Preview Newsletter
ACC PM
-
(ACC Mentioned) APR Releases Supermarket Rigid Plastics Recycling Video
Aug 14, 2015 | Recycling Today
A new training video from the Association of Postconsumer Plastics Recyclers (APR), Washington, is designed to help grocery stores generate maximum revenue from in-store recycling efforts. -
(ACC Mentioned) Resin Price Drops Add to Issues Sending Thornton into Bankruptcy
Aug 14, 2015 | Plastics News
By Frank Esposito
Resin distributor and reseller Thornton & Co. Inc. has filed for bankruptcy, after having a plan to repay suppliers rejected by its primary bank. -
US Panel Agrees Penta-BDE Flame Retardant is Carcinogenic
Aug 14, 2015 | Chemical Watch
A National Toxicology Program (NTP) review panel has approved a technical report, which shows clear evidence of carcinogenic activity of penta-BDE flame retardants. -
Oregon Toxic Free Kids Act Signed into Law
Aug 14, 2015 | Chemical Watch
Oregon governor Kate Brown signed into law SB 478, the “Toxic-Free Kids Act,” on 27 July (CW 8 July 2015). -
Administration Approves Oil Exports to Mexico
Aug 14, 2015 | The Hill - E2 Wire
By Timothy Cama
The Obama administration approved limited sales of crude oil to Mexico, one of the most significant recent actions to allow exports of crude. -
Low Oil Prices Pose Threat to Texas Fracking Bonanza
Aug 14, 2015 | The New York Times
By Clifford Krauss
No place in Texas produces more oil than Karnes County, but suddenly the roaring economy here is cooling fast, chilled by the plunging price of crude. -
California’s Fracking Fluids Tell A Bigger Story
Aug 14, 2015 | Environmental Working Group
By Bill Allayaud
Although hydraulic fracturing for oil has gone on for decades in California and half a million Californians live within a mile of a fracked well, the state Division of Oil, Gas, and Geothermal Resources hardly interfered with it until 2011. -
370 Business Groups Protest EPA Ozone Proposal
Aug 14, 2015 | E&E PM
By Amanda Peterka
Business and industry groups today told the White House they are "deeply concerned" about U.S. EPA's proposal to tighten the ozone standard. -
Clean Power Plan Offers Concessions But is Still a Challenge -- Utility Analysts
Aug 14, 2015 | E&E - Climatewire
By Emily Holden
Extended deadlines for action under the final Clean Power Plan are a boon to electric utilities, according to financial analysts. -
States Fire Opening Shot with Request for Emergency Stay
Aug 14, 2015 | E&E - Energywire
By Ellen M. Gilmer
Foes of the Obama administration's plan for cutting greenhouse gas emissions from the power sector have lodged their first formal challenge to the newly finalized Clean Power Plan, asking federal judges to postpone the rule's deadlines. -
New Lawsuit's Goal: Secure Right-Leaning Judicial Panel
Aug 14, 2015 | E&E - Greenwire
By Jeremy P. Jacobs
Yesterday's bid by 15 states asking a federal court to block U.S. EPA's landmark Clean Power Plan contained little new information about their objections to the rule. -
EPA Water Policy Hints At Limits On Agency's 'Interpretative' Rulemaking
Aug 14, 2015 | InsideEPA
By Bridget DiCosmo
EPA's recent proposed "interpretive" rule aiming to streamline tribes' applications to issue Clean Water Act (CWA) permits hints at the agency potentially seeing some limits on its authority to issue new interpretations of existing rules despite a Supreme Court ruling that says such policies do not need to have formal notice-and-comment. -
House GOP Questions McCarthy's Testimony On EPA Rules
Aug 13, 2015 | InsideEPA
Republican members of the House science committee are challenging as potentially “false and misleading” some of EPA Administrator Gina McCarthy's testimony at recent congressional hearings on the agency's Clean Water Act (CWA) jurisdiction rule and ozone air standards, urging her to quickly clarify the comments. -
Va. State Lawmakers Take Fresh Aim at Clean Power Plan
Aug 14, 2015 | E&E - Energywire
By Rod Kuckro
Virginia lawmakers intent upon derailing the Obama administration's Clean Power Plan may want to be careful what they wish for, according to a leading clean energy advocate in the state. -
Extended Timeline Does Little to Ease Urgency for Ill. Energy Reform
Aug 14, 2015 | E&E - Energywire
By Jeffrey Tomich
U.S. EPA's Clean Power Plan issued last week gives states an additional two years to meet its earliest compliance deadline -- an extra cushion offered in response to criticism about the more aggressive timeline in last year's draft rule. -
API Urges OMB To Drop Methane From Oil, Gas Rules, Focus On VOCs
Aug 14, 2015 | InsideEPA
By Dawn Reeves
The American Petroleum Institute (API) is pressing the administration to avoid direct regulation of the potent greenhouse gas (GHG) methane from the oil and gas development sector in EPA's upcoming rules and instead continue to focus on reducing volatile organic compounds (VOCs), which have the co-benefit of methane reductions. -
EPA's Critics Might Wait Until 2017 To Advance Regulatory Reform Package
Aug 14, 2015 | InsideEPA
By David LaRoss
EPA's critics in Congress are now considering waiting until 2017 for a concerted effort to pass a comprehensive regulatory reform package that a potential GOP president might sign, though they continue to push new bills that would allow legislators to end what they see as agency overreach with its climate, water, and other rules. -
Pipelines Safer Than Rail for Moving Oil -- Study
Aug 14, 2015 | E&E - Energywire
By Blake Sobczak
Railroads are more than 4 ½ times riskier than pipelines for moving oil, according to a new study out of Canada.
Industry and Association News
Chemical Management News
Chemical Security News - There are no clips to report at this time.
Energy and Environment News
Transportation News
-
(ACC Mentioned) APR Releases Supermarket Rigid Plastics Recycling Video
Aug 14, 2015 | Recycling Today
A new training video from the Association of Postconsumer Plastics Recyclers (APR), Washington, is designed to help grocery stores generate maximum revenue from in-store recycling efforts.
The video, “Baling Rigid Plastics for Greatest Value,” was produced by APR in collaboration with Publix Super Markets and the American Chemistry Council (ACC), Washington. The purpose of the video is to help chain and regional grocers and other large volume generators of highly recyclable rigid plastics understand the financial benefits and operational considerations of baling No. 2 high-density polyethylene (HDPE) and No. 5 polypropylene (PP) rigid plastic packaging.
“There is great value in grocery store plastics,” says Liz Bedard, director of the APR Rigid Plastics Recycling Program. “The Grocery Store Recycling Project is all about capturing good material for recycling. Baling the material adds good economic value, and we want to make it easy for grocers to see how they can enhance the value of the material by baling it.”
Highlighting best practices for baling rigid plastic containers using a horizontal baler that produces large dense bales, the video will be of particular interest to grocery distribution managers, recycling/return center operators and waste/zero waste managers, APR says.
“With over 1,100 stores, Publix recycles tons of rigid plastics every week,” says Kim Brunson, manager of Publix Recycling & Solid Waste. “Baling has become part of Publix’s best management practices and is simply the right thing to do.”
“An Economic Overview of Recycling Grocery Rigid Plastics,” released by APR in April 2015, detailed the key benefits of recycling rigid plastic packaging generated in-store by large numbers of supermarkets. Based on results of this metric-based study and data from previous APR studies conducted with major grocery chains, source separating and centrally baling high volumes of bulky rigid plastic packaging can lead to new revenue for grocers, the organization says.
The video and more information about recycling grocery rigid plastics are available atRecycleGroceryPlastics.org.
-
(ACC Mentioned) Resin Price Drops Add to Issues Sending Thornton into Bankruptcy
Aug 14, 2015 | Plastics News
By Frank Esposito
Resin distributor and reseller Thornton & Co. Inc. has filed for bankruptcy, after having a plan to repay suppliers rejected by its primary bank.
Southington, Conn.-based Thornton — with annual sales of about $200 million — filed for Chapter 11 bankruptcy protection in Hartford, Conn., on Aug. 10, officials said.
“We have decided that the best way to try and repay our creditors as much money as possible is under bankruptcy protection,” company President J. Paul Thornton Jr. said in a news release. “We proposed a plan to our banking group, led by People’s United Bank, which would have let us stay in business and recover from certain market events, but they rejected it."
People's United is based in Bridgeport, Conn. Thornton officials said their plan was rejected by People’s and by its partner bank, Farmington Bank of Farmington, Conn.
“We were under very tight constraints from our bank,” Thornton Vice President Jake Thornton — Paul’s son — said in an Aug. 12 phone interview. “We filed to protect ourselves from complete liquidation.
“We’re going to fight through this and find a way through, one way or another,” he added.
In the filing, Thornton & Co. listed assets of between $10 million and $50 million, and a similar amount in liabilities. The firm’s list of largest unsecured creditors reads like a Who’s Who of the North American resin market.
Thornton & Co.’s largest single unsecured creditor is Formosa Plastics Corp. USA, which is owed almost $2.1 million. Westlake Chemical Corp. is owed more than $2.2 million through two separate units. Other top unsecured creditors include Equistar Chemicals LP, at more than $1.3 million, and Chevron Phillips Chemical Co. at just less than $1 million.
