Build Back Better Act

Floor Speech

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Mr. PALLONE. Madam Speaker, I rise in support of our historic legislation, the Inflation Reduction Act of 2022 (IRA or the Act). The Act establishes incentives and actions to reduce greenhouse gas (GHG) emissions and other forms of health-harming pollution throughout every major sector including transportation, electricity production, industrial, manufacturing, and buildings while also lowering energy costs so Americans across the country will see savings. At the same time, the Act reinforces the longstanding authority and responsibility of the Environmental Protection Agency (EPA) to regulate GHGs as air pollutants under the Clean Air Act (CAA). The IRA combines new economic incentives to reduce climate pollution with bolstered regulatory drivers that will allow EPA to drive further reductions under its CAA authorities.

The IRA contains the most important and far-reaching amendments to the CAA in more than a generation. EPA's responsibility to address GHG air pollution under the CAA is long-standing and time tested. By passing the IRA, Congress underscores and reinforces that responsibility. To the extent the Supreme Court has suggested otherwise under the so-called ``major questions'' doctrine, the IRA is abundantly clear.

As Chairman of the Committee on Energy and Commerce (the Committee), I would like to specifically address the provisions related to EPA rulemaking within the Committee's jurisdiction. These specific provisions include those provisions supporting EPA rulemaking to address climate change, providing clean energy incentives that EPA may take into account in developing regulatory requirements, and imposing additional requirements that EPA must implement through rulemaking. I am proud to say that many of these provisions were developed by the Committee, so I would like to explain how Congress intends these provisions to work, state our intent for EPA action under them, and clarify the legislative requirements.

The IRA is expected to reduce GHG emissions by approximately 40 percent from 2005 levels by 2030. The Act achieves this objective in large part by amending the CAA to give EPA the authority and funding to collect fees on excess methane emissions from the oil and gas sector, and to spend tens of billions of dollars to provide grants, make assessments, conduct monitoring and outreach, provide technical assistance, and undertake other actions to reduce GHG emissions. (See Sections 60101, 60102, 60103, 60114, and 60201, which add new CAA Sections 132, 133, 134, 137, and 138, respectively). It also provides EPA with additional funding to support rulemaking under the CAA to reduce GHG emissions.

Of particular note, Section 60107, the Low Emissions Electricity Program, adds CAA Section 135, which directs EPA to conduct an assessment of the reductions in GHG emissions that result from changes in domestic electricity generation and use that are anticipated to occur on an annual basis through fiscal year 2031. This assessment should take into account both changes in the carbon intensity of electricity generation (including reductions in fossil fuel-fired generation and increases in renewable and other low- or zero-emitting generation, including hydrogen), and changes in the amount of electricity use (including increases in use due to electrification of mobile sources and other beneficial electrification and decreases in use due to energy efficiency measures). Section 135(a)(6) provides $18 million for EPA ``to ensure that reductions in greenhouse gas emissions are achieved through use of the existing authorities of this Act,'' incorporating the assessment under Section 135(a)(5). Congress intends for EPA to have significant discretion regarding how to incorporate the assessment under paragraph (5) in its actions under the ``existing authorities.''

These ``existing authorities'' include CAA Section 111 for stationary sources (among other provisions), which, since its enactment, has provided EPA extensive authority to promulgate impactful regulations that reduce GHGs, from, but not limited to, the electric power sector, the industrial sector, and the oil and gas sector as well as CAA Section 202 and other provisions under title II for mobile sources. These and other CAA provisions give EPA broad authority to address air pollution problems, including those that may not have been well understood at the time of enactment, and to do so on the basis of novel mechanisms as may be appropriate for the air pollutant and industry at issue. Congress recognizes that regulation of GHGs in particular may present novel and complex issues that may require innovative regulations and the enormity of the climate crisis will require that the regulations be impactful while adhering to statutory requirements.

In providing additional funding under Section 60107, Congress intends that EPA construe its authority under the existing CAA authorities broadly, consistent with the requirements of those authorities, so EPA can promulgate impactful and innovative regulations, as appropriate. Congress believes that EPA has sufficient expertise in the various industries that may be affected, including the electric power sector, to promulgate these rulemakings. Congress' understanding that the existing CAA authorities give EPA broad authority to promulgate innovative and impactful regulations to reduce GHGs is consistent with the additional funding that the IRA gives EPA under the CAA to issue grants that promote innovative technology to reduce GHGs. Congress recognizes that promulgating and implementing GHG regulations may be resource-intensive, and the additional funding under Section 60107 will allow EPA to prioritize these regulations and devote the necessary resources to execute them.

