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U.S. Chemical Companies Poised for Growth as Demand Swells
Jul 17, 2015 | Fuel Fix
By Rhiannon Meyers
U.S. chemical plants are expected to grow in the coming months as they take advantage of cheap natural gas prices and a strengthening economy that has boosted domestic demand for raw materials used in housing and automobiles, a new credit rating analysis finds. -
Chemical Plants Benefit from Cheap Gas Prices
Jul 17, 2015 | E&E - Energywire
Inexpensive natural gas prices have bolstered growth expectations from U.S. chemical plants alongside a strengthening economy that upped domestic demand for raw materials used in housing and automobiles, a new credit rating analysis said. -
New Regs for Monday: Airplanes, Warranty, Chemicals
Jul 17, 2015 | The Hill - Regulation
By Tim Devaney
Monday's edition of the Federal Register contains new safety requirements for airplanes, rules for product warranties, and electronic reporting requirements for chemical manufacturers. -
Balancing Innovation and Compliance
Jul 17, 2015 | Chemical Watch
By Lucas Bergkamp
The promise of green chemistry is embodied in the definition: the design of chemical products and processes that reduce or eliminate the use or generation of hazardous substances -
Green Chemicals Loan Program Helps Bridge 'Valley of Death'
Jul 17, 2015 | E&E - Greenwire
By Tiffany Stecker
The Agriculture Department is placing bets on the chemical building blocks for soybean car seats, sugar cane waste soda bottles, paints from vegetable oils, and other chemicals and products from plant-based sources. -
US CPSC Exempts Untreated Wood in Toys from Testing
Jul 17, 2015 | Chemical Watch
Unfinished and untreated wood in toys will not be subject to third-party testing for heavy metal limits under the US Consumer Product Safety Commission's toy standard (ASTM F963-11), under a direct final rule issued by the CPSC. -
Senators Seek Changes to EPA Coal Ash Rule
Jul 17, 2015 | The Hill - E2 Wire
By Timothy Cama
A pair of senators introduced legislation Friday to change the federal government’s coal ash disposal standards in a way that they say would provide more certainty to utilities. -
Westerners Want Balanced Approach to Land and Energy
Jul 17, 2015 | The Hill - Congress Blog
By Chris Saeger
This summer, millions of Americans are vacationing in our national parks and on our public lands. But while this month signals the start of vacation many, Congress is staying busy considering sweeping energy legislation, including a major package of bills proposed by Alaska Senator Lisa Murkowski (R), which could significantly affect the millions of Americans who use these public lands. The history of this Congress’s approach to our public lands seems to favor one use above all others: energy development. While this development has been critical in boosting the U.S. up to the top producer of oil and gas on the planet, we’re reaching a point where it’s being prioritized by this drill-happy Congress at the expense of other uses—such as outdoor recreation, ranching, and farming—that are critical to sustaining our western economies. And when House Natural Resources Committee Chairman Rob Bishop (R-Utah) is saying that ancient sacred petroglyphs in places like Nevada’s Great Basin aren’t an antiquity (referring to them instead as “bullcrap,”) you can bet those other uses of public lands are in danger. As a Montanan, it doesn’t take the flocks of tourists in Glacier National Park for me to know that our public lands play a central role in our country’s economic success—and not just from energy development. Thousands of small businesses, including many where I live in Whitefish, are thriving thanks to their proximity to healthy rivers and intact wild country. I’ve seen an influx of job-creating investment across Montana, due largely to the quality of life that our public lands provide and which attracts world-class talent. I’ve even seen this happen in places like Bozeman, which has recently become a hub for innovative tech companies. However, this incredible progress—both in the energy sector and in other aspects of our public lands economy—depends on maintaining a delicate balance on these valuable public lands that both honors our western heritage and keeps an eye on the future. That’s why a majority of Westerners expect our leaders in Washington to take a balanced approach to energy on our public lands when it comes to Murkowski’s energy legislation. In fact, a recent bipartisan poll of Colorado, New Mexico and Montana residents found that a majority—57 percent on average—believe our leaders in Washington should consider agriculture, energy production, and tourism equally when making decisions about our public lands. All too often, this debate ends up being driven by politics and special interests, instead of common sense. But it doesn’t have to be that way—if Westerners get involved and push for a transparent conversation on any energy legislation, we can shape its outcome and ensure that industry remains accountable to our communities and local economies, and that they continue to benefit from the many diverse values of public lands. This is our chance as westerners to demand a seat at the table and make sure our voice is a part of any decisions about energy development on our public lands. Westerners know the value of our public lands. Now’s the time to ensure that Washington knows, too. -
Oil Train Derails, Leaks Crude in Eastern Mont.