Thornton has retained Gordian Group LLC of New York as its financial adviser. Thornton’s annual resin sales total more than 300 million pounds, mostly in prime and off-grade polyethylene and polypropylene.
Paul Thornton cited “a significant drop” in petrochemical prices in the last year as a reason for the bankruptcy filing. That drop caused his firm’s sales to fall more than 20 percent, he added, leading Thornton to deal with the resulting financial pressure by selling inventory on hand “at a significant loss.
“We are filing this case to try and bring value to our suppliers who have so generously supported us and worked with us,” Paul Thornton explained. “If we do just as People’s Bank asks, our suppliers will get nothing.”
Thornton “will now likely undertake at least a partial orderly liquidation,” officials added in the release.
Paul Thornton founded the firm in 1994. The firm had been on a growth curve in recent years, hiring several market veterans in early 2014 and embarking on a branding campaign.
In early 2014, Jake Thornton told Plastics News that the firm was looking to benefit from large PE resin capacity expansions that are set to come online in North American in the next few years.
Jake Thornton said Aug. 12 that his firm has been in touch with potential investors. He added that the firm plans to sell off some of its resin inventory.
“Our goal is to pay back our creditors as quickly as we can, and we have a plan to do that,” he explained. “We had a plan before the filing, but we didn’t have time to execute it.”
A large drop in recent North American prices for polypropylene resin played a role in Thornton’s financial issues. Prices for the material are down a net of 25 cents per pound since November, including drops of 10 cents each in December and January.
“We had too much polypropylene in-house, and banks don’t like inventory at all,” Jake Thornton said. “But it was really a culmination of things. We made some managerial mistakes as well.”
He added that, in hindsight, Thornton & Co. should have worked with a larger bank than People’s when the firm chose a new bank four years ago.
“We grew out of our bank relatively quickly,” Jake Thornton said. “We were a big fish in a small pond, and when that happens, the magnifying glass is on you. The bank wasn’t willing to help us.”
Sources in the resin distribution market said that it will be challenging for Thornton & Co. to make it through the bankruptcy process intact.
“They might be able to survive in some way as a smaller broker, but they’d have to shrink down overhead to bare bones,” one distribution executive said of Thornton. “I’m stunned they could get hurt this bad. They must have really taken their eyes off the ball.
“We saw bigger price drops than this on polyethylene and polypropylene during the recession, and no resellers or distributors went out of business.”
“They’re going to have a real struggle coming out of it,” another industry executive said of Thornton. “It’s not like the [resin] majors need another reseller or prime distributor.”
Major North American resin makers in recent years have been reducing the number of distributors and resellers that they work with. But regional resin sales to those channels were up in the first half of 2015, according to the American Chemistry Council.
Sales of low density PE to distributors were up almost 40 percent in the first half, while distributors bought almost 15 percent more PP. On the resellers’ side, sales of high density PE were up more than 35 percent, with sales of linear low density PE up almost 11 percent. PE totals are for the U.S. and Canada. PP totals include those countries as well as Mexico.
-
US Panel Agrees Penta-BDE Flame Retardant is Carcinogenic
Aug 14, 2015 | Chemical Watch
A National Toxicology Program (NTP) review panel has approved a technical report, which shows clear evidence of carcinogenic activity of penta-BDE flame retardants.
Penta-BDEs were widely used in upholstery foam. They were largely withdrawn in 2004, in the US and Europe, by the, then, Great Lakes Chemical Corporation [now Chemtura] because of concerns about their environmental effects.
In the US, they have been covered by a significant new use rule since 2006. They were subject to one of the US EPA's first chemical action plans under the Toxic Substances Control Act (CW 5 January 2010).
Despite regulation, penta-BDEs remain in older products and are persistent in food, wildlife and the environment, including household dust.
The US Centers for Disease Control and Prevention found that they are bioaccumulative pollutants that most people retain in their body tissues.
The report describes studies, which considered a technical grade of penta-BDEs, known as DE-7, that contains a mixture of penta-BDE isomers. Three-month toxicology studies were conducted in rats and mice. Two-year toxicology and carcinogenicity studies were also conducted in rats, where animals were fed the compounds during pregnancy and through birth to adulthood.
The studies showed the mixture was a carcinogen in both species, causing liver tumours and potentially precancerous lesions in the liver and thyroid.
The review panel considered the report on 25 June, and voted to accept its conclusions.
-
Oregon Toxic Free Kids Act Signed into Law
Aug 14, 2015 | Chemical Watch
Oregon governor Kate Brown signed into law SB 478, the “Toxic-Free Kids Act,” on 27 July (CW 8 July 2015).
The act establishes a list of chemicals of concern, and requires manufacturers to register children's products containing them with the state biennially.
Mandatory phase-out of listed chemicals will be required within six years for products that are:intended for children under three;“mouthable,”; orapplied to the skin (CW 2 July 2015).
The law goes into effect 1 January 2016.
-
Administration Approves Oil Exports to Mexico
Aug 14, 2015 | The Hill - E2 Wire
By Timothy Cama
The Obama administration approved limited sales of crude oil to Mexico, one of the most significant recent actions to allow exports of crude.
The Commerce Department, which is responsible for such exports, is “acting favorably on a number of applications” to export oil to Mexico in exchange for importing oil to the United States from Mexico, Reuters reported.
Oil exports have been mostly banned for 40 years under a law meant to protect the United States from international oil volatility. But swaps are one of the areas in which the federal government has some degree of latitude.
While the volume of crude exchanged will be very limited, the move nonetheless marks a milestone in efforts by the oil industry, Republicans and others to ease the export ban.
Proponents of exports say that, with domestic oil production reaching record highs, the ban is outdated.
The swaps would likely involve U.S. companies exchanging lighter crude varieties, which have represented most of the increase in domestic production, for heavier oil, which domestic refiners are better equipped to handle, Reuters said.
Mexican state oil company Pemex applied for the swaps in January, saying it wanted to exchange about 100,000 barrels a day — about 1 percent of United States output.
Commerce also rejected export applications to countries in Asia and Europe, because they are not afforded the same priority under the law as Mexico and Canada, which already gets U.S. shipments, Reuters reported.
Sen. Lisa Murkowski (R-Alaska), a top oil export proponent and chairwoman of the Energy and Natural Resources Committee, argued in June that more foreign countries should apply to Commerce for export approvals.
Her committee approved a bill recently to lift the export ban completely.
-
Low Oil Prices Pose Threat to Texas Fracking Bonanza
Aug 14, 2015 | The New York Times
By Clifford Krauss
No place in Texas produces more oil than Karnes County, but suddenly the roaring economy here is cooling fast, chilled by the plunging price of crude.
Workers who migrated from far and wide to find work here, chasing newfound oil riches, are being laid off, deserting their recreational vehicle parks and going home. Hay farmers who became instant millionaires on royalty checks for their land have suddenly fallen behind on payments for new tractors they bought when cash was flowing. Scores of mobile steel tanks and portable toilets used at the ubiquitous wells are stacked, unused, along county roads.
“Everybody is waiting for doomsday,” said Vi Malone, the Karnes County treasurer. “Everything was good, and everybody was getting these big checks, and everybody waited for their land to be leased, and then it all came to a screeching halt around the beginning of the year.”
That screeching was the price of oil cracking — to under $45 a barrel from more than $100 a barrel last summer. After a brief revival in the spring, the benchmark American price has swooned again by more than 25 percent, plunging this week to a new low since the recession.Continue reading the main storyOil Prices: What’s Behind the Drop? Simple Economics
The oil industry, with its history of booms and busts, is in a new downturn.
Record production in the United States, along with a drilling frenzy in Iraq and Saudi Arabia, as well as the prospect that Iranian oil will again flood world markets, have spooked traders into abandoning their positions. What’s more, the very productivity here in the heart of the Eagle Ford shale fields, and the efforts by the oil companies to make them increasingly efficient, are contributing to the glut as well.
The plunge has rippled far beyond the markets, sending the economy here and across the entire oil patch into turmoil. Nowhere is the sharp turn in fortunes as evident as in places like Karnes County and other parts of Texas, North Dakota, Louisiana, Colorado, Pennsylvania, Arkansas and Ohio that had little oil or natural gas production until drillers figured out how to tap into hard shale rocks deep underground.
“People didn’t have to work anymore,” said Elliott Skloss, a sign maker for the county road and bridge department. “Now they’ll have to work or panhandle if the oil price doesn’t go back up.” His family farms had five oil and gas wells that earned monthly checks worth $50,000 just a year ago, but they now earn one-tenth as much because of the decline in prices and well production.
Mineral rights that once sold for $40,000 an acre for the field’s sweet spot here in Karnes County now go for $15,000. The total county tax base dropped this year for the first time since 2010, by more than 20 percent.PhotoRaymundo Villareal, 38, in his rented trailer in Kenedy, Tex. Since oil prices have fallen his work hours have been cut in half. CreditMichael Stravato for The New York Times
Many oil companies, including Royal Dutch Shell and Chevron, have had to slash their payrolls this summer. Chesapeake Energy, which has prized assets here in the Eagle Ford, recently scrapped its dividend to save cash. Another Eagle Ford producer, Linn Energy, an energy producing partnership structured as a limited liability company, stunned Wall Street recently by announcing its intention to suspend payments to investors to conserve cash.