EPA is currently undertaking rulemaking under CAA Section 111 to regulate methane from the oil and gas sector and issued a proposed rule in November of 2021. (86 Fed. Reg. 63110 (Nov. 15, 2021); hereinafter ``EPA's proposed methane standards''). As previously noted, CAA Section 111 is one of the ``existing authorities'' funded by Section 60107 of this Act. Section 111 is also one of the primary tools in the CAA for regulation of air pollutants from both new and existing stationary sources. (See H. Rept. 117-64, at 6 (footnote 19), 10).

Section 60113 of the IRA, the Methane Emissions Reduction Program, recognizes the importance of EPA's proposed methane standards and ongoing rulemaking to regulate methane from the oil and gas sector. Specifically, the new CAA Section 136 authorizes the Methane Emissions and Waste Production Incentive Program for Petroleum and Natural Gas Systems (the Methane Program), which establishes a waste emissions charge for ``applicable facilities'' and provides an exemption from the waste emissions charge based on compliance with EPA's proposed methane standards, if finalized. In including this exemption, Congress recognizes and reaffirms that regulation of methane from both new and existing oil and gas sources, including those located in the production, processing, transmission, and storage segments, is clearly authorized under CAA Section 111. And by applying the Methane Program to facilities located in the production, processing, transmission, and storage segments that would also be regulated by EPA's proposed methane standards, Congress recognizes that the regulation of methane emissions from these facilities is necessary for public health and welfare, including for climate protection. (See H. Rept. 117-64, at 3-5).

As part of the Methane Program, we are establishing a waste emissions charge exemption for applicable facilities that are in compliance with applicable emissions standards in effect pursuant to CAA Section 111(b) and pursuant to plans under CAA Section 111(d). The basis for this exemption will be a determination by the EPA Administrator that certain conditions are met before any applicable facility may qualify. First, the EPA Administrator must determine that CAA Sections 111(b) and 111(d) methane emission standards are in effect in all States where applicable facilities are located. Second, the EPA CAA 111(b) and 111(d) methane emissions standards must be finalized and in effect, and the Administrator must determine that those final standards will result in equivalent or greater reductions than EPA's proposed methane standards. Once the Administrator makes the appropriate determination, the exemption may be applied to any applicable facility subject to and compliant with methane standards pursuant to CAA Section 111. If any condition is not met after the Administrator has made the determination, applicable facilities will no longer qualify for the exemption and will again be subject to the charge.

Notably, the collective emissions from new or existing sources at an applicable oil and gas facility may be subject to a mix of standards under CAA Sections 111(b) and 111(d). Therefore, to qualify for the exemption, any new sources at the applicable facility should be in compliance with any applicable new source standards, and any existing sources located at the applicable facility should be in compliance with any applicable standards in a plan effective under Section 111(d).

Another key purpose of the Methane Program is to encourage the development of innovative technologies in the detection and mitigation of methane emissions, particularly to support the mitigation of impacts on low-income and disadvantaged communities most affected by pollution from oil and gas facilities. New CAA Section 136(a) provides funds to incentivize methane mitigation and monitoring, including to provide financial and technical assistance to reduce methane and other GHG emissions from petroleum and natural gas systems, mitigate legacy air pollution from petroleum and natural gas systems, and provide support for communities. In particular, Section 136(a)(3)(C) provides funds for supporting innovation in reducing methane and other GHG emissions and waste, and Section 136(a)(3)(E) provides funds for mitigating health effects of methane and other GHG emissions and legacy air pollution from petroleum and natural gas systems in low-income and disadvantaged communities. Additionally, new CAA Section 136(a)(2) and Section 60105(e) of the IRA provide funds for methane emissions monitoring under CAA Section 103 (a) through (c). And new CAA Section 138(b)(2)(A) provides funds for community-led air and other pollution monitoring, prevention, and remediation, as well as investments in low- and zero- emission and resilient technologies and related infrastructure and workforce development that help reduce GHG emissions and other air pollutants.

Finally, EPA's proposed methane standards solicited comment on a program to require owners and operators of oil and natural gas facilities to investigate and mitigate so-called ``super-emitter'' emission events upon notification by a community, federal or state agency, or other third party of an emission event above a defined threshold. The funds provided by new CAA Sections 136 and 138 and Section 60105(e) of this Act could be implemented to support third- party monitoring activities using advanced methane detection technologies consistent with such a program, if finalized by EPA.

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