TESTIMONY OF J. DEXTER PEACH, ASSISTANT COMPTROLLER GENERAL, GENERAL ACCOUNTING OFFICE, ACCOMPANIED BY DOREEN STOLZENBERG, SENIOR ATTORNEY, OFFICE OF GENERAL COUNSEL; HON. LEE M. THOMAS, ADMINISTRATOR, ENVIRONMENTAL PROTECTION AGENCY; JEFFREY R. MILLER, DEPUTY ADMINISTRATOR, NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION, ACCOMPANIED BY RICHARD D. MORGAN, EXECUTIVE DIRECTOR, FEDERAL HIGHWAY ADMINISTRATION, AND FRITS WYBENGA, DIRECTOR, BULK CARGO SECTION, HAZARDOUS MATERIALS BRANCH, U.S. COAST GUARD; AND NICK NIKKILA, VICE PRESIDENT, STATE AND TERRITORIAL AIR POLLUTION PROGRAM ADMINISTRATORS

Mr. PEACH. Thank you for your remarks, Mr. Chairman. I have furnished the subcommittee a detailed statement, and also, a summary statement; and I'd like to proceed to highlight and amplify from my summary statement.

Mr. DINGELL. Without objection you are recognized for that purpose and your entire statement will appear in the record.

Mr. PEACH. We are here today to discuss our ongoing reviews of EPA's efforts to protect the public from ozone, a primary constituent of smog.

You have expressed concern, Mr. Chairman, about the ability of the States to comply with the EPA established ozone standard and the implications that may have for their meeting the December 1987 attainment deadline.

We believe these concerns are well founded. As we have reported in the past, we believe that the Clean Air Act affords EPA no alternative but to apply sanctions to those areas that have not attained the ozone standard by December 31, 1987.

I would emphasize in my statement, Mr. Chairman, the words, have not attained, and that this does contrast with EPA's current view of applying sanctions only to areas in nonattainment that do not have approved plans. Now, the difference is significant there because it was between 7 areas without possible approved plans, and 76 areas that may not be in attainment by December 31, 1987. My testimony today focuses on 3 issues relating to EPA and State efforts. It deals with three case studies that we have examined and the progress made by those cities toward attaining the ozone standard.

It also addresses why the ozone attainment standard has become elusive and the steps EPA has taken to control vapor emitted during automobile refueling and to address the effects of increases in gasoline volatility.

In addition, we have some observations that may be useful to the Congress should it consider legislative changes to address the ozone nonattainment problem.

Now, our case studies examined 3 of the 76 metropolitan areas that may not meet the ozone standard by December 31, 1987; Los Angeles, CA; Houston, TX; and Charlotte, NC.

Both Los Angeles and Houston have made progress toward reducing ozone, but continue to have concentrations that remain far in excess of EPA's 12 parts per million standard. For example, the Los Angeles area had an ozone level or design value of 0.44 parts

per million for the period 1979 to 1981. By the end of 1985 that level had been reduced to 36 parts per million. An improvement, but still well above the standard.

In contrast, Charlotte has remained close to reaching attainment. Between 1981 and 1985 Charlotte's ozone level fell from 0.14 to 0.13. However, even if the area's readings did not exceed the standard in 1987, Charlotte still will not be in attainment because it will have more than three readings that exceeded the standard over the past 3 years.

Now, these three cities have diverse geographical settings, differing pollution sources, and other characteristics, but share one common distinction; none will meet the ozone standard by December 1987. They are representative of a number of cities around the country that will not meet the standard. Some like Charlotte have been near attainment for many years, while others like Houston and Los Angeles remain years away from attaining the ozone standard.

Now, why has it been difficult for such diverse areas to meet the ozone standard? We have identified a variety of problems that individually or in combination have contributed to the nonattainment dilemma.

States have underestimated hydrocarbon inventories. According to EPA officials, some State implementation plans understated inventories because they had not included certain hydrocarbon sources such as sewer treatment plants, and hazardous waste sites. Also, mobile source emissions for developing implementation plans were understated.

Second, ozone formation is a complex phenomenon and not completely understood. The chemical transformation and variability of the climatological factors involved contributes to the difficulty in determining with certainty how much hydrocarbon control is required to decrease ozone level by a certain percent.

EPA and the States rely on mathematical models to predict the hydrocarbon reductions required to project attainment with the ozone standard. These models have uncertainties associated with them and often tend to underpredict needed emission reductions. Emissions of hydrocarbons have been higher than anticipated because planned controls were not always implemented; implemented controls were not always as effective as projected; and enforcement programs were sometimes ineffective.

For example, as of September 1986, 16 of 29 planned control measures for stationary sources in the Los Angeles area plan had not been implemented, generally because control technology was not fully developed or was considered too costly.

And interstate transport may also contribute to increase ozone levels. Some State officials have complained that their difficulties in attaining the ozone standard are at least partially due to emissions outside of their control.