Producers that have been shielded by contracts that allowed them to sell oil at higher than benchmark prices are gradually being exposed as those agreements expire. The depressed oil price is limiting the ability of companies to borrow as they have to write down field assets that are used as collateral for loans.
One result, analysts say, will be a painful consolidation among oil producers as the weak and indebted are forced to sell to the strong.
The consulting firm IHS recently studied 66 companies and found that in the first quarter of the year alone they had to write down nearly $29 billion in the value of their assets, easily exceeding the total for the full year of 2014. The sale of cheapened assets from one company to another has already begun here in the Eagle Ford, and more consolidation is expected.Continue reading the main story
OKLA.
ARK.
Dallas
Fort Worth
LA.
TEXAS
Houston
San Antonio
Karnes City
Gulf of Mexico
100 MILES
By The New York Times
Swift Worldwide Resources, an oil industry recruiter based in Houston, estimates that worldwide oil field layoffs have reached more than 176,000.
Just five years ago, Karnes County was a speck in the oil patch, its production a rounding error in a state historically tied to oil.
Then came hydraulic fracturing, or fracking, and the surge in oil production it unleashed.
Crumbling towns here reinvented themselves with new restaurants, markets and hotels as money and jobs poured in. Construction began on several new schools and a major hospital to accommodate the new residents.PhotoPortable toilets, normally at oil drilling sites, sit idle in Karnes City, Tex.CreditMichael Stravato for The New York Times
Today, even with the price of oil plummeting, no county in Texas comes close to producing as much crude as Karnes County — 6.8 million barrels in June alone. Twenty rigs operated by giants like ConocoPhillips, EOG Resources and Murphy Oil continue to churn through hard rock thousands of feet below ground.
Most local officials say the county is still far better off today than before the shale boom, when it was one of the poorest in the state. Back then, the biggest employer was the local jails, and local ranches were forced to sell off their livestock after years of drought.
Despite the downturn, the oil still flows, thanks to producers’ advances in efficiency.
During the second quarter of the year, Marathon Oil, for instance, averaged 32 percent more oil and natural gas production in the Eagle Ford than in the same quarter a year before.PhotoA pawn shop in Kenedy, Tex., had a spike in business when oil prices fell, as customers sold tools for cash. CreditMichael Stravato for The New York Times
But even those days are set to end. With the number of rigs now drilling in the core Eagle Ford counties dropping to 79 from a peak of 206 only nine months ago, and with production from a shale well declining as much as 60 percent the year after it is completed, output is bound to begin a steep decline in the coming months unless prices rebound.
“With the amount of oil we’re sitting on top of, it’s devastating that we can’t go get it,” said Matt Kibodeaux, the local project manager for Energy Maintenance Services, a Houston company. The company, which lays pipes to connect well pads to larger pipelines here, employed 186 people here a year ago but is now down to 18.
In a shed behind Mr. Kibodeaux’s office, a group of workmen hung out on the back of a pickup truck the other day trying to stay in the shade to endure the 100-degree heat.
“When you come to work, you don’t know if they’ll tell you to go home,” said Omar Marquez, 69, a project safety coordinator who had just returned from inspecting workers who spray-paint pipes. “I’m working to pay off my debts, but now that looks slim the way the oil business is going. “
The local service companies are suffering because the major operators are cutting costs by forcing them to slice their prices and fees.
Supreme Vacuum Services, which hauls fracking fluids and oil well waste water, is being paid 20 percent less this year for its services. With revenue and profits down considerably, it has reduced the hours of its drivers, released the least efficient drivers and installed new software in the office to replace secretarial help. From an average payroll of 92 last year, it is down to 75, according to the local management.
“There is a point where I can’t reduce my prices anymore,” said Brooks Holzhausen, the company’s chief operating officer here. “Any more cuts, you sacrifice safety and quality, and I am not going to do that.”
For all the grief, local officials here say their county is still destined to have a great future once the oil price recovers, as they say it surely will.
“We will probably be the last field to decline, or bust, if you will,” said Don Tymrak, the city manager of Karnes City. “But we will also be the first to feel the recovery.”
-
California’s Fracking Fluids Tell A Bigger Story
Aug 14, 2015 | Environmental Working Group
By Bill Allayaud
Although hydraulic fracturing for oil has gone on for decades in California and half a million Californians live within a mile of a fracked well, the state Division of Oil, Gas, and Geothermal Resources hardly interfered with it until 2011.
EWG and other watchdogs uncovered the lapses in monitoring the safety of fracking and persuaded the state assembly to pass legislation forcing the state agency to begin regulating the process. Today, California has one of the most comprehensive disclosure systems in the country, not only for chemicals, but also for water use and waste disposal.
According to a new EWG analysis of the state’s public records, drillers have pumped nearly 200 different chemicals into wells across the state since the new disclosure system went into effect in January of last year. EWG’s analysis confirms that hazardous and toxic chemicals are routinely employed to extract oil.
The records show that 15 of those chemicals are on the state’s Proposition 65 list of known causes of cancer or reproductive harm. For instance, crystalline silica is notorious for cancer risk. And methanol causes reproductive harm.
Another 12 are hazardous air pollutants under the Federal Clean Air Act, and 93 harm aquatic life. There’s little toxicity information about 15 percent of the chemicals used in fracking in CA.
Few studies have assessed the risks of fracking chemicals for people who live near oil fields. What happens when people are exposed to small amounts of these chemicals over a lifetime? At this point, no one can say for sure.
Nor has anyone conducted comprehensive studies to find out whether fracking chemicals have contaminated groundwater. A new state law set up a groundwater sampling and monitoring program to provide some of that data, but we won’t see results for a while. Given the Division’s lack of oversight of the program to protect CA’s aquifers from improper disposal of oil and gas wastewater, this monitoring will be critical. An earlier analysis by EWG showed the wastewater recovered from fracking operations to be heavily contaminated with toxic benzene and heavy metals.
Accounting for the array of toxic chemicals used in fracking, an inherently risky process, is just the first step. Regulators and scientists need to study the quantities, frequency and location of chemicals to come to some judgments about the health risks of fracking and to determine whether drillers are handling fracking fluid properly.
State officials must be extremely diligent in carrying out the new law and regulations to ensure that public health, groundwater and surface water are protected.
California lawmakers should ask: Are drillers using the least toxic chemicals available?Are regulators doing their jobs? Should another state agency get involved?
State Sen Fran Pavley (D – Los Angeles) has introduced another bill to further tighten regulation of harmful fracking chemicals. Among other things, it would require drillers to disclose more information about the safety of chemicals used in fracking fluids.
Pavley has signaled her intent to make her proposal even stronger. We at EWG support the amendment to ban the use of so-called “open percolation ponds” for disposal of toxic oil and gas wastewater. This cheap method of wastewater disposal pollutes groundwater and releases air pollutants. In times of extreme drought and in areas with bad air quality already, it makes sense to end this practice.
Over the longer term, California policymakers should give priority to keeping more hydrocarbons in the ground. We all need to decide if the risks of harm to the environment, human health and water contamination are worth it.
-
370 Business Groups Protest EPA Ozone Proposal
Aug 14, 2015 | E&E PM
By Amanda Peterka
Business and industry groups today told the White House they are "deeply concerned" about U.S. EPA's proposal to tighten the ozone standard.
In a letter to White House Chief of Staff Denis McDonough, the 370 groups warned of costly burdens on states and communities, as well as impediments to business expansion, should EPA finalize its proposal.
EPA in November proposed to tighten the national ambient air quality standard for ground-level ozone from 75 parts per billion, which was last set in 2008 during the George W. Bush administration, to between 65 and 70 ppb. The agency says the science indicates the 75 ppb limit is no longer adequate to protect public health as the Clean Air Act requires.
"If finalized, EPA's proposed stringent ozone standards could limit business expansion in nearly every populated region of the United States," the letter says, "and risk the ability of U.S. companies to create new jobs."
The groups also argued that the ozone proposal may have "unintended" negative effects on public health if it ends up harming the economy.
"We believe these scientific uncertainties should be better explored in order to best allocate resources in a manner that strengthens both the economy and the environment," they wrote.
The groups called on EPA to retain the 75 ppb standard.
Under the Clean Air Act and affirmed by the Supreme Court, EPA is required to consider only public health when setting a new national ambient air quality standard. Industry representatives have previously raised the potential negative health effects tied to economic loss as a reason for EPA to not lower the standard.
Public health advocates, on the other hand, say the science shows that EPA must set a new limit no higher than 60 ppb. Earlier this week, a dozen of the nation's largest public health groups wrote a letter to President Obama calling on him to set a standard that's protective of health.
EPA is poised to finalize a new ozone standard by an Oct. 1 court-ordered deadline. The agency is expected to send its final standard to the White House Office of Management and Budget shortly.
Several of the groups signing on to the letter today were state petroleum organizations affiliated with the national American Petroleum Institute. API today said it was organizing an aggressive ad campaign against EPA's proposal in several states throughout August.
API will air television ads in Colorado, Indiana, West Virginia, Pennsylvania, Virginia, Minnesota and Missouri, according to Howard Feldman, the group's director of regulatory and scientific affairs. Feldman said those states were targeted because they are home to "robust" debates over energy.
The group is spending a "significant" amount on the ad buy, Feldman said, but he didn't give an exact total for the campaign.
