s air pollution challenges.

And it is important to remember as we debate one of the most critical issues before Congress: how we produce and consume energy.

I agree with President Bush that the United States urgently needs a national energy policy. But subsidizing energy industries is not an energy policy. An “energy policy” is a plan for generating, using, and conserving energy in a way that provides the maximum benefits to the people of this country. This means that we have to consider all aspects of the issue, including how we get energy and how we use it. If a particular source of energy contributes to our kids’ asthma, that’s a cost of using that source of energy. We must account for health and environmental effects in choosing how to produce and use energy.

Here’s an example of what we shouldn’t do. Right now, we run our cars on lots and lots of gasoline. Although all independent experts agree that this is a major problem, the energy bill developed by the Republican majority in the House encourages our dependence on fossil fuels. It assumes that we keep driving the same vehicles, the same way, on the same fuel. Rather than trying to reduce demand, the bill’s approach is to increase oil production, and the bill tries to achieve this by giving the oil companies tax breaks and exemptions from environmental laws. This approach may produce additional oil, or it may just increase oil companies’ profits. Either way, it has tremendous costs.

In fact, as it was adopted in the House, the energy bill’s subsidies to the oil industry alone will cost taxpayers over $19 billion. That’s a huge amount of money that could go towards health care, schools, parks, or national defense, but instead is going to very large oil companies.

A policy that exacerbates our heavy dependence on oil also creates grave risks to national security and higher costs for national defense. Saddam Hussein is powerful and a threat because other countries want his oil.

An oil-based energy policy is also terribly damaging to the environment. Oil drilling threatens to destroy pristine wilderness areas and critical wildlife habitats in the Alaskan arctic, across the western United States, and in other fragile environments, such as tropical rain forests. Offshore oil development and tanker spills damage coastal habitats and beaches. Oil-based transportation emits approximately a third of the air pollution nationwide. This includes the pollutants that form smog, the fine particles that exacerbate respiratory and cardiopulmonary diseases, and air toxics, which contribute to cancer risk. And burning gasoline emits large quantities of carbon dioxide, which is causing global warming.

A sound energy policy must account for all of these impacts. And once you consider the true costs of using oil, it is clear that our plan for the future must include a transition to using less oil. There are many ways to do this. Automakers have the technology right now to improve motor vehicles’ fuel economy dramatically. But the nation’s fleet-wide fuel economy hit a 20-year low last year. Just this week, EPA reported that the average fuel economy for the new 2003 model year vehicles is about 6% worse than what we achieved back in 1987. And only 4% of the new vehicles get more than 30 miles per gallon, even though they can meet this with readily available conventional vehicle technology. There’s no question that the manufacturers have continued to improve almost every aspect of vehicle technology since the 1980s. But on fuel economy, we’re stuck in 1982.

The reason is that the automakers don’t pay a penny when we fill up the tank. Without stricter fuel economy standards, also known as CAFE standards, automakers simply don’t have the incentive to improve efficiency. Tighter CAFE standards are critical to a sound energy policy.

We should also encourage new technologies. One exciting example is the hybrid vehicle technologies that are being demonstrated here tonight, which can run more than twice as far on a gallon of gasoline than the average vehicle. A forward-looking energy policy would provide incentives not for drilling oil, but for developing and using new technologies. We should give consumers tax incentives for purchasing cutting edge products such as hybrid vehicles to help move these vehicles into the market. And we should support industry in taking real risks to develop breakthrough technologies such as fuel cells.

A sound energy policy would take a similar approach in other areas, such as electricity production and use. As you know well in this area, generating electricity from old, heavily polluting, coal-fired power plants damages our health and the environment. Air pollution from these plants contributes to asthma attacks, lung disease, and heart attacks. The plants emit mercury, which is highly toxic, can cause birth defects, and accumulates in fish, prompting consumption warnings. Emissions from these plants also cause acid rain and contribute to global warming.

A good energy policy would aim to reduce these harms by cleaning up old power plants and developing renewable energy sources. Unfortunately, the energy bill before Congress ignores air pollution impacts from power production. And meanwhile, the Bush Administration has announced its plans to weaken the Clean Air Act’s regulatory requirements on power plant emissions.