Jul 17, 2015 | E&E - Greenwire
At least three train cars were leaking crude oil after 21 cars on an oil train left the tracks yesterday evening in Montana, officials said.
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U.S. Chemical Companies Poised for Growth as Demand Swells
Jul 17, 2015 | Fuel Fix
By Rhiannon Meyers
U.S. chemical plants are expected to grow in the coming months as they take advantage of cheap natural gas prices and a strengthening economy that has boosted domestic demand for raw materials used in housing and automobiles, a new credit rating analysis finds.
But falling oil prices and a strong U.S. dollar threaten earnings for several domestic chemical companies, according to an economic and ratings outlook compiled by Standard & Poor’s Ratings Services.
Domestic chemical companies have been able to crank out chemicals at a lower cost because they rely primarily on natural gas to feed their operations while their overseas competitors typically use oil-based inputs to make chemicals. But crude prices began collapsing last year, foreign chemical companies have been able to make chemicals using a cheaper feedstock, making them more competitive against U.S. suppliers.
The lingering global crude slump may also force down the prices chemical companies fetch for their products, potentially sapping some of the healthy profits U.S. firms have been enjoying, the ratings service found.
Despite the uncertainty, the ratings service said the outlook for the U.S. chemical sector is stable.
“Somewhat favorable macroeconomic and industry-specific conditions will support demand growth over the next year for most companies in the industry,” the report said.
The dollar is expected to continue strengthening this year and next, potentially hindering US. firms from exporting their products overseas. But the U.S. economy is growing and Americans are spending more, fueling increased demand for the raw materials used to make plastics, additives, coatings and other goods. That’s good news for domestic chemical companies, who make products that are primarily consumed in the U.S.
In addition, U.S. companies will likely continue benefiting from the tidal wave of cheap natural gas unleashed by the U.S. shale boom. That means that companies that make ethylene and polyethylene, the building blocks for plastics, are particularly well-suited to stay competitive against foreign suppliers and benefit from an expected uptick in demand in the coming year, the ratings report found.
“North America will retain its cost advantage in terms of polyethylene over the next few years and certainly over the next 12 months,” Standard and Poor’s credit analyst Paul J. Kurias said in a webinar Wednesday. “We believe in terms of the cost curve, North American producers will be lower on that cost curve than Asian producers.”
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Chemical Plants Benefit from Cheap Gas Prices
Jul 17, 2015 | E&E - Energywire
Inexpensive natural gas prices have bolstered growth expectations from U.S. chemical plants alongside a strengthening economy that upped domestic demand for raw materials used in housing and automobiles, a new credit rating analysis said.
But collapsing oil prices and a strong U.S. dollar have endangered earnings for several domestic chemical companies, according to an economic and ratings outlook compiled by Standard & Poor's Ratings Services.
Despite the uncertainty surrounding prices of natural gas, oil and adjacent industries, analysts predict a stable outlook for the U.S. chemical sector.
"Somewhat favorable macroeconomic and industry-specific conditions will support demand growth over the next year for most companies in the industry," the report said (Rhiannon Meyers, Fuel Fix, July 15). -- KS
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New Regs for Monday: Airplanes, Warranty, Chemicals
Jul 17, 2015 | The Hill - Regulation
By Tim Devaney
Monday's edition of the Federal Register contains new safety requirements for airplanes, rules for product warranties, and electronic reporting requirements for chemical manufacturers.