As to EPA's efforts to control refueling in vapor emissions, they have been studying measures to control gasoline vapor emitted to automobile refueling for 14 years, and have not yet announced whether the control should be placed on automobiles or gasoline pumps.

EPA has sent a draft proposal to the Office of Management Budget for its preliminary review, which we have only recently seen, and plans to announce a decision to control these emissions in the next few months.

An associated problem is the increased hydrocarbon emissions caused by rising gasoline volatility. Since the 1970's refiners have been blending in butane and other additives to gasoline to offset oil cost increases and boost octane levels. While giving refiners more flexibility, this has increased evaporative hydrocarbon emissions from motor vehicles.

EPA is considering reducing the volatility for commercial gasoline as a way to reduce hydrocarbon emissions. In a 1985 study, EPA stated that such a reduction is the only near-term alternative for reducing evaporative hydrocarbon emissions.

EPA is also considering a longer-term alternative that would require motor vehicle manufacturers to increase the size of existing evaporative emission canisters on vehicles, so that they can meet emission standards with a more volatile certification gasoline. EPA's long-term goal is to equate volatility of gasoline used in the emission certification test with that of the in-use commercial gasoline. This may require that canisters on new vehicles be enlarged to stay within the emission limits established by the standards.

To summarize, Mr. Chairman, EPA and the States have clearly not achieved the ozone reduction levels envisioned in the Clean Air Act. A variety of factors have contributed under the current problem of ozone nonattainment, and there does not appear to be a single simple fix available to correct the problem.

As I stated at the outset of my testimony, we believe EPA must take steps to either enforce the Clean Air Act and begin implementing sanctions against those areas that is identified as being in nonattainment or seek legislative relief from provisions in the act, which in our view, require imposing these sanctions.

Now, I would recognize, Mr. Chairman, Mr. Lent's comments about the extent to which Congress might have envisioned the economic and social chaos, as he referred to it, that might be created by this and the extent to which they could foresee this in 1977 in creating the legislation.

I think the issue that we would raise, though, as you look at the legislation, is whether this is something that you can wait for the courts to resolve, as to whether the interpretation we're suggesting is correct or not, or whether a more relaxed interpretation is something that actually could be applied if this were litigated.

Now, we recognize that Congress is considering changes to the act to address the ozone problem beyond 1987. We have several observations that we think would be helpful, should this type of legislation be considered.

First, if the deadline is extended, as some have suggested, we think Congress should consider an approach that does not establish a single attainment date for all areas in the country.

As I've indicated, the various nonattainment areas differ in degree to which they need to reduce emissions to meet the standard.

One option is a program that would focus on reducing ozone levels while providing some flexibility with regard to specific dead

lines. Some areas may be able to meet attainment by a short-term deadline through a combination of efforts. Other areas such as Los Angeles could continually take steps to rachet down ozone to specified levels by an agreed upon deadline, even though the EPA standard may not be attainable in the near-term.

Under this approach, before determining how best to deal with a given nonattainment area, we believe it is critical that EPA and the State in question evaluate the extent to which the area has implemented its implementation plan, review the adequacy and enforcement of existing controls, and identify additional control measures necessary to address the ozone problem in that area.

Second, if the attainment deadline is extended, EPA should publish and implement a strategy outlining its plans to deal with areas in nonattainment. EPA's strategy should identify what steps it plans to take, to ensure we will not be sitting here several years in the future discussing the same dilemma. The strategy should, among other things, establish a clear policy on the use of sanctions, address the steps to upgrade information on hydrocarbon inventories, ensure that current data are used in models, identify needed control measures, and ensure that in-place controls are implemented and adequately enforced.

Mr. Chairman, that concludes my prepared statement, and, of course, we'll be pleased to respond to any questions.

[Testimony resumes on p. 46.]

[The prepared statement and attachments of Mr. Peach follow:]

Statement of

J. Dexter Peach, Assistant Comptroller General
Resources, Community, and Economic Development
Division

Mr. Chairman and Members of the Subcommittee:

We are pleased to be here today to discuss our ongoing reviews of the Environmental Protection Agency's (EPA) efforts to protect the public health from ozone, a primary constituent of smog.

Mr. Chairman, you have expressed concern about the ability of states to comply with the EPA-established ozone standard and the implications that may have for their meeting the December 1987 attainment deadline. We believe that these concerns are wellfounded. As we have reported in the past, we believe that the Clean Air Act affords EPA no alternative, but to apply sanctions to those areas that have not attained the ozone standard by December 31, 1987.

As you know, Mr. Chairman, we have issued several reports to you dealing with various aspects of EPA's effort to deal with the ozone problem, including reducing gasoline vapor emitted during automobile refueling, controlling vehicle emissions by requiring states to implement inspection and maintenance programs, and imposing sanctions in areas that do not attain EPA's air quality standards.1 We are currently conducting two reviews at your request: a case-study review of EPA, state, and local government actions to ensure attainment of the national ozone standard and a

1See Attachment I of this statement for a list of our recent ozonerelated reports.