-
Clean Power Plan Offers Concessions But is Still a Challenge -- Utility Analysts
Aug 14, 2015 | E&E - Climatewire
By Emily Holden
Extended deadlines for action under the final Clean Power Plan are a boon to electric utilities, according to financial analysts.
Giving states two more years to start bringing down power-sector carbon emissions will allow companies to run inexpensive coal plants longer, avoiding early closure costs, according to Standard & Poor's Ratings Services. It will also make it easier for them to recoup the costs of replacement power, and it will ease grid reliability concerns that a tighter timeline may have raised, S&P says.
Moving the start of the interim compliance period to 2022, rather than 2020, could lower or delay needed customer rate increases, according to S&P.
The change could "contribute operational flexibility for meeting the regulatory standards and also provide a route for transitioning more smoothly to higher electric rates needed to support capital investments," S&P says. Analysts, however, are continuing to explore whether tougher compliance targets for some states will dilute those benefits (ClimateWire, Aug. 12).
The revised rule also gives states two more years, until 2018, to submit final carbon-cutting plans.
Fitch Ratings said the timeline changes will "somewhat assuage a key concern voiced by utility managements."
Advertisement
"Nevertheless, compliance with the CPP will require significant infrastructure investment in building out renewable power generation and associated transmission networks as well as investments in natural gas pipeline infrastructure to facilitate coal to gas switching," Fitch said. "Given the long lead times required to plan and build these assets, we believe compliance by 2022 could still be a challenge for some states."
Overall, the final rule "offers some concessions" but will "nonetheless be a challenge for the U.S. power sector," Fitch says.Unequal impacts on utilities
Regulated investor-owned utilities will likely benefit from the rule, even if they have significant exposure to coal, Moody's Investors Service says. That's because they can probably recover compliance costs by charging customers more for electricity.
S&P notes, though, that "if the costs of complying with the Plan are very onerous, rate-setting bodies might not be able to set rates at levels that can preserve credit measures and support existing ratings."
On the losing end of the rule are unregulated generators with coal exposure and public power utilities and cooperatives that rely more on fossil fuels and face much higher compliance costs, analysts say.
Merchant generators are most at risk from the Clean Power Plan, according to S&P. They don't have a way to recoup costs unless their plants can sell electricity competitively.
"This new regulation is a different sort of beast -- while previous efforts were designed as 'command and control'-type rules, requiring new technologies, this is likely to prompt more of a market-based system, in which coal plants are likely to be less competitive due to their more carbon-intensive nature," S&P says.Stiffer goals
EPA's final rule is expected to cut nationwide power-sector carbon emissions 32 percent below 2005 levels by 2030, compared with 30 percent by 2030 in the draft rule.
"It may not look like a significant difference, but it is a significant difference," said Toby Shea, a Moody's vice president and senior analyst.
The rule incentivizes renewable power and existing nuclear plants, Moody's says. Shea said many states will choose to cap emissions outright, or use mass-based goals, rather than achieving an average fleetwide emissions rate. That means zero-carbon generation like renewables and nuclear, whether existing or new, will be valuable to meeting goals, he said.
The final rule, which projects more renewable energy growth, could have a neutral effect on gas generation, Moody's says. But analysts say they need to see state plans before they can predict the impact to various fuels.
"Gas generation has been growing and will continue to grow with or without the CPP. ... Given the amount of new renewables required to achieve the EPA's emission goals, renewables might crowd out some of gas generation's growth potential," Moody's says. "On the other hand, without the EPA's mandate, some of the coal plants may not be replaced with either gas or renewables."Interstate efforts
Shea expects states will have to work together to trade compliance credits to achieve their goals.
"It's just not realistic -- it's inefficient for each state to meet their own goal without any kind of trading or sharing," Shea said.
S&P also says "it seems inevitable that, assuming the rule is upheld, states will bind together to meet reduction targets."
"The delays in the compliance period and the submission of [state implementation plans] should accommodate this, but the increased incentives for renewables inherent in this new rule also will foster cross-state connections -- after all, the major challenge of renewable assets is how much the sun shines and how much the wind blows, and having a wider geographic base across which to spread this risk partly mitigates this issue," S&P says. "In addition, many utilities and unregulated interconnections operate across state lines, so there are natural 'trading partners' in place already."
Utility CEOs had trading on the brain when they conducted quarterly earnings calls last week, shortly after the final rule came out.
Dynegy Inc. CEO Robert Flexon said his company was already meeting state emissions rate goals in every state except Illinois and Ohio, where Dynegy owns coal plants. Flexon said Dynegy would work with state agencies to write plans to reach target levels, using renewable energy or electricity conservation programs.
"If you look at our fleet outside of Illinois and Ohio, the emissions rates of our fleet versus the targets that those states have to get to, we're essentially a net -- we generate less emissions than what their rates are, so you are a beneficiary or providing beneficial services to that particular state in terms of bringing the average down," Flexon said.
Lynn Good, Duke Energy Corp.'s chairwoman and CEO, said the utility is exploring how the revised rule focuses more on market-based trading for compliance. Duke said the final CPP gives Duke easier targets to hit in North Carolina, South Carolina and Florida, and stiffer ones for plants in the Midwest.
Those impacts require more study, "and the compliance period will also be something we will digest," Good said on a conference call with securities analysts last week.
Dominion Resources Inc. CEO Thomas Farrell said rather than making broad generalizations about the rule, investment analysts should focus on each state's goals, existing generation mixes and capabilities.
"For example, if you look at the Southeastern states and the Midwestern states, where our pipeline assets are [well-positioned] ... gas-fired power will be able to meet the needs with the latest emissions targets," Farrell said. "So we're encouraged by that. I think that's good news -- opportunity for our infrastructure businesses."Reining in power demand
Although energy efficiency capabilities are no longer calculated into state goals, S&P argues programs to reduce power demand are the "most economically efficient way of reducing carbon output."
"In particular, states with relatively low economic growth prospects in the future or which have not deployed these programs effectively in the past could benefit from this approach," S&P says. "However, we have observed that significant differences in building codes, the amount of new construction, and the relative contributions of commercial and industrial loads to demand can significantly influence utilities' ability to achieve efficiency gains."
Financial analysts note that legal and political challenges to the rule could determine how it impacts the power sector.
"We believe the final CPP rule will be litigated," Fitch says. "The judicial review process, along with the shifts in the political landscape [given that the state implementation plans will be finalized under the next administration], could drive the timing and severity of the CPP implementation."
-
States Fire Opening Shot with Request for Emergency Stay
Aug 14, 2015 | E&E - Energywire
By Ellen M. Gilmer
Foes of the Obama administration's plan for cutting greenhouse gas emissions from the power sector have lodged their first formal challenge to the newly finalized Clean Power Plan, asking federal judges to postpone the rule's deadlines.
Fifteen states, led by West Virginia Attorney General Patrick Morrisey (R), filed their complaint yesterday in the U.S. Court of Appeals for the District of Columbia Circuit, arguing that U.S. EPA overstepped its authority in crafting the climate plan, which sets state emissions targets based on increased coal plant efficiency and more reliance on renewables and natural gas.
The emergency petition argues that the 1990 amendments to the Clean Air Act bar the agency from using Section 111(d) of the law to regulate a source that is already regulated by Section 112. Existing power plants -- the key target of the Clean Power Plan -- would fall into that category.
EPA has countered that the amendments -- which have different language in the House and Senate versions -- were instead intended to avoid duplication of regulation for a pollutant, not a source, and that the agency is entitled to deference on the interpretation.
The states' complaint also argues that EPA must focus its regulation on traditional areas like pollution-control technology, instead of straying beyond the power plant "fence line" to state energy portfolios.
"Rather than requiring 'improved design and operational advances,' the Rule mandates far-reaching measures aimed at reducing usage of coal-fired energy by increasing reliance upon competing sources of energy: natural gas and, especially, renewable energy such as solar power and wind," the attorneys general wrote in the filing. "These are economy-wide energy policy mandates, which simply disfavor coal-fired power plants and favor other source categories."
EPA spokeswoman Liz Purchia countered that the rule is based on extensive input from states, industry, regulators and environmentalists and provides "national consistency, accountability and a level playing field while reflecting each state's energy mix."
"To ensure that the Clean Power Plan's significant health benefits and progress against climate change are delivered to all Americans, EPA and the Department of Justice will vigorously defend it in court," she said in an email.
The states' arguments in yesterday's petition track closely with points raised in previous legal efforts against the plan, including a lawsuit from many of the same states that asked the D.C. Circuit to stop EPA from even finishing the rule. The court threw out that suit as premature, a ruling the states challenged.
Two states involved in the early litigation, Alaska and South Carolina, have not joined in the new lawsuit. The Clean Power Plan does not yet set emissions requirements for Alaska, and South Carolina got a boost from the final plan, which allows nuclear power plants currently under construction to count toward compliance.
States new to the litigation are Michigan and Florida. Michigan's targets for emissions reductions stayed nearly the same from the draft to final rule, while Florida's targets were significantly softened.No time for Federal Register?
Environmentalists yesterday railed at the plaintiff states for filing their legal challenge beforeFederal Register publication of the rule, despite a Clean Air Act provision that sets a 60-day window for lawsuits after publication.
The attorneys general urged the court to recognize the urgent nature of their request, noting that EPA could delay publication of the 1,560-page rule for months, while states must begin crafting their compliance plans immediately.