Here's what is happening:
Airplanes: The Federal Aviation Administration (FAA) is looking into new bird strike requirementsfor transport category airplanes.
The FAA is looking to strengthen its existing bird strike requirements, which are intended to prevent airplanes from crashing in the event of a collision with a bird. The information it collects could be used for potential future rule-making.
In rare instances, birds that have crashed into an airplane's windshield or gotten stuck in the engine have forced the plane down.
The public has 120 days to comment.
Warranty: The Federal Trade Commission is moving forward with new rules for consumer product warranties.
The warranty rules clarify the seller's obligation to provide information about the warranty to consumers prior to purchase, and what information must be provided as part of that warranty.
The changes go into effect immediately and will update existing warranty rules.
Chemicals: The Environmental Protection Agency (EPA) is moving forward with new electronic reporting requirements under the Toxic Substances Control Act.
Chemical manufacturers will be required to use the EPA's Central Data Exchange to provide the agency with pre-manufacture notices and other supporting documents.
The rule goes into effect in 180 days.
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Balancing Innovation and Compliance
Jul 17, 2015 | Chemical Watch
By Lucas Bergkamp
The promise of green chemistry is embodied in the definition: the design of chemical products and processes that reduce or eliminate the use or generation of hazardous substances. That promise has captured the attention of state legislators and as green chemistry moves out of the laboratory and into state capitals, state regulatory entities are using its principles to craft statutory requirements. Varying interpretations have and will continue to present implementation challenges for product formulators and manufacturers, as they balance innovation efforts and compliance with regulatory requirements.
Challenges of differing state regulatory programmes
As states have embraced green chemistry, each has chosen to do so in a slightly different way including products covered, chemicals addressed and manufacturer requirements. As noted in the report, ‘The Impact of Regulation on Innovation in the United States: A Cross-Industry Literature Review’, regulations must strike the right balance between dimensions of flexibility, information and stringency. In general, flexibility and information lead to innovation, while inflexibility and stringency lead to greater compliance costs. At the most basic level, compliance requires cooperative efforts in a number of different areas within impacted entities, including regulatory, legal and product formulation. Manufacturers must understand the various state regulatory programmes, particularly scope and focus. They face challenges that include: monitoring chemicals of concern lists;comparing the listed chemicals with those used in or considered for their products;tracking and complying with reporting deadlines;working to protect confidential business information and trade secrets;identifying alternatives that allow for flexibility to meet broader sustainability goals; andensuring alternatives are available in sufficient supply.
Paradox of alternatives assessment
Formulators engage in a continuous innovation cycle – reviewing and improving existing product lines and creating new ingredients and products. This is how research and development should work. Manufacturers are firmly committed to innovating toward greener and more sustainable solutions that are commercially viable, while meeting the demands of their customers for efficacious products. This innovation process inherently involves alternatives assessment. However, there is a concern that the additional mandated alternatives assessment process, in some state programmes, will force companies to expend valuable time and resources on compliance rather than on innovation. If R&D is working properly, the ‘best’ alternative has already been selected.
In addition, as companies create green and sustainable ingredients, they must develop sufficient data to substantiate their improved properties over existing ingredients with well-characterised properties and undesirable concerns. In order to confidently make a decision on an alternative and avoid “regrettable substitution”, a scientist needs sufficient underlying data. Often the current ingredient is much better characterised and understood than any potential alternative. Ultimately there will be trade-offs. Is there sufficient data on the alternative ingredients so that you can confidently make a decision? Or so that you know which data needs to be generated to make a decision? And what if you have sufficient data and there are competing factors, such as better toxicological profile but increased flammability? This emphasises the importance of having the wide-range of trained experts and availability of the right tools to properly assess your ingredients and products. Practitioners and regulators should look to the recent National Research Council’s “A Framework to Guide Selection of Chemical Alternatives” when developing guidelines, and during implementation, to ensure the appropriate factors are considered. We need continued development of computational tools and alternative tests to rapidly and reliably screen possible alternatives.