The energy bill adopted by the Senate does include an important provision to increase renewable energy production. The “renewable energy portfolio standard” would require each utility to generate a certain percentage of its electricity supplies from wind, solar, biomass, or other renewable sources of power.

Our policy choices on electricity should also address what we learned from the energy crisis in the West last year. One lesson is that we must design electricity policies very carefully and enforce the rules. Otherwise, consumers will get price-gouged.

At the height of the energy crisis, spot market electricity prices in California had leaped from $30 per megawatt/hour in 1999 to as high as $3,800 per megawatt/hour. Natural gas prices rose as much as twentyfold, from about $3 per million BTU in December 1999 to as high as $60 per million BTU in December 2000. Yet peak demand had not increased over that time. It seemed obvious to me that the energy companies who control supplies were manipulating the energy markets to raise prices. But Vice-President Cheney and many others strongly rejected my analysis. They blamed California for creating the problem by failing to build power plants, regulating air pollution, and adopting a flawed approach to electricity deregulation. We now know that Enron, El Paso Natural Gas, and other energy companies withheld supply, committed fraud, and manipulated the Western energy markets to send prices sky-rocketing. Consumers lost billions of dollars as a result. Any new electricity policies must protect against the demonstrated potential for market manipulation.

We also learned from the Western energy crisis that energy efficiency and conservation can make the difference. Efficiency measures are often the cheapest and fastest way to increase supply, and in California, they kept the lights on last summer. In just six months, the state reduced its energy consumption by 10%. The state achieved these reductions even though California was already one of the two most energy-efficient states in the nation.

One way to encourage efficiency is to set national standards for efficient appliances, which save consumers money over the life of the appliance. The energy bill makes some modest progress in this area, but ignores many other opportunities to advance appliance standards that would save both energy and money.

We should also require utilities to obtain electricity savings through programs that reduce demand. There are many cost-effective programs that utilities could establish to help their customers save energy. The electricity produced through efficiency measures is often much less expensive than building a new power plant, expanding the transmission lines, and upgrading distribution lines. These programs can keep rates down while enhancing reliable electricity supplies. But the energy bill does nothing in this area.

All of the actions I have discussed should be in a national energy policy. Unfortunately, the energy bill currently before Congress is a lost opportunity. Both Houses of Congress have adopted versions of the bill, and a Conference Committee has been negotiating a final version.

The energy bill adopted by the House Republicans is based on the energy policy developed by Vice President Cheney’s energy task force. As others have said, this is a great energy bill for the 19th century. It’s also a fabulous corporate welfare program for oil and gas companies, the coal industry, the nuclear industry, utilities, and the auto industry. But the bill completely ignores this country’s energy needs for today and the future. The energy bill adopted by the Senate Democrats is better, but also inadequate. And thus far, the product of the ongoing negotiations does almost nothing to improve our energy situation.

For example, instead of reducing our dependence on oil, the negotiated energy bill extends loopholes in the CAFE standards to make fuel economy worse. The Republicans in the House have strongly rejected a renewable portfolio standard to increase electricity from renewable sources. In fact, the House Republicans pretend that global warming does not exist - they have stripped references to global warming out of the Senate energy bill and they refuse to accept even modest provisions to track emissions of greenhouse gases.

Prospects for the bill after the election are uncertain. After several months of negotiations, the majority of the conferees have agreed upon some provisions, but have failed to resolve the most contentious issues. These include drilling in the Arctic National Wildlife Refuge, Senate provisions to address global warming, deregulation of electricity, and the Senate mandate to include ethanol in gasoline.

My hope is that this energy bill will simply die. Doing nothing would be a far better outcome than enacting this deeply flawed legislation.

But ultimately, we cannot measure our success by the bad legislation that we keep from being enacted. We need a positive energy bill that avoids energy industry give-aways and works toward a future of clean, safe, and renewable sources of energy.

This won’t be easy. The energy industry gives enormous campaign contributions and has great influence in Washington. But I have seen first-hand what groups like GASP can achieve when they insist on action from their elected representatives. When we enacted the 1990 Clean Air Act, citizen groups and those of us who are your allies in Congress successfully overcame the united opposition of the energy, chemical, oil, automobile, and other industries.

Next Congress, we will need a similar push if we are to enact meaningful energy and air pollution legislation. I look forward to working with you on this.