"If we were to wait on the EPA to get this rule published, it could be well into 2016 before the States complete arguments and receive a ruling on a request to stay this rule," Morrisey said in a statement. "By that time, many states will already be in the middle of drafting their compliance plans ahead of the September 2016 deadline. We want to ensure that no more taxpayer money or resources are wastefully spent in an attempt to comply with this unlawful rule that we believe will ultimately be thrown out in court.
"While this request is not typical, the EPA is playing games by putting the risk of a delay in publication entirely on the states. We hope the court will spare our states any more unnecessary harm, and that the EPA will not needlessly delay the publication date," he said.
Sierra Club attorney Joanne Spalding argued that federal judges are unlikely to be receptive to the states' request.
"Multiple federal courts have already rejected premature attacks on the Clean Power Plan and EPA's carbon standards for new power plants," she said in a statement yesterday. "These Attorneys General are wasting taxpayer dollars on a junk lawsuit just to attack life-saving clean air safeguards."
A coalition of environmental groups is expected to intervene in the lawsuit on EPA's side.
States supportive of the Clean Power Plan also fired back, issuing a joint statement criticizing West Virginia and the other plaintiffs for challenging the rule so early.
"West Virginia and other states have filed a request to stay the Clean Power Plan, a new federal rule that will protect Americans from the harmful impacts of climate change on our economies, environment, and public health," the attorneys general of 15 states plus New York City and Washington, D.C., said in a statement.
"Like West Virginia's challenge to the proposed rule, which was dismissed by the courts, this filing is premature," they said. "If and when requests to stay the final rule are timely filed, after the rule has been published in the Federal Register, our coalition will formally oppose them."
-
New Lawsuit's Goal: Secure Right-Leaning Judicial Panel
Aug 14, 2015 | E&E - Greenwire
By Jeremy P. Jacobs
Yesterday's bid by 15 states asking a federal court to block U.S. EPA's landmark Clean Power Plan contained little new information about their objections to the rule.
But it did illuminate a key aspect of their legal strategy: retaining the same three Republican-appointed judges who considered an earlier, premature challenge to the regulations before they were finalized.
Led by West Virginia, the states yesterday asked the U.S. Court of Appeals for the District of Columbia Circuit to take the unusual step of granting an emergency stay of the landmark greenhouse gas standards for power plants, which would put the rules on hold pending the resolution of litigation (EnergyWire, Aug. 14).
The D.C. Circuit typically doesn't entertain challenges to Clean Air Act regulations before they are published in the Federal Register. The Clean Power Plan has yet to be published, leading supporters of the regulations to criticize the latest attempt by critics to bypass the usual judicial review process.
But from a legal strategy perspective, the most important document filed at the D.C. Circuit yesterday may not have been the stay request but a motion to consolidate the new filing with a previous D.C. Circuit case on the greenhouse gas rules when they were in their proposal stage.
If the D.C. Circuit agrees to consolidate the two cases -- and there is significant disagreement about whether it would -- that may preserve the three-judge panel that heard the earlier case.
Advertisement
The states were explicit in their desire for those three judges.
"In short, considerations of judicial efficiency militate strongly against requiring a new panel to become familiar with these arguments. ... The Murray and West Virginia panel is by far the best positioned to rule on the Emergency Petition within the requested timeframe," they wrote, referring to the earlier cases.
The judges who considered the previous challenge from the Ohio-based Murray Energy Corp. and more than a dozen states were Brett Kavanaugh, Thomas Griffith and Karen Henderson. All three were appointed by Republican presidents, and Kavanaugh, in particular, has a track record of ruling against EPA in high-profile cases.
Those judges rejected the early challenge on procedural grounds, holding that the states and industry groups could not challenge a rule before it is finalized (Greenwire, June 9).
But they didn't delve into the merits of the challengers' claims -- including whether EPA has authority to issue the regulations under Section 111(d) of the Clean Air Act because the agency has already regulated power plants under another part of the law; whether EPA's mandates reach too far beyond the "fence line" of power plants; and whether they unconstitutionally infringe on states' rights.
And some court watchers believe the judges may be receptive to those arguments.
"It's a pretty favorable panel for them," said Justin Pidot, a former Justice Department environmental attorney who is now a professor at the Sturm College of Law at the University of Denver. "It's not surprising they are trying to keep it. It's certainly part of their strategy."
Environmental groups have strongly opposed efforts to retain that three-judge panel for any future litigation on the Clean Power Plan, which would cut carbon dioxide emissions by 32 percent from 2005 levels by 2030.
However, the D.C. Circuit's procedural rules are very unclear about whether and when the same three-judge panel is assigned to new cases. In short, the court has a great deal of discretion on the matter.
Willy Jay, a former Justice Department attorney now at the firm Goodwin Procter, said there have been instances where a case has been before the D.C. Circuit, then returns later and merits the same panel of judges. But that's not necessarily the norm, he said.
A key issue is how much time and effort the previous three-judge panel -- Kavanaugh, Henderson and Griffith -- spent learning the issues presented in the earlier case. If it was extensive, even though they didn't discuss them in their ruling, that could warrant their assignment to the new case.
"Only the court knows how much time it spent familiarizing itself with the merits as opposed to the jurisdictional issues," Jay said.
It's important to note, however, that stay and consolidation motions, like those filed by the states yesterday, usually go before a special panel of three judges who review motions pending in all cases before the D.C. Circuit. That panel is typically not the same three judges who then consider the full proceedings on the case.
While the previous panel didn't engage with the main legal arguments presented in their ruling, there is some indication that one of those judges would be receptive to issuing a stay while the litigation plays out.
In her concurring opinion, Henderson wrote that she believed a law called the All Writs Act grants the court broad authority to step in and block regulations in unusual circumstances. West Virginia and the challenging states' emergency stay petition filed yesterday expressly points to the All Writs Act.
Vermont Law School professor Pat Parenteau said Henderson's writing "does indicate that she views the All Writs Act as a broad grant of equitable authority unconstrained by the strict procedural requirements of the Clean Air Act."
"Assuming this petition goes back to the original Murray panel," he added, "her vote could be important."
It is unclear when the court will rule on the stay request or when it will assign a panel to it.
But for now, Jay said, "the wrinkle in this case is the consolidation request."
Click here for the motion.
-
EPA Water Policy Hints At Limits On Agency's 'Interpretative' Rulemaking
Aug 14, 2015 | InsideEPA
By Bridget DiCosmo
EPA's recent proposed "interpretive" rule aiming to streamline tribes' applications to issue Clean Water Act (CWA) permits hints at the agency potentially seeing some limits on its authority to issue new interpretations of existing rules despite a Supreme Court ruling that says such policies do not need to have formal notice-and-comment.
The high court ruling would "give cover to the EPA if it chose simply to announce the interpretive change without notice and comment," one legal source says. "Yet, EPA seems to have deliberately chosen what might be described as the safe and conservative approach here by apparently going the full public comment route," the source adds.
A second legal source says that EPA's decision to take comment on the proposed tribal water quality standards (WQS) rule might suggest some concern within EPA that agencies' "latitude with regard to interpretive rules may not be limited," cautioning that despite the high court's ruling the "lay of the land is still uncertain."
The agency in its Aug. 7 proposed interpretive rule aims to streamline the process for tribes to apply for CWA approval to set enforceable WQS. EPA is taking public comment through Oct. 6 on its proposed interpretation of section 518 of the CWA as establishing a congressional intent for EPA to delegate CWA authority to eligible tribes.
Under the Administrative Procedure Act (APA), agencies must follow notice-and-comment procedures for major rulemakings but interpretive rules that only state the agency's interpretation of the text of an existing regulation are exempt -- although the legality of not taking comment on the rules has been the subject of debate.
Until earlier this year the U.S. Court of Appeals for the District of Columbia Circuit, which hears challenges to most major EPA rules, had required agencies to follow notice-and-comment procedures when revising an interpretive rule, as long as the existing interpretation had been "substantively relied on" in other proceedings.
But the Supreme Court in a 9-0 decision, issued March 9, Perez, et al., v. Mortgage Bankers Association, et al., overturned the D.C. Circuit's doctrine. Writing for the high court, Justice Sonia Sotomayor said the D.C. Circuit's doctrine "is contrary to the clear text of the APA's rulemaking provisions, and it improperly imposes on agencies an obligation beyond the 'maximum procedural requirements' specified in the APA."
Observers say the high court ruling should have given EPA leeway to issue the tribal WQS rule without seeking notice and comment. But the agency's decision to seek input on the proposal before crafting a later final version of the rule suggests EPA might take a more conservative approach on such rules, sources say.
EPA acknowledges in the Aug. 7 Federal Register notice announcing the rule that it is not subject to notice and comment requirements under the APA, but says, "EPA decided to provide notice and an opportunity for comment to increase transparency and to allow interested parties to provide their views."
The process is different from an approach the agency took in an earlier interpretive rule, finalized jointly with the Army Corps of Engineers in March 2014 as a supplement to the agencies' controversial regulation clarifying the CWA scope. That interpretive rule, which the agencies issued in final form without first proposing for public comment, clarified which agricultural conservation practices from CWA dredge-and-fill permits, but drew a hostile reception and lawmakers eventually approved a legislative rider forcing the rule's withdrawal.
EPA did not respond to a request for comment by press time.