Barriers to innovation
A company may deem that attempting to reformulate is not feasible for a number of reasons, including:potential cost or inability to recoup development costs in a reasonable time;potential disclosure of confidential information;status of existing research in potential alternative ingredients; andwhether there is sufficient time to bring an alternative ingredient to market.
Each of these reasons have little to do with the potential for green innovation and it is important that a regulatory programme has sufficient time and flexibility built-in so that a company can explore the options before being forced to make a decision. Insufficient time or inflexibility could easily lead to a regulatory scheme becoming a de facto ban on ingredients or products.
Positive approaches
One positive approach is to encourage voluntary programmes such as the US EPA Safer Choice (formerly Design for the Environment) programme. Safer Choice “helps consumers, businesses and purchasers find products that perform well and are safer for human health and the environment”. Voluntary programmes allow manufacturers to meet consumer demand and to provide the federal government imprimatur. In addition, they also maintain a Safer Chemical Ingredients List (Scil) of pre-evaluated ingredients to encourage safer products. Many manufacturers also maintain their own approved list and GreenBlue also maintains the CleanGredients database for similar purposes.
Another approach is to encourage research into green chemistry. For example, the recently introducedThe Sustainable Chemistry Research and Development Act by Senator Coons (D-Del) “would encourage the design, development and commercialisation of high-performing chemicals, products, and processes that reduce or eliminate risk to human health and benefit the environment.” And while it is notable that California’s Safer Consumer Products Regulation includes a research provision, it is a regulatory mandated outcome rather than a means to incentivise manufacturers.
Retaining flexibility within regulation and providing numerous options and tools for businesses that incentivise innovation are critical to realising the promise of green chemistry.
The views expressed in contributed articles are those of the expert authors and are not necessarily shared by Chemical Watch.
To comment on this article, click here: Chemical Watch Forum
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Green Chemicals Loan Program Helps Bridge 'Valley of Death'
Jul 17, 2015 | E&E - Greenwire
By Tiffany Stecker
The Agriculture Department is placing bets on the chemical building blocks for soybean car seats, sugar cane waste soda bottles, paints from vegetable oils, and other chemicals and products from plant-based sources.
Backers of renewable chemicals scored a win last year when Congress passed a farm bill expanding a popular biofuels loan guarantee program to chemicals. More than a year later, USDA's Rural Business-Cooperative Service (RBS) published the final rule to kick the new Biorefinery, Renewable Chemical and Biobased Product Manufacturing Assistance Program -- also called the 9003 program after its section number in the farm bill -- into implementation. Yesterday, the agency announced it would begin accepting applications for loans up to $250 million to build refineries, for both biofuels and biochemicals.
This marks the first federal loan guarantee for renewable chemicals, providing a key element for raising money that startup businesses often grapple with, said Lillian Salerno, RBS administrator. Technology companies face a gap between ideas and reality, or a "valley of death," when their private loans don't have a federal backup.
With a loan guarantee, "you've got that opportunity to step over that valley of death to get from concept to business," said Salerno.
Jim McDermott, founder and executive chairman of Fulcrum BioEnergy, represents a company that has benefitted from the 9003 program. Fulcrum is completing the Sierra BioFuels project, a facility near Reno, Nev., that turns methane from household waste into jet fuel destined for United and Cathay Pacific jetliners. Last year, the company secured a $105 million loan guarantee through the 9003 program.
"It's not just a loan guarantee program, it has a lot of other ancillary benefits," said McDermott at an event yesterday. Most significantly, it makes borrowers look good to other potential investors.
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"The rigor, frankly, [for this] public money that's required, the diligence and everything that's required to get to a level at which the program is comfortable with you ... it really gives you a bit of a halo effect," said McDermott. The Sierra project's USDA backing has allowed the company to raise "significant amounts" of capital from other companies, including a $30 million investment from United Airlines.