Proposed Rule
The first legal source says that EPA in its CWA tribal authority proposed rule may be seeking some added insulation for another legislative reversal if the regulation prompts opposition from Congress.
But the source adds that, "You might also speculate that the EPA is seeking to avoid the sense of concern if not criticism that underlay some of the Justices' statements" in the Perez opinion "about agencies merely using the interpretive moniker in order to skirt public comment for effectively substantive actions."
The source's comments about other justices refers to concurring opinions written by Justices Antonin Scalia, Samuel Alito and Clarence Thomas. Those justices joined the majority opinion in Perez but called for a more sweeping decision that would overturn earlier Supreme Court cases requiring judges to defer to agencies' interpretations of ambiguous regulations, such as the Department of Labor rule at issue in Perez.
The conservative justices argued that the earlier high court decisions have allowed EPA and other agencies to effectively change their rules on a whim by giving regulatory interpretations the force of law as long as the rule in question is ambiguous. As a result, the various opinion in Perez create a split among the high court justices on whether courts should defer to agencies on interpretation of ambiguous rules.
For example, Scalia in his concurring opinion in the Perez case wrote, "Because the agency (not Congress) drafts the substantive rules that are the object of those interpretations, giving them deference allows the agency to control the extent of its notice-and-comment-free domain. To expand this domain, the agency need only write substantive rules more broadly and vaguely, leaving plenty of gaps to be filled in later, using interpretive rules unchecked by notice and comment. The APA does not remotely contemplate this regime."
The Supreme Court's 6-3 ruling issued in June in King v. Burwell in June, which agreed with the administration's interpretation of President Obama's health care law, has been flagged by observers as signaling justices trying to limit the deference they give to all agencies. In King, the court held that even though language on the Affordable Care Act's tax credits was ambiguous, the application of that provision was so fundamental to the act that Congress could not have intended the Internal Revenue Service (IRS) to choose an interpretation on its own.
The key element in King is that the "majority refused to give IRS Chevron deference, suggesting limits to agency discretion, the second source says, adding that the "whole area of agency discretion is not closed," and EPA may be taking precautions in the Aug. 7 proposal in the hopes of avoid a future adverse judicial ruling. Chevronrefers to a Supreme Court ruling that sets the general test for deferring to agencies' interpretation of statutes.
The first source, however, cautions against reading into EPA's "safe" approach in the proposed rule, saying that "until there is a track record of consistently doing so, I would hesitate to expect broad use of this approach."
The source also notes that EPA has not committed to fully subjecting the interpretive rule to all APA procedures, including whether it must take into account each substantial comment. "Thus, it may still be hedging its bets as to whether and to what degree it will actually deal with the public comments it receives."
-
House GOP Questions McCarthy's Testimony On EPA Rules
Aug 13, 2015 | InsideEPA
Republican members of the House science committee are challenging as potentially “false and misleading” some of EPA Administrator Gina McCarthy's testimony at recent congressional hearings on the agency's Clean Water Act (CWA) jurisdiction rule and ozone air standards, urging her to quickly clarify the comments.
“The Committee has found several instances where your responses to questions posed by Members were false and misleading,” says an Aug. 11 letter to the administrator signed by 13 GOP members of the House Science, Space, and Technology Committee. The lawmakers ask McCarthy to “reflect on your testimony and provide further details,” hinting at possible further investigation by the science panel. “Should it be necessary to clarify or amend your testimony, then we request you do so as quickly as possible,” the letter says.
The letter was signed by House science panel Chairman Lamar Smith (TX), Vice Chairman Frank Lucas (OK), and Reps. Randy Hultgren (IL), Bill Posey (FL), Jim Bridenstine (OK), Randy Weber (TX), Bill Johnson (OH), John Moolenaar (MI), Steve Knight (CA), Bruce Westerman (AR), Gary Palmer (AL), Barry Loudermilk (GA) and Ralph Lee Abraham (LA).
The lawmakers take issue with McCarthy's testimony on three EPA policies: the agency's CWA jurisdiction rule, released jointly May 27 with the Army Corps of Engineers, its proposed national ambient air quality standards (NAAQS) for ozone and transportation conformity penalties for non-compliance with EPA regulations.
On the CWA rule, the lawmakers charge that McCarthy's July 9 testimony in response to a question from Lucas that indicates that data on how EPA developed its 4,000 feet of the high tide line or ordinary high water mark as the benchmark for restricting protections within a certain linear distance could be found in the regulatory docket, conflicts with subsequently released Corps' memos.
The memos, posted online by the House Committee on Oversight and Government Reform, are part of the internal dialogue between EPA and the Corps in the run-up to signing the final CWA rule on May 27. They include often strongly worded critiques of the rule and EPA's economic and scientific analysis supporting it, all of which could boost critics' legal claims that the rule is unfounded and arbitrary, according to an attorney tracking litigation over the rule.
The GOP lawmakers' letter says that at least one of the memos appears to “concur with the notion that EPA has not provided any scientific or legal justification for the figures outlined in Mr. Lucas' questioning.”
On the ozone NAAQS, lawmakers refer to questions during the same hearing on the ability of states to regulate background ozone, to which McCarthy responded “let me assure you that states are not held responsible for reducing emissions that are not in their control.”
The letter charges that the statement conflicts with other agency policy statements indicating states are not excluded from air management regimes due to exceedances because an area is significantly impacted by background ozone, and also that McCarthy’s statement on the relation between asthma and ozone conflicts with other EPA statements.
The Republicans also take issue with what the lawmakers say is McCarthy's “unequivocal” statement that transportation penalties have never been levied for noncompliance with EPA regulations, pointing out that the Federal Highway Administration says EPA has imposed highway sanctions 13 times in the past 20 years.
The letter asks that McCarthy “correct the record and . . . be truthful with the American public about matters related to EPA's regulatory agenda going forward.”
-
Va. State Lawmakers Take Fresh Aim at Clean Power Plan
Aug 14, 2015 | E&E - Energywire
By Rod Kuckro
Virginia lawmakers intent upon derailing the Obama administration's Clean Power Plan may want to be careful what they wish for, according to a leading clean energy advocate in the state.
On Monday, Republican state lawmakers said they would introduce legislation that would require the General Assembly to approve any state compliance scheme.
Their reaction to U.S. EPA's final version of its rule to curb carbon emission from the nation's power plants was swift and pointed.
"The 1,500-plus pages of regulations released by President Obama's EPA could drive up energy prices and damage Virginia's already struggling economy," said House Speaker William Howell (R). "The Commonwealth should delay the implementation of any compliance plan while the regulations are litigated and the General Assembly should have final approval and oversight of the plan."
"It almost seems like it's a knee-jerk reaction" to anything that EPA proposes on CO2 emissions, said Francis Hodsoll, president of the Virginia Advanced Energy Industries Coalition.
The response seems as if it was "ready to go right out of the box," he said, noting that Howell and his colleagues "frankly could never have read the 1,500 pages by the time they announced they were going to promote this bill."
Gov. Terry McAuliffe (D) on Aug. 3 praised EPA, saying it appears that the agency "made positive changes to address concerns my administration and I expressed repeatedly about ensuring equity and flexibility for Virginia in developing this final rule."
EPA did soften both Virginia's final and interim goals somewhat from the proposed rule.
The state's 2030 goal requires a 32 percent reduction in the carbon emissions rate, versus 38 percent in the draft rule. The goal is 934 pounds of CO2 per megawatt-hour, which EPA describes as the "middle" of the range for states. By comparison, the proposed 2030 goal was 810 pounds CO2/MWh.
The state's interim goal is also less stringent than the proposal, which "reflects changes EPA made to provide a smoother glide path and less of a 'cliff'" in the early years, according to the agency.
Nevertheless, Republican Delegate Israel O'Quinn said he would introduce the bill before the General Assembly reconvenes in 2016.
The bill, as described, resembles model legislation put forward in December by the conservative American Legislative Exchange Council that has had trouble gaining traction, even in states hostile to the EPA plan (ClimateWire, June 1).
"For Virginians, the impact of complying with President Obama's regulations will be severe," said O'Quinn, who represents a district in southwestern Virginia's coal country.
"Governor McAuliffe must send his plan to the Legislature for review, and the House and Senate will then take a vote on behalf of the Virginians they represent. If the plan fails to pass, Governor McAuliffe tries again. He cannot implement the plan without approval of the General Assembly and, by extension, the citizens of Virginia. It is that simple," he said.
Not exactly so, said Hodsoll, who pointed out that if such a "misguided" measure were ever enacted, EPA would, as promised in the final rule, impose a federal plan on the state.
"It's a politically motivated stunt clearly designed to thwart the process. It does everybody a disservice," Hodsoll said.
McAuliffe and his state agencies have access "to technical resources to truly evaluate the pros and cons of something like this."Wait and see
Critics should wait for such an evaluation and then craft a constructive reaction, Hodsoll suggested.
He noted that Dominion, whose electric utility is dominant in the state, and those who are "going to be most affected by this, are complementary of the plan."
"The compliance targets for Virginia have moved in a positive direction that fairly recognizes the role of natural gas generation in reducing emissions," Dominion Resources Inc. Chairman, President and CEO Thomas Farrell said in a statement just after the plan's release.
Two days later, during a conference call with Wall Street analysts, Farrell said, "We're encouraged by some of the changes made to the original proposal and are evaluating our options to help Virginia comply with the new regulations. It is clear, however, that the plan will require significant new investments in generation and electric transmission in our Virginia service territory as well as many new opportunities for all aspects of our gas infrastructure businesses."
Farrell said Dominion would be working with McAuliffe's "environmental quality people along with our reliability regulators to help make sure they have all the information they need to form the best plan for Virginia."
O'Quinn had proposed a similar bill earlier this year that would have required the Virginia Department of Environmental Quality to get approval from the General Assembly for a state plan to regulate carbon dioxide emissions. Howell, however, ruled the bill out of order.
It, as well as other legislation directed at hindering state compliance with the Clean Power Plan, failed to become law.
Calls for comment to state Dels. Howell and O'Quinn were not returned.
Asked about the forthcoming Republican bill, Christina Nuckols, a spokeswoman for McAuliffe, said "as soon as there is a bill, we will be able to comment on it." As for now, "The governor's staff is continuing to conduct a detailed analysis of the rule and developing a process to engage all stakeholders in creating a framework for compliance," she said.
-
Extended Timeline Does Little to Ease Urgency for Ill. Energy Reform
Aug 14, 2015 | E&E - Energywire
By Jeffrey Tomich
U.S. EPA's Clean Power Plan issued last week gives states an additional two years to meet its earliest compliance deadline -- an extra cushion offered in response to criticism about the more aggressive timeline in last year's draft rule.
But the extra time does little to relieve the urgency among various interests in Illinois, where debate over an energy bill has been pushed aside by a continuing budget impasse.
The state's largest generator, Exelon Corp., has threatened to announce the closure in the coming months of one or more of its Illinois nuclear plants that are facing financial headwinds (EnergyWire, Feb. 27). And renewable energy advocates continue to push to fix and expand the state's broken renewable energy standard, which has stymied wind and solar development.
Exelon and a coalition of environmental, consumer and renewable energy advocates have each proposed legislation that they say is key to Illinois meeting its Clean Power Plan obligations. And both sides have made clear that waiting for September 2016, when state compliance plans are due, isn't the answer.
"If we just sit on our laurels and do nothing until 2022, we're going to fall behind," said Sarah Wochos, co-legislative director for the Chicago-based Environmental Law & Policy Center, part of the Illinois Clean Jobs Coalition. "Certainly, other states are not going to sit around and do nothing."
The Union of Concerned Scientists yesterday released an analysis that showed where states are relative to specific carbon reduction goals in the Clean Power Plan. Illinois is among those best positioned to meet its obligations.
Using a rate-based approach, Illinois is 62 percent of the way toward meeting its 2022 target for carbon dioxide reductions and 48 percent toward its 2030 goal, said Steve Frenkel, Midwest office director for the organization. Under a mass-based approach, the numbers rise to 80 percent and 58 percent, respectively.
Frenkel said the analysis assumes no change to Illinois' renewable or energy efficiency standards, both of which have failed for different reasons to achieve their targets.
"If Illinois fixed structural flaws in its existing clean energy portfolio, certainly the state would be in a better position," he said. "And it should not only fix them, but strengthen them."
The Illinois Clean Jobs Coalition continues to press competing legislation that would increase the state's renewable portfolio standard to 35 percent by 2030 and expand the energy efficiency requirement.
The current 25 percent renewable standard made Illinois an early leader in green energy when it was adopted. But the law has been broken for years, stymieing wind and solar development, because of an unintended conflict in state law.
Wochos said a new component in the final Clean Power Plan that rewards states for early investment in renewable energy and energy efficiency should provide legislators even more reason to adopt policies that help cut carbon dioxide emissions and create jobs.
Chicago-based Exelon, meanwhile, said in a statement that it is "nearly impossible to meet the Clean Power Plan targets without the benefit of the existing nuclear fleet" and that loss of two of the plants would make it twice as difficult and costly for the state to meet its obligations.
The company also added that the 2022 effective date is no remedy for the three Illinois plants that "have been losing hundreds of millions of dollars in recent years."
"Policy reforms are still needed in Illinois to properly value and recognize the state's nuclear plants," the statement said.Next auction crucial
While the Clean Power Plan will be central to the energy policy debate in Illinois, so will results of the PJM Interconnection's 2018-19 Base Residual Auction, the grid operator's annual generation capacity auction.
The PJM auction, normally conducted in the spring, was delayed to accommodate new capacity performance standards in the wake of last year's polar vortex. And the outcome could determine the fate of at least one of Exelon's threatened nuclear plants.
The PJM auction started Monday and will conclude today. Results are to be announced at 4 p.m. Aug. 21.
Two of Chicago-based Exelon's Illinois nuclear plants -- Quad Cities and Byron -- failed to clear the PJM auction a year ago. And Chris Crane, the company's chief executive officer, said Exelon faces a September deadline to inform the grid operator whether plants will be available for next year's auction covering the 2019-20 planning year.
During Exelon's second-quarter conference call on July 29, Crane said the company remains hopeful that the company's legislative proposal to establish a 70 percent low-carbon portfolio standard in Illinois can be considered during the Illinois Legislature's fall veto session that begins in November.
The measure was offered by Exelon as a bridge solution to keep nuclear plants running until the state implemented a plan to comply with EPA's proposed Clean Power Plan.
David Kolata, executive director of the Citizens Utility Board, a consumer watchdog and another member of the Clean Jobs Coalition, said it's too soon to know if the General Assembly can pass an energy bill by the end of the year.
But, he said, the Clean Power Plan "does provide further impetus to get something done sooner rather than later."
-
API Urges OMB To Drop Methane From Oil, Gas Rules, Focus On VOCs
Aug 14, 2015 | InsideEPA
By Dawn Reeves
The American Petroleum Institute (API) is pressing the administration to avoid direct regulation of the potent greenhouse gas (GHG) methane from the oil and gas development sector in EPA's upcoming rules and instead continue to focus on reducing volatile organic compounds (VOCs), which have the co-benefit of methane reductions.
API's regulatory affairs director Howard Feldman told reporters Aug. 13 that the group was meeting the same day with officials from the White House Office of Management & Budget (OMB) to urge the administration against establishing a first-time methane regulatory program, as EPA is expected to do in a pending proposed rule that OMB is currently reviewing.
Specifically, API met with OMB to discuss EPA's draft proposed rule, Control Techniques Guideline for the Oil and Natural Gas Sector, which the agency sent to the White House July 21.
The guidelines, which would apply to existing sources in areas out of attainment with the national ambient air quality standard (NAAQS) for ozone, are part of a package of measures President Obama required EPA to develop to curb both methane and VOCs.
The guidelines will not directly limit methane but a related EPA proposal, also undergoing White House review, is expected to set first-time new source performance standards (NSPS) limiting methane as well as VOCs at oil wells and other sources not addressed in EPA's 2012 NSPS for the industry.
The pending NSPS proposal could mark a major win for environmental groups that have pressed for “direct” regulation of methane, a GHG that is as much as 28 times as potent as carbon dioxide.
While EPA is for now only expected to regulate methane at “new” sources, environmentalists are pushing the administration to ensure the NSPS covers as broad a range of sources as possible in the hopes that they will eventually be able to force the agency to regulate a similarly broad range of “existing” sources.
EPA is also taking a third action aimed at curbing methane from the oil and gas sector, proposing a voluntary plan to cut emissions from existing sources.
While the plan has won some support from environmentalists, the advocates generally agree that a voluntary plan is no substitute for regulations.
API's Feldman said his group has “given our preliminary thoughts” to EPA on the voluntary program as well, and will submit comments when they are due later this fall.
Methane Emissions
API's overall message is that industry is reducing methane emissions on its own, through compliance with the current VOC rules, and does not want EPA to create a separate regulatory methane program.
Feldman said while natural gas production has increased 39 percent over the last decade, methane decreased 38 percent from fuel processing between 2005 and 2013, and 11 percent overall.
“Specifically targeting methane is not the correct path,” he said, warning it will add regulatory burdens without benefit.
API's position is different from others in the industry. For example, oil giant Shell -- an API member -- has urged EPA to adopt a “very narrow” approach to direct methane regulation if it insists on the new rules. A Shell official said late last year that “if EPA is committed to a regulatory path instead of a voluntary approach, we have urged EPA to take a very narrow approach.” The official also urged EPA to “avoid a broad approach that could impose unnecessary costs and burdens on an industry challenged now” by sustained low gas prices and other EPA rules.
Feldman said the Aug. 13 OMB meeting with API was focused on the cost-effectiveness of the control techniques. The proposal is expected to affect both new and existing equipment, and Feldman pointed out that adding controls to existing units is not as effective and more costly, while emission reductions degrade over time.
Feldman ticked off other looming rules affecting the oil and gas sector, including a permit aggregation rule under OMB review, a final ozone NAAQS, and a pending proposal from the Bureau of Land Management that will address venting and flaring of methane from oil and gas operations on public lands, to note, “We're not seeing all the pieces at once” of the slew of rules that will soon significantly impact the industry.
Finally, Feldman noted that EPA in its newly finalized existing source performance standards (ESPS) to cut power sector GHGs claims significant public health benefits through ozone reductions that will be achieved through less coal-fired electricity. He said this is one argument for EPA not to tighten the ozone NAAQS due this fall because the ESPS will bring ozone benefits that go beyond what the existing standard requires.