U.S. policies like the renewable fuel standard have long favored biofuels over biochemicals and other materials, advocates say. But the sector attracts more private interest, with investors drawn to chemicals' high value and diverse potential applications (Greenwire, May 23, 2014).
Those high value margins can improve subsidy rates, allowing the RBS greater authority in awarding loan guarantees, Salerno said.
Companies without a federal program to back their loan are in a tough spot, said Jonathan Plowe, head of new energy and infrastructure solutions at Bank of America Merrill Lynch. Bio-based technologies have a difficult time finding a niche in large institutions, where staff prefer to stay focused on the larger, more established investments. There's a lack of a large, liquid market for funding these types of renewable projects, he said. Finally, it's difficult to find projects with the same contractual framework as other renewables, like solar. But an agreement with USDA could facilitate the flow of private-sector capital, Plowe said.
The program gives businesses a leg up to flourish, an increasingly important role as government's function in promoting innovation is stifled for lack of funding.
"This has not been an easy time at USDA, to be candid," said Agriculture Secretary Tom Vilsack at yesterday's event, referring to the 10-percent-lower budget his department must now manage compared with five years ago. Current discretionary levels for USDA are around $20.8 billion, and both the House and Senate have proposed even lower budgets for fiscal 2016.
The current application process is now more collaborative, said Mark Brodziski, director of the energy division of RBS. USDA is working with both the lender and the applicant to come together in an agreement.
Applicants must send a letter of intent at least 30 days before submitting the application. In addition to a project summary, applicants must also give a feasibility study, a business plan, financial statements and other documents to show their commitments. In a second phase, USDA works with the creditor to develop an environmental assessment and a final evaluation of feasibility.
Historically, the program has covered about 50 percent of the costs of projects, said Brodziski. Legally, federal agencies can contribute only up to 80 percent of the cost of a project.
The program allows for development in rural America, shifting the centers of innovation away from the American coasts, said Jim Greenwood, president and CEO of the Biotechnology Industry Organization.
"Biotechnology innovation is able to thrive in places like Galva, Iowa, [and] Hugoton, Kan.," said Greenwood, referring to two sites where companies are building plants to produce cellulosic ethanol.
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US CPSC Exempts Untreated Wood in Toys from Testing
Jul 17, 2015 | Chemical Watch
Unfinished and untreated wood in toys will not be subject to third-party testing for heavy metal limits under the US Consumer Product Safety Commission's toy standard (ASTM F963-11), under a direct final rule issued by the CPSC.
The rule follows a determination made by the Commission that unfinished and untreated tree trunk does not contain heavy metals that would exceed the limits specified in the Consumer Safety Specifications for Toy Safety (toy standard).
The standard requires, among things, that surface coating materials and accessible substrates of toys that are sucked, mouthed or ingested comply with the solubility limits on eight heavy elements. Product manufacturers have to get third-party testing done for compliance certification.
The rule will go into effect on 15 September. However, if the CPSC receives “significant adverse comment” by 17 August it will withdraw the rule, says a notice in the Federal Register.
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Senators Seek Changes to EPA Coal Ash Rule
Jul 17, 2015 | The Hill - E2 Wire
By Timothy Cama
A pair of senators introduced legislation Friday to change the federal government’s coal ash disposal standards in a way that they say would provide more certainty to utilities.
The bill from Sens. John Hoeven (R-N.D.) and Joe Manchin (D-W.Va.) is similar to legislation that the House is planning to vote on next week, after the Energy and Commerce Committee passed it earlier this year.
Hoeven and Manchin say their bill would retain the health and environmental standards in the Environmental Protection Agency’s (EPA) December rule regulating the disposal and storage of coal ash, a waste product from coal-fired power generation that contains substances like arsenic, mercury and chromium.
“Coal ash is a byproduct of coal-based electricity generation that has been safely recycled for buildings, roads, bridges and other infrastructure for years,” Hoeven said in a statement.
“The overregulation of coal ash by the EPA would threaten vital industries and needlessly cost West Virginia and the nation more jobs, neither of which we can afford,” Manchin said. “This legislation gives us a commonsense fix: let each state use existing EPA health and environment regulations to set up their own permitting program that allows them to recycle and reuse coal ash.”
The EPA declared in December that coal ash is not hazardous under federal law, avoiding costly disposal rules.
But the EPA cannot enforce its own rule, nor force states to enforce it. Instead, only lawsuits from citizens can hold utilities accountable.
The Senate bill, similarly to the House one, would require states to adopt the federal standards or let the EPA enforce them itself, a proposal that has gained the support of utilities and others who want to avoid dealing with lawsuits.
But it would also delay enforcement of some of the provisions, and it would prevent the EPA from eventually declaring coal ash to be hazardous, aspects that have angered environmentalists.
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Westerners Want Balanced Approach to Land and Energy
Jul 17, 2015 | The Hill - Congress Blog
By Chris Saeger
This summer, millions of Americans are vacationing in our national parks and on our public lands. But while this month signals the start of vacation many, Congress is staying busy considering sweeping energy legislation, including a major package of bills proposed by Alaska Senator Lisa Murkowski (R), which could significantly affect the millions of Americans who use these public lands.
The history of this Congress’s approach to our public lands seems to favor one use above all others: energy development. While this development has been critical in boosting the U.S. up to the top producer of oil and gas on the planet, we’re reaching a point where it’s being prioritized by this drill-happy Congress at the expense of other uses—such as outdoor recreation, ranching, and farming—that are critical to sustaining our western economies. And when House Natural Resources Committee Chairman Rob Bishop (R-Utah) is saying that ancient sacred petroglyphs in places like Nevada’s Great Basin aren’t an antiquity (referring to them instead as “bullcrap,”) you can bet those other uses of public lands are in danger.
As a Montanan, it doesn’t take the flocks of tourists in Glacier National Park for me to know that our public lands play a central role in our country’s economic success—and not just from energy development. Thousands of small businesses, including many where I live in Whitefish, are thriving thanks to their proximity to healthy rivers and intact wild country. I’ve seen an influx of job-creating investment across Montana, due largely to the quality of life that our public lands provide and which attracts world-class talent. I’ve even seen this happen in places like Bozeman, which has recently become a hub for innovative tech companies.
However, this incredible progress—both in the energy sector and in other aspects of our public lands economy—depends on maintaining a delicate balance on these valuable public lands that both honors our western heritage and keeps an eye on the future.
That’s why a majority of Westerners expect our leaders in Washington to take a balanced approach to energy on our public lands when it comes to Murkowski’s energy legislation. In fact, a recent bipartisan poll of Colorado, New Mexico and Montana residents found that a majority—57 percenton average—believe our leaders in Washington should consider agriculture, energy production, and tourism equally when making decisions about our public lands.
All too often, this debate ends up being driven by politics and special interests, instead of common sense. But it doesn’t have to be that way—if Westerners get involved and push for a transparent conversation on any energy legislation, we can shape its outcome and ensure that industry remains accountable to our communities and local economies, and that they continue to benefit from the many diverse values of public lands.
This is our chance as westerners to demand a seat at the table and make sure our voice is a part of any decisions about energy development on our public lands. Westerners know the value of our public lands. Now’s the time to ensure that Washington knows, too.
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Oil Train Derails, Leaks Crude in Eastern Mont.
Jul 17, 2015 | E&E - Greenwire
At least three train cars were leaking crude oil after 21 cars on an oil train left the tracks yesterday evening in Montana, officials said.
There were no reports of injuries or fires, said Roosevelt County, Mont., Sheriff Jason Frederick, though some residents were evacuated.
BNSF Railway spokesman Matt Jones said the oil has been contained and railroad employees are at the scene.
The train was carrying 106 loaded crude oil cars when it derailed near Culbertson, Mont., near the North Dakota border, around 6 p.m. local time yesterday (Associated Press, July 17). -- SP
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