Also Feldman criticized the final ESPS for showing that the administration is “moving away” from its all-of-the-above energy strategy and toward “picking winners and losers.”
-
EPA's Critics Might Wait Until 2017 To Advance Regulatory Reform Package
Aug 14, 2015 | InsideEPA
By David LaRoss
EPA's critics in Congress are now considering waiting until 2017 for a concerted effort to pass a comprehensive regulatory reform package that a potential GOP president might sign, though they continue to push new bills that would allow legislators to end what they see as agency overreach with its climate, water, and other rules.
"It's an entire basket of big-picture regulatory reform items, thinking about the balance of power between Congress, the judiciary, and the presidency. . . . There's a lot of interest in crystallizing these ideas in legislation, so that when the next administration comes into office, potentially all of these things could be components of a 'first 100 days' package," attorney Andrew Grossman, a member of the free-market think tank Cato Institute, toldInside EPA in a recent interview.
Such a strategy could be Republicans' best hope to pass regulatory reform bills that face nearly universal opposition from Democrats and the Obama administration -- as the White House demonstrated in a recent veto threat over a bill that would require majority votes in both chambers of Congress to approve agencies' "major" rules. That legislation, H.R. 427, cleared the House in a 243-165 vote on July 28 but faces uncertain prospects in the Senate.
The administration's July 27 Statement of Administration Policy (SAP) against the bill called it an "unprecedented" hurdle for the rulemaking process that would delay new regulations for months or more while they await floor votes in Congress. "By replacing this well-established framework with a blanket requirement of Congressional approval, H.R. 427 would throw all major regulations into a months-long limbo, fostering uncertainty and impeding business investment that is vital to economic growth," the SAP says.
Although most currently pending reform bills such as H.R. 427 have backing primarily or entirely from Republicans, with little chance to win approval from President Obama or many Democrats in Congress, legislators are continuing to add new proposed bills to the "basket" of regulatory reform -- including one with bipartisan sponsors, S. 1607, introduced recently.
That bill, introduced by Sens. Robert Portman (R-OH), Susan Collins (R-ME) and Mark Warner (D-VA), could garner more Democratic support even though it would add possible new requirements for EPA and other "independent" agencies when they propose rules. Independent agencies are those not headed by a member of the president's cabinet, including EPA, the Nuclear Regulatory Commission and the Small Business Administration, among others.
"This bipartisan legislation helps to ensure that our regulatory system effectively protects the public without unduly burdening our economy with costly, untested regulations. This bill will fill an important hole in our regulatory system and require that new regulations introduced by independent agencies are properly scrutinized and that the potential impacts to our economic system are fully evaluated," Collins said in a statement.
Under S. 1607 the president, rather than Congress, would have the choice of whether to invoke the new mandate on a case-by-case basis -- unlike many of the other pending bills that would not allow the White House to opt out of new requirements aimed at overhauling the regulatory process. "The President may by Executive order require an independent regulatory agency to comply, to the extent permitted by law, with regulatory analysis requirements applicable to other agencies," including cost-benefit analysis mandates, the bill says.
Reform Legislation
To date, 114th Congress regulatory reform legislation has generally met a hostile reception from Democrats, not limited to the veto threats against H.R. 427 and other House reform bills.
For instance, at a July 15 House Judiciary Committee regulatory reform panel hearing to scrutinize the White House Office of Information and Regulatory Affairs (OIRA) -- which reviews agency rules prior to their publication -- Rep. Scott Peters (D-CA) said he supports streamlining the regulatory process but has opposed GOP bills on the subject because they appear aimed at paring back specific rules the GOP opposes. "I'm an avid advocate of process reform. . . . But I'd ask not to inject the answer ahead of time," he said.
The White House has already promised to veto several regulatory review bills including H.R. 185, which cleared the House in January, and H.R. 527, which is still pending in committee.
H.R. 527 would expand rulemaking analysis required under the Regulatory Flexibility Act, while H.R. 185 would require agencies crafting new rules to conduct additional analysis, weigh alternatives and choose the lowest cost alternative within statutory guidelines. Agencies would have to consider factors such as the problem the rule would address and the risks and benefits involved when crafting new rules.
The White House veto threats, as well as the prospect of a Senate filibuster from Democrats, have led some supporters of the measures to decide that the proposals could have the best chance to pass in 2017, under a newly inaugurated president, Grossman told Inside EPA. "The hope is that you would have a president who's more focused on an ideal, not yet so concerned with protecting the power of the executive branch," he said.
Select Committee
House and Senate committees with oversight of EPA have held hearings on various regulations that the GOP members of the panels oppose. But a concurrent resolution introduced in the Senate May 20 by Mike Rounds (R-SD), seven GOP co-sponsors, and Joe Manchin (D-WY) to create a new bicameral select committee on regulatory review could give EPA critics a unified venue to pursue reform legislation.
The resolution, S. Con. Res. 17, would establish a 30-member joint select committee, composed of 15 senators and 15 House members that would be tasked with making recommendations to the full Congress on regulatory reform measures -- including a proposal for a standing committee with the power to review and block pending rules.Since concurrent resolutions lack the force of law and therefore do not require the president's signature, S. Con. Res. 17 would go into effect with majority votes from both chamber, giving it better prospects compared to the bills advanced so far this year, which have faced Democratic opposition and the White House veto threats.
But even though a concurrent resolution can clear regardless of the White House's position, Congress cannot create new authority to block agency rules through that procedure -- meaning legislation enacting its recommendations would still be subject to a veto, posing a hurdle for any substantive regulatory review bills, unless they wait for the next administration to take office following the 2016 elections.
-
Pipelines Safer Than Rail for Moving Oil -- Study
Aug 14, 2015 | E&E - Energywire
By Blake Sobczak
Railroads are more than 4 ½ times riskier than pipelines for moving oil, according to a new study out of Canada.
The nonprofit Fraser Institute shared research yesterday showing that from 2003 to 2013, railroads encountered 0.227 "occurrences" per million barrels of oil equivalent shipped, compared to 0.049 occurrences for pipelines.
The group defines "occurrences" to include oil spills and any other accident that affects worker or environmental safety.
"We'd hope that we've provided data that would help in deciding how to evaluate the risk of moving oil and gas in Canada," said Kenneth Green, the study's lead author and senior director of the Fraser Institute's Centre for Natural Resource Studies. "Knowing that the consequences of slowing pipeline development is increased risk should inform the policymaking process," he added in an emailed response to questions.
The latest review of official spill data adds to a long-standing debate over the relative risks of moving petroleum products by rail or by pipeline. The amount of crude oil shipped by both modes of transportation has shot up in recent years across North America thanks to oil sands developments in Canada and the vast Bakken Shale play in North Dakota.
Differences in reporting requirements and limited statistics can make it difficult to weigh rail tank cars against pipelines, however. The Fraser Institute's study acknowledged that the Transportation Safety Board of Canada's official data "for the goods transported by pipelines and rail are not perfectly comparable."
Advertisement
Railroads in Canada, for instance, are required to report spills of greater than 200 liters (53 gallons) for oil and refined products, while pipeline operators have to note any release, according to Green. The opposite holds true in the United States, where the Department of Transportation requires pipeline companies to report spills of 5 gallons of more and railroads must disclose leaks of any size.
The study's core comparison -- occurrence rate per million barrels of oil equivalent transported -- also doesn't account for the distance each product moved. But Taylor Jackson, a policy analyst at the Fraser Institute and a co-author of the study, said he doesn't see that as a major limitation.
"The most crucial thing to control for is the vast differences in the volume of product moved," Jackson noted in an email. "Adding in ton-miles [1 ton of freight moved 1 mile] might provide an additional dimension but we don't think it would have a large effect and we are unaware of the additional data existing in Canada that we would need to calculate that metric."
The study found that pipelines in Canada pumped roughly 15 times more oil and gas products by volume than railroads in 2013. Because of that, the authors said, it's "not surprising" that pipelines spill more total oil per year: about 6.6 million gallons.
In the United States, analysis from the State Department has shown that while pipeline spills are bigger than rail incidents on average, railroads carrying oil can put more lives at risk due to their routes through major cities.
The Fraser Institute researchers cited this safety discrepancy while concluding that both rail and pipelines in general are "quite safe." The think tank's study noted that the majority of the incidents reviewed took place in facilities such as rail yards, terminals and pump stations, where extra safety and spill cleanup resources are typically available.
A spokeswoman for the Railway Association of Canada said the trade organization is still looking over the new research. Holly Arthur, spokeswoman for the Association of American Railroads, said the group also is reviewing the study but added that "our position has always been that both modes are incredibly safe."
Sabrina Fang, spokeswoman for the American Petroleum Institute, said the oil industry group is considering the study. She pointed out that having more options for moving oil in general, including building the stalled Keystone XL pipeline from Alberta to the United States, "could benefit consumers by increasing the amount of fuel to the marketplace while stimulating job and economic growth."
The Fraser Institute does not disclose its primary donors.
TransCanada Corp., the company behind the KXL pipeline, tweeted about the study yesterday, writing that it "confirms pipelines safest way to transport oil."
Industry and Association News
Chemical Management News
Chemical Security News - There are no clips to report at this time.
Energy and Environment News
Transportation News
Add recipients
Suggested